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China: 5-year plan

A journey through China’s middle class

Kai Ryssdal Jul 14, 2011
China: 5-year plan

A journey through China’s middle class

Kai Ryssdal Jul 14, 2011

Kai Ryssdal: Our series this week, The Five-Year Plan, takes us to China and the live broadcasts we did from there in 2006. We went back last month to see what’s changed for them and for us. You know how we’ve been saying the past couple of days how fast things are changing in China? Longtime China-watcher Jim McGregor says pretty much the same thing, just better.

Jim McGregor: A generation lasts five years because people five years apart are growing up in a different China.

Our story today is in two acts, two economic generations by McGregor’s reckoning. Starting with 36-year-old contractor Li Yong Qin. On a hot sweaty late Friday afternoon in Chongqing, we ride the 113 city bus home with Mr Li. He’s been checking progress at one of the half dozen apartment renovations he’s got going on. It’s about an hour on the bus tonight. Faster than usual, he says.

A 20 minute walk and then 11 floors up in a tiny little elevator to his apartment. It’s small, but by Chinese standards, heck by Manhattan standards, there’s plenty of room for the four of them. Yeah, four of ’em. They’ve got two boys, paid the fines under the one-child policy. And one of the kids, at least, is eager to practice his English.

Ryssdal: Hello.

Boy: Hello.

Ryssdal: How are you?

Boy: I’m fine.

Ryssdal: You are fine. Good.

As Mr. Li cooks dinner, his wife and I talk about how their lives have changed the past five years.

Mrs. Li: Life is better than before, every day is a holiday.

Did you get that? Every day is a holiday. The Li family is the very picture of upwardly mobile China. He brings home 8,000 yuan — about $1,200 a month. They’ve got a flat-screen TV, a fridge, a water cooler, two air conditioners with a third on the list of things to buy next.

Mr. Li: We make more money, but we spend more at the same time.

Mrs. Li: We couldn’t afford anything before, but we still got the refrigerator, the TV set, and we bought the apartment in 2007.

But it’s not just the big ticket items they’re spending their money on. Inflation hit a three-year high last month when we were there — 6.5 percent. So the price of daily life — bus fare, food, all of it — is rising fast. Still, the Li’s have a lot of hope about the future.

Mr. Li: I hope my sons’ lives their lives are better than ours. I hope they can make more money, have a better job than me. I want them to go to university. I hope they can find a better employer, make money easier.

The Li’s have a lot more money than they did just a couple of years ago, but they’re still saving more than half of what he brings home.

China analyst Paul French explains.

Paul French: People who have been doing extremely well — who’ve got themselves a nice little apartment, who’ve got themselves a nice car — suddenly wake up tomorrow and their mom’s had a stroke. Within a matter of weeks, the bank accounts of the single child are emptied. There is no net. The ability to just fall and keep on falling down until you touch an absolutely horrible rock bottom is the massive, major difference between China as it is at the moment and most of the societies that we come from in the West.

It wasn’t quite rock bottom, but not long after Mr. Li’s wife — Chang Jia Sheng — started up her bakery business a couple of months ago, an industrial mixer took a chunk out of her arm. Five thousand dollars for medical expenses. No insurance. Another $12,000 down the drain from losing the business because the flour she’d bought was tainted. The risks of the relentless Chinese economy are real. But so too, says Paul French, are the possibilities.

French: The ability to go from famine to gluttony in two generations, well that’s a hell of an achievement. China is not going to look at its past. Right? It’s not the kind of country where, like a lot of our countries, we can turn around and say things were better in the past. Things were not better under Mao.

Act two of our trip through the Chinese middle class starts with with 28-year-old Dora Chai.

Dora Chai: I would say that I would make the best out of the job and try to learn as much as I can, and see where that takes me.

Dora fits the McGregor construct perfectly. She’s five years younger than the Li’s out in Chongqing. Economically, though, she’s living in a different country. She’s got a college degree, a great job in PR at the Chinese internet giant Alibaba that she loves, and lots of online shopping with her two credit cards.

Chai: I am a shopaholic. I spend a lot of money on Taobao. I’m pretty guilty about it as well.

She’s got a new apartment, a cute new Peugeot 307 Hatchback, and a keen awareness of what economic independence means for her future.

Chai: As young people, we are confident, we are new in this world. We want to see where our potentials are. Happiness is not about you get all the things you want, it is about you get the things you want after you work really hard for it.

Dora Chai and her economic generation make the place we started today — the marriage market in Shanghai and being married by 30 — seem very far away. Old-fashioned, even.

Ryssdal: You are 28.

Chai: Yes.

Ryssdal: You don’t have much time left?

Chai: Why?

Ryssdal: I don’t know. You’re the one…

Chai: I have a lifetime left. Why? Like, when is my deadline?

Ryssdal: I don’t know.

Chai: Then why is there not much time left? Property is sort of the leverage to get yourself higher up in the marriage marketplace. But also I believe in myself. I think I have the ability to make money, to stand on my own feet. So it’s necessary, but I don’t see the rush.

She might not see the rush, but the rest of the Chinese economy sure does. Not about marriage. But about business and quality of life, and those rising expectations we’ve been talking about all week. And therein lies another challenge for the Chinese government says China hand Jim McGregor.

McGregor: The government runs scared of their people’s expectation. Because their only legitimacy is performance. It’s not like they have electoral legitimacy. When China talks about its own kind of democracy, they’re not talking nonsense, that’s what they really believe it. They believe their form of democracy is they have to perform in order to please their citizens.

So tomorrow on the broadcast, we wrap up The Five-Year Plan with American companies doing their best to please the citizens of the biggest market on earth.

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