China lives in two different worlds
Originally published in the Australian Financial Review on 31 March 2017.
In Beijing, the future has already arrived. At least in part. On the one hand, tech innovation has revolutionised the average Beijinger's everyday life. On the other, going to the bank or getting a SIM card can take hours, and require piles of paperwork. This two-track futurism reflects the difference between the private and state-owned sectors. It also demonstrates what "economic reform" in China could mean in practice, and raises the question as to whether there is a fundamental tension between the goal of an innovation-driven economy and the non-negotiable necessity of a politically stable state.
The Weixin messaging app (Wechat in English) is a good example of this enormous shift. On top of messaging, it can be used to order food, unlock rental bikes, buy groceries, book travel, order taxis, and donate to charity – among other things. Weixin accounts are linked to debit accounts so that users can pay for things directly. Everyone is using it, from hipsters to grandparents. You now scan a QR code down at the local market to buy your vegetables. In some places it's the only way to pay – they don't accept cash, and many never accepted credit cards anyway. If you don't have Weixin wallet, it's hard to get around.
It is tempting to see this kind of innovation as a signal that China is hurtling head first into the globally interconnected economic future. This hyper-modern e-lifestyle fits neatly with Premier Li Keqiang's messaging about China's commitment to the global economy during his recent visit to Australia. It is part of the government's "China 2025" initiative to comprehensively upgrade Chinese industry, one key goal of which is having innovation-driven manufacturing.
However, this is by no means the whole picture.
Inaccessible to foreigners
Firstly, and perhaps least importantly, most of this tech innovation is virtually inaccessible to foreigners. To access Weixin wallet, you need a Chinese phone number and a Chinese bank account. Many of the services are, for now at least, only in Chinese. There is little to suggest that it was almost a decade ago that Beijing had a stated aim of being an international city, and declared itself to have arrived on the world stage with its hosting of the 2008 Olympics.
Without even beginning to contrast this with Chinese rural life – just considering life in the capital – an equal and opposite Leviathan bureaucracy lumbers on. Indeed, it has in many tangible ways become more difficult to negotiate than in recent years. For example, where once buying a China Mobile SIM card involved a quick trip down to the local shop, it now requires a pilgrimage to a central office where you choose a phone number from a computer; get a slip of paper with that number on it to take to Counter 1 (queue); produce your ID documentation, have it photographed, have yourself photographed; receive a piece of paper to take to Counter 3 (queue); pay; receive a receipt to take back to Counter 1 ... etc. It can take over an hour, and that is for a Chinese-language speaker.
Much of the state sector in China is renowned for being hierarchical, risk-averse and under-resourced. President Xi's anti-corruption campaign has further exacerbated this situation – as he recognised with his declaration in the recent NPC meetings when he stated that "doing nothing" was just as bad as being corrupt, and would be punished equally severely.
Ideological space tightening
While the government recognises that innovation is critical for China's economy to flourish, the state has by no means rolled back in order to allow for that to happen. In fact, the state appears to be increasing its public presence. Both Chinese and international residents alike have told me they feel the ideological space tightening, and the messaging around what is and isn't acceptable is increasingly clear.
For the moment, this is of course related to the 19th Party Congress to be held later this year, in which President Xi will take up his second term in office. Stability and security are always absolutely paramount in the lead-up to these huge meetings, held only once every five years.
In the longer term, how the Chinese government balances the recognised need for innovation with the need for social stability will be a very delicate challenge – which they no doubt fully appreciate.
