China’s forecast for the year of the dragon

Rob Schmitz Jan 20, 2012

China’s forecast for the year of the dragon

Rob Schmitz Jan 20, 2012

Kai Ryssdal: Next Monday is a big day on the Chinese calendar. It’s Chinese New Year — the year of the dragon, to be precise — widely considered an auspicious sign to be born under.

Whether you believe that or not, 2012’s definitely not going to be a boring year in China. Economic growth is slowing. Inflation’s still high. The real estate bubble is still a bubble. And to top it all off, for the first time in a decade, there’s going to be a leadership change Beijing.

All over China this week, people have been traveling — tens of millions of migrant workers going home for the holiday. So we sent our man in Shanghai, Rob Schmitz, out to the train station to talk to some of them. Hey Rob.

Rob Schmitz: Hey Kai.

Ryssdal: So you went out and you talked to people, literally, all over the country — because that’s the way it goes this time of year. What did they saying? What are they talking about?

Schmitz: I’m going to start this out by playing some tape.

Speaking in Chinese.

Schmitz: So I get to the train ticket line — lots of people of course. I pull out my microphone. Everyone sees I’m a journalist and you’ve been in this situation — it’s sort of like bringing out a gun. So I break the ice. I ask one guy how long he’s been waiting in line and everyone responds.

Multiple Chinese voices

Ryssdal: Lots of screaming, lots of talking. What are they mad about? ‘Cause clearly they’re mad, right?

Schmitz: They are. They’re mad it’s becoming more difficult to buy tickets. This year the government thought it would make buying train tickets easier by making tickets available online. Bad idea.

Ryssdal: How come?

Schmitz: Because the are hundreds of millions of people in China, like these guys, who live on less than a few dollars a day. They just don’t have the means or the know-how to hope online and buy tickets. Here’s some tape from one man I spoke to about this, Zhang Weishang.

Speaking in Chinese.

Schmitz: So Zhang’s simply saying it’s not fair. He’s poor and uneducated and he has no access to a computer, much less the internet. As he’s telling me this, a swelling crowd of people watch us and start chiming in-so many people that the police finally are called in.

Ryssdal: Which not the way things usually happen in China — it’s against the social harmony, right?

Schmitz: No it’s against the social harmony. And finally the cops finally left, but what’s clear is it’s a bigger issue than just train tickets. It’s a reminder that the wealth gap is widening in China. And this train ticket fiasco really hits a chord because train travel has always been within the means of many working migrants in China. Now you’ve got these luxurious bullet trains, online ticketing — it’s becoming a system that favors the rich.

Ryssdal: Give me the context though Rob. Because we learned earlier this week that the Chinese economy is slowing — GDP growth is slowing, not a lot but it’s slowing — so what does that do for this wealth gap and the inequality.

Schmitz: Well, any year of an economic slow down in China is not a good year. But this year especially — it’s a political transition year in Beijing. President Hu Jintao will step down, making way for a new president. I asked a bunch of people in line what they hope the new leadership will do for China. Pretty much everyone I spoke to gave me an answer like this one-here’s a little tape from Cao Xiaobin, he’s a construction worker from Western China.

Speaking in Chinese.

Ryssdal: What’s he saying?

Schmitz: Cao’s saying that the price of food is going up at a rate of 6 or 7 percent while his salary only went up 3 percent last year. He says if this keeps up, he’s not going to be able to survive on what he makes. He thinks the new leadership will need to focus on bringing more people into the middle class. The last thing he told me was really interesting. He said “being poor in China is becoming more difficult.” And I think that pretty much sums it up.

Ryssdal: What — if anything — is the government saying about this? I mean they have been trying for decades on bringing more people into the middle class.

Schmitz: Yeah, and they’re going to have to do it or else they’ll be out of a job themselves. One thing the government’s done recently is it’s raised the poverty line. So what that did was it automatically gave welfare benefits to a 100 million people. So that was a good move. The government’s trying make it easier for people to consume more. It’s trying to raise wages with the idea that those in the middle class will buy more, and that’ll create jobs. But that’s really difficult to do in an economy that’s slowing down like China. So the year of the dragon will be an interesting one in China.

Ryssdal: Rob Schmitz is Marketplace’s China correspondent. He joins us from Shanghai. Thanks, Rob.

Schmitz: Thanks, Kai.

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