email a friend iconprinter friendly iconWhat's Next?
Page [ 2 ] of 5

Fines were deducted from my deposit at the Prosperous Automobile Rental Company. “It's a good business for the police," the rental company boss told me. Later I learned that individual cops invested in cameras as private entrepreneurs with a stake in profits. The boss told me to memorize the camera locations, but I was never able to do that. It was hard enough to manage every trip so I always returned the car with an empty tank. That was Prosperous Automobile's business strategy: Whenever they rented out a vehicle, they made sure it had just enough fuel to make it to a gas station. If I returned a car with so much as a gallon in the tank, it would be siphoned off and sold—another profit in the cutthroat world of Chinese business.

The poet John Greenleaf Whittier, who marveled at the early industry of Lowell, Massachusetts, described the “city springing up, like the enchanted palaces of the Arabian tales, as it were in a single night." Today it's the factory towns of China that seem to be conjured up from another world. The sheer human energy is overwhelming: the fearless entrepreneurs, the quick-moving builders, the young migrants. Virtually everybody has been toughened by the past; families remember well the poverty of the Mao period. Meanwhile most Chinese have seen their living standards rise in recent years, often dramatically. This combination—the struggles of the past, the opportunities of the present—has created a uniquely motivated population. It's hard to imagine another place where people are more willing to work.

But few Chinese spend much time thinking about the future. Decades of political turmoil taught citizens that nothing lasts forever, which inspires the fearlessness of the entrepreneurs but also makes them shortsighted. The same is true of the Communist Party. During the reform years, authority has become so decentralized that there's little oversight, and most local governments have to find their own funding. They rely heavily on real estate transactions—a city can acquire farmland, build basic infrastructure, and then sell to industry or commercial developers. Economists estimate that cities receive roughly half their fiscal revenue from such sales, and in many places it's resulted in madcap development, financed by loans from state banks. Cadres take advantage of any opportunity for corruption, because the party has a policy of rotating leaders. "Every five years you change the local government officials," Wang Lina, an economist at the Chinese Academy of Social Sciences, told me. "So they know they have a limited opportunity. Do they worry about the next generation of leaders? They have to get it while they can."

Page [ 2 ] of 5