During the Senkaku/Diaoyu imbroglio following the Sept. 7, 2010 collision between a Chinese trawler and a Japan Coast Guard patrol vessel off disputed islands of those names in the East China Sea, some NHK and Asahi reporters emphasized that the anti-Japanese demonstrations in China were not only or even mostly about popular anger toward Japan.
Rather, some argued that widespread social discontent among the Chinese found a sanctioned outlet in the street protests. Taking to the streets to support the government and show the world the strength of Chinese nationalism provided convenient cover for other grievances.
People in Chengdu dismissed this analysis as wishful thinking, maintaining that the demonstrations were first and foremost driven by anger over Japan’s actions in the disputed territory.
However, almost everyone I spoke to during my visit in early December openly complained about widening disparities and widespread corruption among Chinese Communist Party (CCP) officials.
Indeed, the two issues are linked inextricably, as party officials widely stand accused of using their position to feather their nests and take advantage of the enormous opportunities in China’s booming economy. One intellectual told me that the party had jettisoned communism and instead promotes materialism and nationalism to remain in power.
The party does get kudos for having lifted so many out of abject poverty in such a short time, but in doing so, it has raised expectations it can’t meet. There is palpable frustration among students, many the first in their families to attend university, about dim employment prospects and the mismatch between their aspirations and probable outcomes.
University students shared their anxieties about the future and confessed that they anticipate bleak job prospects. These students have set their sights higher than the types of low-end jobs that China has been generating. Jobs at the higher end are expanding, but competition is very stiff. It is no wonder that students seem dissatisfied, openly complaining about government corruption, gross inequalities, cramped dorms, inadequate facilities and little hope for the future. They worry that the economic juggernaut will sputter just as they embark on their careers.
One overseas Chinese working in the region explained that even if 300 million Chinese are to some extent enjoying a bare-bones middle-class life, that leaves a billion still mired in poverty. He spoke of people he sees in central China’s Gansu Province, one of the most remote and poor in the country, who still live in caves and lead lives not that different from those of their ancestors.
Traveling from Chengdu to Chongqing on a sleek high-speed train — a two-hour trip that used to take 12 — one appreciates how far China has come. Yet the 21st- century time machine zips through large swaths of the 19th century where grim villages of smoky hovels underscore the immense urban/rural divide.
Chengdu’s eye-stinging, sinus-clogging smog is fed by endless traffic jams, one dubious sign of prosperity. This is a country where everyone is a new driver (i.e. awful) and the rules of the road, such as stoplights, are taken to be mere suggestions rather than compulsory signals. The never-say-die, entrepreneurial attitude of the Chinese is evident in driving habits. Whatever works.
One taxi driver decided that the best way to get me to my destination was to take a shortcut, even if that meant we headed into four lanes of oncoming traffic. Unconsoled by his, “Don’t worry!,” my faith flagged, but my Moses, horn blaring, parted the traffic and we emerged unscathed. Vindicated, he smiled broadly as he pulled up at the station, at least three minutes sooner than if we’d gone the boring route obeying traffic rules.
Car culture has taken hold among the Chinese in a big way. Alas, they are selling cars faster than they can build new roads, transforming the existing streets into slow-moving parking lots. People who can afford a car tell me it is all about making a statement about one’s status — meaning buying more car than you can comfortably afford. One guy told me that a car is like a beautiful woman, because a man will do anything and spend any amount to get the one of his dreams.
Romance aside, a car has to be big and flashy and obviously expensive. Luxury SUVs abound, and whoever owns the Porsche Cayenne dealership is raking it in. While these vehicles are pricey anywhere, in China they cost some $200,000, and I have never seen so many as I did in Chengdu.
The Chinese government released data at the end of 2010 indicating that urban housing costs the equivalent of 20 times the average salary of middle-class urban workers. During the height of Tokyo’s real-estate bubble in the late 1980s, housing units cost about eight times average salaries. A survey conducted by the Chinese Institute of Finance and Trade Economics in 2010 estimated what it termed the “bubble index” (a measure of a property’s selling price over its fair value) for 35 cities, and found that market real-estate prices were on average inflated by 29.5 percent. Fuzhou is the frothiest of markets, notching a whopping 70.3 percent on the bubble index, while Beijing stands at 49.6 percent.
The widespread extent of overheating has prompted the government to boost interest rates, but China faces the lethal mix of relatively cheap money, high levels of leverage and one-way expectations in property markets — a problem that imploded in Japan 20 years ago with lingering consequences.
Aside from letting some air out of the bubble, the government also has the gargantuan task of providing affordable urban housing to the tens of millions of Chinese who are migrating to cities and those already living there who are being displaced by redevelopment projects.
Envy is insidious, and a growing problem, given China’s glaring disparities. Most Chinese have not been invited to the party and find themselves on the outside looking in, watching a class of nouveau riche splashing about in pricey cars and living large. This envy is fraying social cohesion and fueling anger against the CCP.
So, what can the party do for the vast majority of Chinese who are not sharing in the miracle — and how will it respond if the bubble bursts? The onward and upward story has not run out of momentum, yet, but the incredible achievements of the recent past have inflated expectations that will be increasingly hard to meet.