China is a material world
TEXT OF INTERVIEW
Kai Ryssdal: Three years ago, we sent Scott Tong to China to set up our Shanghai bureau. He has tracked the growth of one of the world's dynamic economies and the people that make that economy go. Since Scott arrived, China's come to dominate conversations about energy, how economies grow, changing demographics, sometimes even the future of capitalism.
Our new Shanghai bureau chief, Rob Schmitz, has a China history as well. And as Scott comes home and Rob takes over, we wanted to talk to them together about the changes they've seen and will see. We've got them on the line now from what might be the most appropriate example of China's changing economic attitudes, the China Pavilion at the World Expo in Shanghai. Hey guys.
Rob Schmitz: Hey Kai.
Scott Tong: Hey Kai.
Ryssdal: So you are there at the Shanghai World Expo, formally known I think in the vernacular as the World's Fair. Rob, you've been in town, what 10 days, two weeks now? What are your first impressions?
Schmitz: Well Kai, this is sort of like Disneyland times 10. We're standing right in front of the China Pavilion, which is of course the most popular pavilion here. It looks like this enormous inverted red pyramid. The line to get in to this pavilion's probably about a football field long, and many of the folks here are in tour groups. Each group wears the same baseball caps and they're following guides who carry these neon colored flags. If you walk down the line, you kind of hear this big range of provincial dialects. People from Sichuan, Phu Yen, Guangdong. It's very interesting. People from all over China here.
Ryssdal: Scott, what's your sense?
Tong: The good news is you see a lot of Chinese entrepreneurialism. I got off the subway on the way here, and there was a guy selling these little squatter chairs because Chinese people don't want to sit on the ground. So they sit on these little chairs all around the Expo. They cost $1.50 and they have these Expo passports. It's a fake passport and you go to each pavilion and you get it stamped. And if you don't want to do it yourself you can hire somebody for about 40 cents a stamp. So there you go.
Ryssdal: So, Rob this idea you mentioned of folks coming from all over the country, that's a little bit your experience with China and Shanghai as well, right?
Schmitz: Yeah, I mean in the 90s I spent a few years in Sichuan province as a Peace Corps volunteer and then a freelance journalist. Back then, it sort of seemed unlikely that many of my friends ever would really leave their hometowns, but that's completely changed since then. I mean, for many people who are here, this is their first trip outside their home province and this line of people really represents the rising consumer class of China.
Tong: And Kai, I have to interrupt right now, because speaking of peasants coming into the city to look at things that are unusual, there is a guy standing right here taking a picture of Rob. The term of art apparently is the "peasant stare," where they come and they look at things that are unusual, but I mean this is people from all over China coming to the World's Fair, to the Expo, to see the world and to see the strange-looking people from other parts of the world.
Schmitz: From the looks of it, they're really being very good consumers. I'm seeing a lot of Expo merchandise with the official mascot, who's name is Haibao. Sort of looks like a blue version of Gumby, and in Shanghai you see him everywhere. You know, my family has only been here a week and my two-year-old already knows his name. When we go for a walk and he sees an Expo sign he screams, "Haibao, Haibao." As far as my two-year-old is concerned, it's pretty much mission accomplished for China's propaganda department.
Ryssdal: That notion of consumerism though, Scott, that Rob was talking about, is that kind of where the Chinese economy is right now? That they want what they want when they want it and this Expo is the latest manifestation of that?
Tong: It feels that way. I have a cousin who was born and raised in Shanghai, and he has a skinnier cell phone than I do and he has this gigantic camera with this huge zoom lens, so he seems to be part of the new China. But if you added up each Chinese consumer is about one eighth of an American consumer as far as how much they purchase, so the China consumption story is still pretty early. But this is a turning point for China, where the government is trying to promote consumption and the factor into the world's sweatshop model is starting to run its course. So we're going to see a lot more of that.
Ryssdal: This expo that you're at, arguably could not have come at a worse time. Global recession and weaker demand, all of that stuff. Where do you think the Chinese economy is in the global recovery? Is it going to lead things or is it just going to start supplying things again as the demand picks up elsewhere?
Schmitz: Nobody I've spoken to here seems too worried about China's economy. I mean, China really is still growing. And last week. we say second quarter economic data that showed GDP growth slipped a little from last quarter, but economists were actually thrilled by this. Because the real concern here is that the economy is moving too fast and it needs to be cooled down. My wife and I, my son, we just moved into an apartment here, and I had a chance to talk to a lot of leasing agents and they're concerned that Shanghai's property prices were simply too high and this might be a sign of a bubble. So if there is any fear here, it's a fear that this bubble might soon pop.
Ryssdal: Scott, what's your sense after three years of covering that economy? What's the story you wish you'd been able to tell in your time there?
Tong: I think it's that right now you'd take a snapshot of China, it looks great, but there's a lot of slow motion problems. You know, it's becoming an aging society. It's running out of young entrepreneurial young people. And there's this yawning wealth gap between the rich and the poor and guess who's at this Expo? It's the people who have money. There are a lot of problem inside of China that Americans probably wouldn't think about very often, but there's enough angst to go around, I suppose. It may not be moment by moment, quarter by quarter, but you know, development can be rough.
Scott Tong on his way home from Shanghai. Rob Schmitz our new bureau chief. We were talking to them at the Shanghai World Expo in Shanghai. Guys, thanks a lot.
Tong: Thanks Kai.
Schmitz: Thank you Kai.