Interesting times in China 2009

It is also home to many migrant labourers who relocated to the construction sites and factory slums of the coastal boom-towns a few years ago. These are the hard-working humble folk whose cheap labour has built modern China.

Now, those who have lost their jobs in the coastal boomtowns are returning to their farms and villages in the countryside. Their anger and disillusionment has been a worry for the government which has directed local authorities to be pro-active in managing social instability. So far there is no news of any major demonstrations of discontent.

The possibility of large-scale social instability has diminished, however, as people realise that the government is managing this downturn better than was previously thought. The migrant workers seem to have disappeared back to where they came from, and from what I see, nobody seems to care too much about their fate. I think that this issue is a “sleeper”, however.

Middle-class folk who had been concerned about job security, their future, and whether or not they would be able to maintain their current lifestyle have relaxed a little as they see the value of their houses rise slightly due to increased demand as a result of easier credit. Although many investors had lost a lot on the sharemarket last year, they are happy now that Chinese stocks are at last heading north again. And of course, the government's fiscal stimulus program is having a positive effect in this developing region of China.

Their children are worried though. This year's graduates are going to have a tougher time than usual in finding employment. And the word on the street is that there are also fewer skilled and semi-skilled jobs around.

The good news for the central government is that the social contract is holding. That is; if it continues to manage the economy well, the people will continue tolerate its monopoly on power.

If it all turns to mud, however, then that is another story.

Mainstream China

Mainstream China is different from Beijing, Shanghai, and the rest of China's showcase cities. You get a different perspective when in China.

Few foreigners live in these places, thus life here is authentically Chinese. For example, my colleagues and friends are Chinese, my wife is Chinese, and my environment is boots-on-the-ground Chinese reality (I wipe the mud off them every day before I enter my apartment).

There are no English language newspapers, no western television programs (just the international CCTV9), and no clubs for foreigners. So I watch Chinese TV, get my news from the Chongqing Daily and from the internet, and socialise with Chinese colleagues and friends in local restaurants and tea-houses.

I hear what the Chinese man-in-the-street is saying. He reads between the lines and forms his own conclusions about what is happening around him. He is no fool, and is skilled at interpreting all the signs. What the Beijing government does not say is just as important as what it does say.

Until the economic crisis, these good folk would complain about the effects of rapid social and economic change on themselves, their careers, and their families. It is different now. They have stopped complaining. Now there is silence and deep thought. These ordinary Chinese are confronted with something they have never heard about, let alone experienced before: a western-style capitalist recession.