

One of the richest cities in China with a regime that borders on anarchism - dmix
http://reason.com/archives/2011/11/15/chinas-black-market-city/singlepage

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erikb
People are not wealthy in Wenzhou. Only the top 1-5% are. And the difference
is not comparable to wall-street. The poor people are really that poor that
they only have less or equal to $100 a month. If all in this story is true and
you read it without pink sunglasses, you can see that "Guanxi" means Mafia,
not relationship. These companys seriously use slave workers or at least keep
their workers in a situation that is 90% comparable to slave work. The black
market loan sharks are really more like what you know from the movies then a
healthy businessmodel. They hire killers and use them to keep the workers in
line and make the people pay back the money with incredible monthly interest.
Where do u think all the gambling boots come from? And do u think the whores
in the Karaoke bars are all students who need some extra? Who do u think is
paying back these interests if there is no knife threatining them?

What you think is happening only in bad gangnster movies is actually what is
going on in these Chinese cities and villages far away from regulatory
organisations. Not the paradise that improves peoples wealth.

(I feel the need to add that I was in in the same province as Wenzhou for a
year and had a girlfriend there who's uncle is a knife killer for the mafia
there. So it's not just my blooming fantasy speaking here.)

~~~
antihero
So basically the article is describing it as some sort of anarcho-capitalist
paradise, whereas in reality it's some sort of anarcho-capitalist dystopia.

~~~
gbog
No, reality is both. The problem with China is that whatever you say about it
is true and false at the same time. As Pascal said earlier: "La Chine
obscurcit" (China darkens).

The mafias and anarchist dystopia described by GP exists in China. In my
nearly 9 years here I have received some reflections of this (random pick: I
have spent a night near a children factory near Hong-Kong).

But saying that China, or even Wenzhou _is_ an anarchist dystopia is wrong. It
is similar to describing New-York with a picture from the Bronx during a "bad
day".

On the opposite, saying that Wenzhou and other places are economic paradise
where anyone can do whatever they want without the central government even
being aware of this is false. These coastal regions have been set up as an
experiment on economic opening by Deng Xiaoping, and Jiang Zemin and Hu Jintao
have been in fact "chosen" by him, in order to continue in the same tracks.
You can count on the current government to care about these places, and to be
ready to do whatever is needed if it goes too far.

What is happening in China right now is impressive, and such a fast mutation
is probably unseen in the world history at this scale.

It will have a great impact on the world. Will it be for the best or for the
worst? I can't be sure, but what I know is that knowing better each other,
increasing exchanges between West and East, is the best and only way we have
to push a little, just a little bit, away from the worst case scenario.

~~~
kaybe
Just to clarify: What do you mean by "children factory"? A factory having
children as workers?

~~~
gbog
Yes. I saw them all as they went for dinner. Mostly boys, aged from 13 to 20.
They didn't look harassed though, they didn't look like slaves, they looked
like kids who had grown faster than others, who bought their own shoes with
the money they made in the factory behind.

------
yaix
Having been to Wenzhou just a few weeks ago, I just can say that it is a very
ugly city, even by Chinese standards.

Wenzhou is not succesful because of less gov't involvement, but because there
is a well connected network of overseas Wenzhounese that works as the
worldwide distrubtion channels for cheep Wenzhou products.

The anarchy part is a consequence, not a cause. If you are rich in China (well
in any developing country), the law does not really apply to you, you just buy
it. Sucks to not being a millionaire in such a place.

~~~
gbog
Respectfully disagree.

China is getting its incredible growth mostly because of the relaxing of
communist idealism and the increasing dose of laissez faire allowed by the
central government.

Let Chinese do their own business, they will move mountains.

~~~
yaix
We don't even disagree on this.

In the 1990s China privatized many areas of its economy and that triggered the
development of private companies and businesses. The coal mining in Shanxi is
an impressive yet frightening example what happens when the gov't goes from
one extrem (gov't run) to the other extrem (no oversight at all).
Alternatively just google for deadly coal mining accidents.

Wenzhou is interesting not because of the "anarchy", but because it has a
working network of overseas Wenzhounese.

~~~
gbog
You said above: "The anarchy part is a consequence, not a cause." I suppose
you meant "a consequence of economical growth", because the article and other
comment said something similar to "anarchy is the cause for growth" and you
seemed to bring a counter point to the discussion.

Then, maybe you can explain why and how anarchy could be a consequence of
economic growth.

~~~
yaix
Economic growth makes a few rich, and those can do whatever they want,
especially in a society with low ethical standards. The executive or judical
powers are neutralized with money (a.k.a. corruption).

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marquis
For a very good look at life in these cities for workers see Last Train Home,
a superb, emotionally-tense documentary following a Chinese family from a
farming community as they move to the city for work in a clothing factory
(without making any statement about conditions). I found it a really
accessible and poignant film to understand a little better the Chinese drive
towards personal independence.

<http://en.wikipedia.org/wiki/Last_Train_Home_(film)>

~~~
iamjustlooking
For those that have netflix streaming <http://movies.netflix.com/Movie/Last-
Train-Home/70129380>

~~~
dmix
Note the city they move to isn't the one mentioned in the article, its
<http://en.wikipedia.org/wiki/Guangzhou>

But I still also highly recommend this movie.

~~~
marquis
Guangzhou is also in southern China and noted as a 'city of new wealth', just
a guess on my part if factory life and migration is the same (I have no
insight on this whatsoever).

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blahedo
Over and over as I read this article I was reminded of stories of London just
before and at the beginning of the Industrial Revolution, both in reality and
as parodied by Terry Pratchett as Ankh-Morpork.

...the flipside of which is that in London if not A-M, the living conditions
of the poor and unlucky in that time period were truly atrocious. That's not
directly addressed in the article, although it's hinted at in a few paragraphs
(and in the photos).

------
westiseast
This article is great, and from living in another similar city in China
(Fuzhou) I'd make a friendly reminder that it's not just Wenzhou. The media
seems to have picked up on Wenzhou only, but many other cities in the south
are very very similar. Underground banking, entrepreneurial spirit (if you can
call it that) and flagrant breaking of laws etc. are pretty common features of
_any_ southern city from my experience. Wenzhou is just a standout example of
the trend.

~~~
wisty
Is it peculiar to the south, or simply any part of China (minus Beijing) that
has any kind of development? There's a very common Chinese expression -
"Heaven is high, and the Emperor is far". If the demands of distant rulers
aren't energetically enforced, most people don't pay attention. Heck, if you
get away from Chang An street (the bit where Tiananmen square, Mao's memorial,
and the Chinese national parliament are located), most of Beijing's
backstreets are pretty relaxed. Unless you commit a violent crime, piss off an
official, or are actively revolting or dissenting the Chinese legal system
does not care.

The downside is, China seems overly reliant on two sources of revenue - land
sales, and the profits of State Owned Enterprises (government-owned
companies). Income and corporate taxes are something of a joke, unless the
company paying them is either large, foreign, or both. Given that SOEs suck up
all the capital (moral hazard - the government won't let them go bust so banks
love loaning them money) and really inefficient (especially if you account for
their free or cheap land, and special considerations, though on the other hand
they can't break the law as much as private companies), and the damage China's
housing bubble might do, they might need to think about a land tax soon (which
they seem to be already doing).

~~~
westiseast
My guess is that the 'Wenzhou' model is everywhere to some degree, but I only
really know about where I live (Fujian).

I think there's two factors - (1) is that there haven't been many great places
to invest money, so rich people throw them into houses, stock bubbles and
'alternative' non-legal investments (like lending groups). (2) is a
generalisation, but Chinese people tend to be quite speculative - I guess a
few years ago the average Brit would be happy with a 4.5% return on a 2year
bank bond, whereas many Chinese people are more willing to take much riskier
investments with possibly much higher returns.

As for ignoring laws, the whole-country model (not just Wenzhou) is that many
laws are ignored until the government decides to crack down on something. When
they decide to crack down, you react quickly. So, for example this month in
Fuzhou it's fire safety month, and everyone is suddenly getting their fire-
safety certificates in order. Next month it might be traffic, or health... who
knows :)

------
kgthegreat
Not so complicated roads though. <http://g.co/maps/cuc5p>

------
stretchwithme
"Within six years Cai was able to leverage his money and know-how into
building a factory of his own, which now employs more than 100 people."

That is why wages rise. When workers can compete with their employers, workers
have to be paid more.

~~~
colanderman
I highly doubt Cai was a typical factory worker.

~~~
yaix
Most likly he was lucky to get a connection with some gov't official, that's
the usual way you rise so quickly in China. Without Guanxi you will never get
anywhere here.

But of course he'll never tell about that part. And the Western journalist
doesn't want to hear it, because he wants to advertise "less government" with
his story.

------
noarchy
An interesting article, but the title's talk of "anarchism" is of the anarcho-
capitalist variety. It has to do with the state, and says nothing about other
forms of hierarchy and domination.

------
mling
The Wenzhou people are notoriously known for their merchant class. It was that
area where proto-capitalism supposedly first started in China.

------
namank
This is very interesting.

Is this how capitalism starts? You can't call this China's Silicon Valley (for
manufacturing), can you?

------
known
Unlike in America, Economic mobility and Social mobility are mutually
exclusive in Chindia.

------
stupandaus
The problem with these laissez-faire systems is that there is no regulation.
Wenzhou is known for speculating a lot in housing and real estate, which has
pushed development of the Chinese property bubble.

~~~
JVirissimo
"Regulation" causes investment strategies to be more homogeneous, which often
means one large bubble instead of lots of small ones. It is far from obvious
that this is a better situation to be in.

------
makhanko
How many schools are in this city? Or anyone over 10 years old automatically
gets a job at the factory? Nice!

~~~
stretchwithme
In societies that are not yet rich enough to allow them not to, children work.

~~~
kaybe
Which is also a good reason not to forbid it, because then it will be done
illegally, and abused children won't be able to get help as easily. This is
also stated by the children themselves, for example in the Bolivian Union of
Child and Adolescent Workers (UNATSBO).

~~~
stretchwithme
pushing voluntary arrangements underground rarely improves conditions, so I
completely agree.

