When will an objective history of China’s 1950 land reform be possible?

Walking through the Road of Rejuvenation, the permanent exhibition on Chinese history at the National Museum of China, it is easy to see a lot of gaps. The Great Leap Forward of 1958, and the Cultural Revolution of 1966-76, are notably mostly by their absence. These are now universally acknowledged as “setbacks,” and if official history and propaganda does not really know how to talk about them, neither does it actively defend them. But I found it interesting that other Mao-era campaigns, such as the land reform of 1950, are not similarly glossed over.

In fact they are proudly celebrated, and justified in language that does not seem to have changed in decades. According to the official line, land reform was necessary to break the pattern of feudal exploitation in which a tiny landlord class controlled most of the land and trapped farmers in poverty. The reform was indeed a massive social upheaval, in which over 10 million landlords were expropriated, and more than 40% of China’s farmland was redistributed. So it was hard not to feel some awe when I looked at the piece of paper that started it all, preserved for posterity:

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The June 1950 order promulgating the Land Reform Law, on display at the National Museum of China

Yet this official caricature of pre-Communist China as a nightmare of exploitation and inequality has not stood up well to historical scrutiny. The historian Frank Dikötter for instance argues, in his The Tragedy of Liberation: A History of the Chinese Revolution 1945-1957, that the very term “landlord” (dizhu) was a political invention rather than a reflection of social reality:

The term was imported from Japan in the late nineteenth century and given its modern formulation by Mao Zedong. It had no meaning for most people in the countryside, who referred to some of their more fortunate neighbours as caizhu, an appellation that implied prosperity yet carried no derogatory undertones. There were also plenty of less respectful labels such as ‘big belly’ (daduzi). As S. T. Tung, publisher of the Chinese Farmer with a doctoral degree in agriculture from Cornell University, put it at the time, ‘China has no “landlord class”.’ There is little question that absent landowners abused their power, while malpractices were rife in the countryside, but the country did not have a dominant class of junkers or squires, and nothing equivalent to serfdom.

There is also data available from contemporary surveys that has allowed economic historians to provide at least approximate estimates of the extent of inequality in the pre-Communist countryside. Tian Chuanhao, a professor at Zhejiang University, in a recent article reported that he used a 1932 survey under the Republican government to estimate the Gini coefficient for land ownership at 0.543. He also cites another estimate of 0.563, based on the first world agricultural census of 1930.

Scholars have also used that census to estimate the inequality of land distribution for many other countries, and China’s level was not extreme for the time: a number of European countries and their colonies had land Ginis of around 0.7 (the data in the chart below are from a 2005 paper by E.H.P. Frankema). “From the Ming and Qing dynasties through the 1930s, the inequality in China’s distribution of land was not severe, and in a global context was middle-ranked,” Tian writes.

land-Gini

If inequality in China’s countryside was not extreme before land reform was carried out, neither was it eliminated by the land reform. Carl Riskin’s classic history, China’s Political Economy: The Quest for Development since 1949, works through data both before and after the reform and concludes:

Inequality of land ownership and operations was greatly reduced, and with it the inequality of income distribution. Yet in the end, the average rich peasant owned and operated more than twice as much land as did the average poor peasant, and the middle peasant 50% more. Land reform had deliberately stopped short of complete economic equality and was incapable of eradicating rural poverty.

Indeed, economic conditions were in some ways worsened by the reform, and the class structure that emerged was inherently unstable. The chief significance of the land reform therefore was in creating the political and social conditions for change in the direction planned by Mao and the Party–towards a collectivized and ultimately industrialized agriculture.

Land reform was indeed very effective in achieving its political goals: eliminating the rural gentry as a potential counter-revolutionary threat, destroying old patterns of authority and deference, and creating loyalty to the new government among those who received land.

And only the fact that land reform was primarily a political campaign against “class enemies” can explain why it was so violent and disruptive: landlords did not simply have their land confiscated, but were publicly denounced at mass meetings, beaten, and killed. On most estimates, at least a million people died during the campaign. Here is Dikötter again with a depressing comparison with the contemporary land reforms in other Asian countries:

In March 1951 a letter was published in the People’s Daily. Several farmers from Hunan had written to ask about land reform. ‘Why doesn’t Chairman Mao just print some banknotes, buy the land from the landlords and then give us our share?’  It was a good question. That was, after all, what was happening in the island fortress of arch-villain Chiang Kai-shek. Between 1949 and 1953, large landowners in Taiwan were compensated with commodity certificates and stocks in state-owned industries for the land that was redistributed among small farmers. This approach impoverished some wealthy villagers, but others used their compensation to start commercial and industrial enterprises. Not a drop of blood was shed. The experience was based on Korea and Japan, where land reform was successfully carried out under General Douglas MacArthur between 1945 and 1950. Not a drop of blood was shed there either.

But it is not yet politically acceptable in today’s China to describe the 1950 land reform as a violent, wasteful political campaign that, by preparing the way for agricultural collectivization, contributed to even more loss of life in the famine that resulted from the 1958 Great Leap Forward.

The musty old Maoist justifications for land reform are not just repeated in official propaganda, but are actively asserted against even mild challenges. The most prominent recent example is the public controversy over the 2016 novel Soft Burial (软埋), which features an older woman dealing with her troubling memories of land reform. There is a good summary in the English edition of the Global Times; here is an excerpt:

Detractors of the novel believe that by sympathizing with the landlords, the novel is discrediting land reform, a major feat of the Communist Party of China (CPC), and therefore challenging the CPC. “Soft Burial is a downright anti-Communist Party novel,” one article, written by a commentator called Chun Lin, asserts. “We have to be cautious about this novel, and criticize it thoroughly.” …

Guo Songmin, an ardent Maoist and political commentator who used to be a pilot in the People’s Liberation Army Air Force, thinks the work aims to discredit land reform and ultimately the legitimacy of the CPC. “There should be a political bottom line in the publishing industry, and works that intend to subvert the government should not be published,” he told the Global Times.

“The land reform and the new democratic revolution are important steps in our history. Without them, China could never have achieved what it has become today,” he said.

Since this article was published last year, Soft Burial appears to have been effectively banned.

 

Why was Kornai wrong about the sustainability of China’s market socialism?

I put János Kornai’s The Socialist System: The Political Economy of Communism on my best books list for last year, but I’ve been slow in writing something longer about it. It’s taken some time for me to think through how to understand China in the context of his arguments.

Kornai’s book is brilliant in its diagnoses of the internal conflicts and problems of “market socialism” or “reform socialism”, in which market mechanisms are permitted but the Communist Party maintains political primacy and a large public sector. This is a still a pretty accurate definition of China’s system. There were so many moments while reading when I wanted to shout out loud in recognition: “Yes! That’s exactly how it is!”

Yet the book finally concludes that market socialism is an inherently unstable and unsustainable system that cannot last. Essentially Kornai argues that the combination of a weakened version of state intervention and the half-hearted embrace of market competition enjoys the vices of both systems and the virtues of neither. A government that no longer truly believes in socialism cannot enforce its plans, while market forces are allowed to operate only inconsistently, so that they amplify rather than alleviate distortions. The inevitable accumulation of economic problems means that the public and officials get fed up with the system and eventually decide to jettison it entirely.

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It seems fair to say that this argument has been disproved by how China has developed since Kornai’s book came out (it was written over 1986-91, and published in English in 1992). China’s market socialism has already lasted longer (40 years) than the “real” socialism of the Mao era did (~30 years). And while we don’t know what will happen in the future, it is pretty clear that Kornai thought market socialism should be less stable and enduring than classical socialism, not more:

To sum up, so long as the classical system can be sustained at all, it has a degree of stability and robustness, where the system undergoing the contortions of reform is inherently unstable. There are places where it can only subsist for a short time, and others where special circumstances allow it to continue to for longer, but nowhere has it been able to survive lastingly (and the prediction from the line of thought put forward in this book is that it will be unable to do so in the future).

In fact Kornai’s book contains a pretty accurate depiction of China in the 1980s, which of course he had personally experienced: there was lots of economic volatility and back-and-forth on policy, as well as high inflation and rising popular discontent that culminated in the 1989 protests. But while similar strains eventually led other reforming socialist countries to abandon socialism altogether, this did not happen in China. Instead China in the 1990s mounted a renewed effort to strengthen state institutions and maintain economic growth, which has obviously been very successful.

So what did Kornai miss?

I think one key issue is that China’s growth potential turned out to be much higher than the Eastern European countries with which he was more familiar. Because China under socialism was still a largely undeveloped and agricultural economy, it had enormous potential for high growth driven by structural change. In this respect China in the 1980s was more similar to Korean and Taiwan in the 1960s than it was to the reforming socialist countries of the 1980s, most of which were over-industrialized and internationally uncompetitive. For instance Kornai in the book was dismissive of the potential for market socialist countries to have much success with exports–and of course a successful export sector has made all the difference for China.

This difference in growth potential was probably at least as important as the much-discussed difference between the “shock therapy” style of post-Soviet reform and the “gradualist” style of Chinese reform. Some of China’s most important reforms, such as the household responsibility system of the early 1980s and the downsizing of state enterprises in the late 1990s, were not gradual at all, but were massive changes implemented quite rapidly.

China’s reforms also went further than Kornai allowed for in his book. His generalization was that market socialist countries were willing to allow some space for the private sector, but were never willing to allow the private sector to actually dominate the economy. As a result the economy could never actually become truly subject to the key disciplines of market competition: hard budget constraints and the risk of corporate failure.

It is useless for domestic and foreign advisers to call on the governments of market-socialist economies to be more forceful and impose financial discipline; the requirement cannot be met while public ownership remains dominant.

The menaces of the center are not effective enough; firms are not even afraid they will be implemented. The separation of functions does not apply here. Is the bureaucracy, which is the state, the owner, and the manager all at once, supposed to discipline itself? The budget constraint on firms can only become hard if the firm is really separate from the bureaucracy, that is, if it self-evidently left to itself in time of trouble. The only way of ensuring this separation automatically and spontaneously is by private ownership. …

Is it possible to make the budget constraint on publicly owned firms hard under the prevalent market-socialist system? The four points above provide an unequivocal answer: No, it is not.

Footnote 35: Exceptionally, the hardness of the budget constraint on publicly owned firms can be ensured artificially if there are not too many of them and they are surrounded by privately owned firms in a capitalist system. The behavioral norms of the narrow public sector then resemble the behavior of the dominant private sector of the economy.

In this footnote I believe is contained one of the secrets of China’s success. Over time, the Chinese government has allowed the private sector to become the majority of the economy. (Kornai himself likely played a role in this by helping convince Chinese leaders that the Eastern European reforms were inadequate and not a good model for China to follow.) A larger private sector did not end the problems of state-owned enterprises, and the conflicts and unfairness inherent in the competition between state and private companies. But it did mean that state firms faced at least some market discipline, and thus that their problems did not become overwhelming.

Kornai’s book also placed a lot of emphasis on the fact that in market socialist systems, officials were typically inexperienced and incompetent at managing the economy. Their inevitable mistakes discredited both the government and the concept of market socialism. By sustaining growth over a longer period of time, China was able to establish both the credibility of its system and build up the experience of its economic managers, which in turn made growth more sustainable. In this sense its economic growth created some positive feedback loops.

So I don’t think Kornai’s analysis of how a market socialist economy functions was fundamentally wrong. He was right about the kind of economic costs that state-owned enterprises and other socialist institutions create, and in that respect his book is still a useful guide to understanding China today. But to answer the question of sustainability requires also understanding just how large those costs are, and how much they are offset by positive developments elsewhere in the economy. If underlying growth potential is high and the progress of economic liberalization is consistent, then those costs are more likely to be manageable.

These days, most people seem to agree that China’s growth potential is declining and economic reform is slowing down, or even reversing in some ways. So even if Kornai’s diagnosis was wrong for China in 1992, could it perhaps be right in 2018?

Toward a history of the siege of Changchun

2018 will mark the 70th anniversary of the siege of Changchun, perhaps the greatest atrocity of the Chinese civil war. After Communist troops led by Lin Biao failed in their initial attempt to capture the city, on May 30, 1948, Lin decided to mount a blockade, cutting Changchun off from food and fuel shipments.

The goal was to weaken the Nationalist troops by starving them, and cause enough suffering that the civilian population would stop supporting the troops. The strategy was successful, as the Nationalist forces ultimately surrendered to the Communists in October. But by the time the siege ended, probably around 150,000 people, mostly civilians, had starved to death, and roughly the same number of refugees had fled the city.

Changchun-troops

Communist troops at the siege of Changchun, 1948.

The event is still little known within China and probably even less so outside it, though in recent years more English-language accounts have become available. Andrew Jacobs of the New York Times wrote an excellent article in 2009, using Chinese published sources and his own interviews with elderly survivors, which is still probably the best short introduction. The article’s observations about the fraught nature of historical memory in China are still very relevant: public commemoration of this anniversary is highly unlikely.

The Hong Kong-based historian Frank Dikötter also devoted the opening chapter of his 2013 book The Tragedy of Liberation: A History of the Chinese Revolution 1945-1957 to the siege. In just six pages, Dikötter defly uses Chinese archival sources to convey the suffering of the people of Changchun. The event serves as a kind of synecdoche for all the violence perpetrated by the Communist Party against its real and imagined enemies, one of the chief themes of his polemical book.

A longer, more detailed and less polemical account of the siege is in Harold M. Tanner’s 2015 book Where Chiang Kai-shek Lost China: The Liao-Shen Campaign, 1948The book is primarily a military history and so it does an excellent job of putting the siege in the context of the civil war and explaining the decision-making on both sides. For instance, he makes it clear that siege tactics were unusual for the Communists, and that the political leadership including Mao was initially skeptical of Lin’s plan (though they ultimately supported it). But Tanner also does not shy away from the human cost and the tricky historical politics of the siege.

Both books rely heavily on White Snow, Red Blood (雪白血红) a 1989 book by PLA colonel Zhang Zhenglong whose revelations about the siege caused a sensation on its original publication. In a comparison that would become famous, Zhang likened the siege to the bombing of Hiroshima: “The casualties were about the same. Hiroshima took nine seconds; Changchun took five months.”

Zhang’s book was banned on the mainland, though it was reprinted in Hong Kong. Tanner also cites a 1997 book by the historian Liu Tong, The True Record of the War of Liberation in the Northeast (东北解放战争纪实) which he says comes to similar conclusions about the casualties as Zhang’s. It’s not clear if that book has been banned, though it does not seem to be in print in China any longer; Liu has also published several other books on the civil war in the northeast.

Another source on the siege that has recently become available in English, which I have not read, is a firsthand account by survivor Homare Endo, Japanese Girl at the Siege of Changchun. She was seven years old at the time of the siege. Her Japanese manuscript was first published in 1984, and Endo apparently also wrote a Chinese version, according to this interview.

While there is a long list of topics in Chinese history that deserve fuller treatment in English, it seems to me that the siege of Changchun is a deep, complex, and emotional subject very much crying out for a book of its own.

 

 

 

Privatization, growth and inequality in Russia and China

There was an interesting presentation at the AEA meeting in Philadelphia from the team working on the World Wealth & Income Database that included a comparison of how privatization and inequality developed in Russia and China (link for AEA members).

The data work is quite impressive and useful; here for instance is a lovely chart showing the trajectories of privatization across China and Russia, with comparisons to the Czech Republic and the advanced economies:

public-wealth

This doesn’t change the usual understanding that Russia pursued a “big bang” or “shock therapy” approach to the privatization of state enterprises in the early 1990s, while China moved later and more gradually, but it does illustrate it very vividly (Czech appears to have pursued a strategy somewhat intermediate between the two).

Another noticeable trend in the data, which was not really discussed by the authors, is the flatlining of China’s public wealth share after around 2006. This fits nicely with my own observation that SOE reform and privatization came mostly to a halt in the period from 2003-06, partly in response to concerns about insiders illicitly enriching themselves off the privatization process. For instance, the phrase “preventing the loss of state assets” made its way into high-level policy documents for the first time in 2003, and is still being invoked today.

Why Chinese policymakers would want to avoid a Russia-style outcome is nicely captured in another chart on the evolution of inequality:

income-share

This data seems to make it pretty clear that the extreme increase in Russian inequality was indeed closely linked to the early 1990s privatization process, as has long been clear from more anecdotal and historical accounts. Other data presented by the authors (Filip Novokmet, Thomas Piketty, Li Yang, Gabriel Zucman) show that private wealth increased in Russia largely at the expense of public wealth–in other words, as a result of the transfer of assets–while in China private wealth increased more steadily as a result of rapid economic growth and housing reform.

I’ve been quite critical of China’s policies for state enterprises for a while now, since I think the lack of progress on privatization has allowed SOEs to become more inefficient and blocked the growth and market access of private firms. So this paper was a useful reminder that in the early 2000s China’s government had good reasons for wanting to be cautious about privatization.

The paper also suggests to me that Russia had two policy failures not just one: yes, privatization was mismanaged, but it also failed to drive broad economic growth in the aftermath of privatization. These two failures were obviously not unrelated but they are also analytically separable.

I don’t think that a resumption of SOE privatization in China would mean that broad-based economic growth would suffer; quite the reverse in fact. Measured inequality would probably increase as a result of more privatization, but I also doubt that current figures are really capturing the inequality produced by corruption and rent-extraction by SOE insiders.

There is more detail on all this in the original WID papers on Russia and China, which I haven’t yet gone through closely.

Tianjin’s 1955 campaign to expel rural migrants

The recent forced eviction of thousands of migrant workers from Beijing (see this ChinaFile discussion for an overview) has been a rather depressing confirmation of what I wrote about in my socialist urbanization series of posts earlier this year. China’s urbanization policy is, unfortunately, still captive to a vision of top-down management of population flows with its origins in socialist planning.

While there were campaigns to push migrants out of Beijing earlier this year, the latest one has been notably harsher, and has attracted much more public criticism. I can’t begin to sort through everything, but one interesting tidbit did turn up in the flood of online commentary. An article from 2016, describing a 1955 campaign to expel rural migrants from Tianjin, has been reposted across the Chinese internet–without additional commentary, since the parallels are pretty obvious to everyone.

It’s interesting enough that I have translated several excerpts from it below:

After Tianjin’s port opened in 1860, rural villagers gradually developed a tradition of seeking work there, because of Tianjin’s advantageous geographical location and transport links, along with the difficult conditions in surrounding rural villages. After the foundation of New China [in 1949], the spontaneous movement of peasants into Tianjin did not decline. In just seven days in March 1953, more than 1,450 people “blindly” moved into urban districts. In the year from January 1954 to February 1955, the rural population migrating to Tianjin reached 119,923 people.

From the perspective of the government, peasants “blindly” migrating to Tianjin was not beneficial to the city or the countryside. Therefore, in 1955 Tianjin carried out its first campaign-style program of “mobilizing the blind inflows of people into Tianjin to return to the villages and work.” This program used many kinds of mobilization strategies simultaneously, and in the end, many tens of thousands of rural migrants in Tianjin were successfully returned to their villages. In the following decade, the Tianjin government repeatedly organized campaigns to return peasants to their villages, but generally their methods were based on the 1955 campaign.

The government was fairly worried about all the peasants moving on their own into the city. At the time, the Tianjin Municipal Committee said: “After these people move in, the vast majority do not find work, and become part of the city’s consumer population, adding to the burden on the government.” But this statement is not entirely consistent with the actual situation at the time, and did not help people understand the true reasons why rural people were moving to the city. According to the statistics of one police station in Tianjin for February, April and October of 1954, “after these people came to the city, 21% found steady employment, and 23% found irregular employment.” That is to say, in the area covered by this police station, 44% of the rural migrant population had found work. …

One of the ways peasants would make a living in Tianjin was to use city friends or relatives, or the labor market in Wandezhuang, to find positions as temporary workers or apprentices in factories, mines, enterprises and shops. Another was for them to carry their own simple tools and walk down the streets and alleys asking for work. …In fact at the time, because grain rationing had not yet been implemented in the cities, and urban wages were fairly high, they could feed their families. From the perspective of the peasants, moving to the city is the natural result of a rational calculation.

But this was not the case from the government perspective. The development strategy of prioritizing heavy industry limited the ability of the city’s labor market to absorb new workers. According to statistics, every 100 million yuan of investment in light industry would require 16,000 workers, but the same investment in heavy industry would require only 5,000 workers. … After the start of the heavy industry construction under the First Five-Year Plan, investment in commerce and services gradually declined. One result was that people’s life in the city became less convenient, it became harder to find places to eat or make clothes; another result was that the number of job openings shrank, and Tianjin’s job market could not absorb all the people coming from the countryside.

The large-scale migration of peasants also reduced the farm labor force and threatened agricultural stability, and with it the national plan for economic development. The propaganda of the time said: “if agricultural development cannot keep up with the demands of industrial development, and industry cannot obtain sufficient supplies of grain and raw materials, socialist industrialization cannot be achieved.”

Overall, from the government perspective, the “blind” migration of peasants to the city damaged the order of the nation’s planned economy, worsened the pressure on urban employment, reduced the productivity of the countryside and affected agricultural output. It’s worth pointing out that in 1953 and 1954, Tianjin carried out two operations to discourage rural migration, but because only regular methods were employed, they were not very effective.

Because of the increasingly serious in-migration problem, in 1955 the Tianjin Municipal Committee decided to launch the first focused, citywide operation to mobilize the migrant population to return to the villages, led by the Party committee and the government and assisted by multiple departments. This operation required all work units to “take effective measures to ensure the migrant population in a planned and step-by-step manner returns to their villages to participate in production, and to prevent continued blind inflows of external population to the city in the future.” Designated as a project with “historical significance for the work of socialist transformation,” it was Tianjin’s first campaign-style peasant mobilization since 1949, and policymakers had high expectations for its success.

“Propaganda and education” was very important to the mobilization work. Compared with the Communist Party of the Soviet Union, the Chinese Communist Party is better at techniques of “persuasion and education,” and these were used the most. … But in practice Tianjin also used administrative measures relating to labor, household registration and grain to consolidate and expand the initial results of the mobilization campaign.

From 1949 to 1954, the city government’s administration of hukou was fairly relaxed. During this period, due to the relevant provisions of the “Common Program” [the temporary constitution of 1949] on the right to freedom of movement, Tianjin basically did not restrict the transfer of hukou and migrants could apply for an urban hukou as long as they had migration permits. However with the 1955 campaign to mobilize peasants to return to their, such a relaxed policy was no longer appropriate, and in July the Tianjin Municipal Committee restricted the hukou registration of “people blindly entering Tianjin from the countryside or other places.” However, the ability of the household registration system to control migration would not have been great without its being linked to grain supply and employment.

In August 1955, the State Council and Tianjin Municipality announced the start of the grain rationing system in Tianjin. Each resident of Tianjin would be issued grain vouchers for a fixed amount of grain, depending on their work and age, and grain would be supplied according to the vouchers. Without a Tianjin urban hukou, it was not possible to complete the procedures to obtain grain vouchers, and thus impossible to buy grain. The supply of grain was also limited: in 1955, the first allocation plan called for distributing an average of 26.51 pounds per person, 2.81 pounds less than the original plan. Many people felt that this was not enough to entertain friends or family, or make festive dishes for the holidays. Because the grain quotas could only satisfy, or not even completely satisfy, their own needs,  urban residents found it difficult to assist their rural friends and relatives.

For those unemployed workers that fit the profile of those to be returned to their villages, the Tianjin municipal employment agencies stopped providing job placement services, and stopped or delayed their unemployment relief. In May 1955, the Tianjin Administration of Industry & Commerce also carried out a campaign to ban unlicensed street vendors, and to mobilize rural street vendors to return to their villages. In August 1955, the effort was expanded to licensed street vendors who met the requirements for being returned to their villages. To encourage the vendors to leave, state-owned companies stopped supplying them with goods, and local police stations limited the distribution of grain vouchers. By the second half of 1955, those peasants doing business on the streets of Tianjin could tell which way the wind was blowing. …

By mid-February 1956, when the mobilization campaign concluded, 126,324 peasants in Tianjin had been mobilized to return to their cities, and the flow of population into the city had been greatly reduced. …

Before the founding of New China, the Chinese Communist Party thought of peasants as the predecessors of workers, and that therefore in the future many millions of peasants would enter the cities and work in factories. But after the founding of New China, the government did not welcome the rural population spontaneously flowing into the cities. It thought that the building of the nation must be carried out in a planned and organized manner, and that peasants must not be blindly drawn into the cities.

The author is Wang Linran, a historian at Nankai University in Tianjin. The Chinese citation for the original article is 王凛然,《“进城”与“还乡”:1955年农民“盲目”进津与政府应对》, 《史林》,2016年,第4期,第157-168页.

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A Tianjin coop in 1956

Chinese economic history as seen through eyeglasses

I recently got a new pair of glasses from an American optician, after almost two decades of buying my glasses in China. There was definitely some sticker shock on my part: it really drove home how the relative prices of customized labor-intensive goods can dramatically differ between a high-labor-cost economy and a lower-labor-cost economy. But it also made me think about all the various places in China I have bought glasses from over the years, and how they changed as the economy developed.

The first pair of glasses I bought in Beijing, probably somewhere around 1998-2000, was from a big state-owned store on the Wangfujing shopping street (it’s not there anymore of course, the redevelopment down there has left only a few landmarks untouched). It was classic SOE retail: massively overstaffed by lots of officious middle-aged employees in white jackets, who make you fill out paperwork in triplicate just to pay the bill. But it was well known and trusted–not perhaps to give you the absolute best deal, but to ensure some basic level of quality and not completely rip you off. While there’s not much state-owned retail around these days, consumer-facing SOEs still tend to trade on that higher level of trust.

In later years I was introduced to the wonders of the “glasses city” (眼镜城): massive buildings featuring floors and floors of nothing but opticians, who will measure your prescription and grind out your lenses in a few hours. On various occasions I went to two different ones, both in the Panjiayuan area. No licensing, no regulation, no safety standards (the haze of toxic fumes was worrying), but wow, overwhelming choice and unbelievable prices. The lack of barriers to entry was also apparent in the people running the stores too: rather than the local Beijingers who staffed the state outlets, they were often migrants from places like Fujian.

Here was a rare real-world example of almost-perfect competition. The tradeoff was almost exactly the opposite of the state store: low prices in exchange for low levels of trust. With hundreds of suppliers, doing any kind of systematic comparison shopping would take more time than it was worth–so it was normal to get a friend or relative to provide an introduction to a reliable shop.

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But eventually the shopping adventure in the glasses city started to get tiring, and I wanted something less random and exhausting. My wife was also encouraging me to get higher-quality glasses. For my last couple of pairs, I headed to local-brand chain retailers. While in the U.S. it seems like the high end of the eyewear market is occupied by independent opticians and chain stores cater more to budget shoppers, it’s the reverse in China: the independent operators are in the low-end glasses city, and the larger operations go after the higher-end market.

Still, the experience was a bit more like developed-world retail. Prices are higher, but (perceived) quality is also higher. Of course there is competition, but much effort goes into mitigating its effects, and on upselling the consumer with endless options and upgrades, all presented as backed by the latest technology and medical research. You come out with a pretty good pair of glasses, but also the feeling that you did not quite understand what you just bought and are not exactly sure why you paid what you did. But overall the model is not as medicalized as in the U.S., where opticians act as healthcare providers and “prescribe” glasses–trying to take advantage of the fact that you are not supposed to bargain over healthcare costs.

These three types of shopping experience do, in hindsight, seem to match up rather nicely with the different stages of China’s economic life: from the socialist 1970s, to the explosion of hyper-competitive small businesses in the 1980s and 1990s, to the more recent phase of consolidation and oligopoly and the rising importance of branding and fashion.

I do feel a bit nostalgic for the free-for-all of the glasses city. While it’s still there, I think it’s past its prime, as rising urban incomes mean that more and more of the population is probably making the same calculation I did: pay more in order to spend less time and get higher quality. And the next stage is clearly coming, though I haven’t bought glasses online yet in either country.

Westworld in China anecdote of the day

This has to be one of the odder side effects of the normalization of diplomatic relations between the US and China in 1979:

In the middle of all this, to set the seal on new-found friendship, in early February 1979 China’s supreme leader went off on his famous trip to the United States. Screened without commentary to an astounded television audience back home, the diminutive Deng Xiaoping was paraded nightly schmoozing with his new friend Jimmy Carter and assorted U.S. moneybags. Here he was at Simonton, Texas, at a rodeo, buried under a ten-gallon Stetson. There he was, taking tea and sandwiches in the palatial ranch-house style villa of a ‘typical’ American worker.

And this was the week, too, that our local cinema, and no doubt every movie-house in the nation, chose to screen Yul Brunner in Westworld.

Westworld’s story line has leading world statesmen invited to a subterranean lair in a Nevada desert crawling with rattlesnakes. Once there, their brains and organs are dismantled, to be replaced by robotic parts. Heads and bodies are then sewn up to create an end result indistinguishable from the human original. The robot ‘leaders’ are then despatched to their respective countries where they must do the bidding of an evil West World clique bent on ruling the universe.

This daft performance over, as we trooped down the concrete spittle-covered stairs of the cinema, I was all ears for audience reaction. Almost echoing my thoughts, though more literally, an elderly farmer grabbed my coat sleeves and proclaimed loudly: ‘Probably that’s what they’ll be doing to old Deng.’

That is from Richard Kirkby, Intruder in Mao’s Realm: An Englishman’s Eyewitness Account of 1970s China; the author was teaching English in Shandong province at the time.

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