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7 Years of Market Revolution in China

May 24, 2007

Tags Global Economy

Anyone who has read RJ Rummel's China's Bloody Century: Genocide and Mass Murder Since 1900 can only wish that the Chinese would get a merciful break after all that. (Except for the neocons who are eager to get a conflict going with China and for whom mercy, I gather, is not a virtue.)

A Chinese co-worker recently returned from a visit back home after not being back in China since 2000. His account of the changes he saw from those 7 years of the (somewhat) unleashed market is amazing and encouraging.

The first thing he told me: "Everyone has cars!" In 2000 only a small elite had cars, but now a large middle class does, and nice ones. Of course, this and the other things he told me apply primarily to places like his home city Nantong (on the other side of the Yangtze River from Shanghai), Shanghai and a few other cities he was able to visit. Stock ownership has gone from something like 10% of the Chinese in 2000, to a stunning two-thirds of the urban population. Not only cars but cell phones, media players and other gadgets are not only ubiquitous in the cities but often have superior features to what we have in the US. My friend had trouble recognizing his home city due to all the new roads (for all the new cars to get around on) and new buildings. My friend, who is 43, says that many of his peers back in China are now millionaires from businesses started 5 to 10 years ago. The private sector is, of course, where the ambitious young Chinese go.

One worrying aspect of his report is that stock market speculation seems to be in the sort of frenzy we often see in a boom. His father put money into the stock market a month ago and the value of his investment has more than doubled in that time. This is typical. Some people have shut down their businesses and put the money into the stock market instead.

Another interesting note is that the government has cracked down on stores selling pirated music, movies and software. In 2000 they were everywhere, but this time they were nowhere to be found.

Even if there is some of this that is an unsustainable bubble, clearly China is going through a market revolution that is changing life for tens of millions of Chinese at a record-breaking pace. There is hope in the air in China. Finally.

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