One Billion Customers - James McGregor [8]
I also traveled throughout the country. I witnessed firsthand the official efficiency and private practicality of the Communist party. Everywhere I went, from dust-blown Qinghai in the northwest, to sweaty and humid Guangdong in the southeast, party and government officials from the top to the bottom would mouth the latest party line. But once the official political regurgitations were over, the talk always turned to business. I found a country littered with wasted talent—bellboys with economic degrees carried my bags and highly trained engineers drove my taxis—and ravenous to resume progress.
Business Thoroughbreds
I found that despite forty years of Communism, the mainlanders were just as ferocious and thoroughbred economic animals as their cousins in Taiwan and Hong Kong. I met Cao Bing on my first reporting trip to Guangdong province, adjacent to Hong Kong. He sat next to me in the first-class section of the airplane from Beijing. A short man with a stubbly beard and disheveled hair, he was wearing blue jeans, a green sweater with holes in it, and a pair of tattered Nike sneakers. He hugged a black gym bag protectively as we took off. For most of the flight, he poked like a maniac on the keys of a tiny calculator and recorded his calculations on scraps of cardboard from a cigarette carton. I thought he was deranged until we started chatting. Cao lived in the Golden Hero massage parlor next to the Guangzhou city airport. He said that he flew around China twenty-five days a month. He also whispered that he had $20,000 U.S. dollars in the gym bag. China didn’t yet have an official foreign exchange trading system, so Cao had established a nationwide foreign exchange business out of the massage parlor. Cao had street currency traders working for him in a dozen major cities, where they stood outside hotels and traded the Chinese currency, renminbi (RMB) for dollars with foreign tourists. His profits came from arbitraging the different street exchange rates in various cities. He and his partners flew around China selling dollars where they got the highest price or buying them where prices were cheap. This was a forty-five-year-old man with an eighth-grade education who had previously been a tobacco grower in the far west province of Yunnan.
A little later, in Shanghai, I met a man who called himself Millions Yang, a forty-year-old steel factory worker with a jumble of bad teeth and a bundle of big ideas. With a ninth-grade education he was making the then-unheard of sum of $100,000 a year from his base in a seedy coffee shop on the balcony of a dilapidated movie theater in the city’s former French quarter. Millions got rich by buying government bonds from workers who were forced to accept them as part of their pay. He bought them for pennies from workers in remote towns who figured they were worthless paper, and brought them back to Shanghai and sold them for huge profits on the city’s nascent bond market. While the business models that Cao and Millions had formulated were crude, they were pioneers in China business practices that prevail in much more sophisticated forms to this day: mining the cracks in half-reformed systems and arbitraging between the state and private economy.
Mad for Money
The speed at which China went from communism to embracing capitalism should be no surprise. This is a country where the traditional greeting for Chinese New Year, the equivalent of saying “Merry Christmas,” is Gongxi facai, or “Congratulations on getting rich.” Similarly, a central part of funerals in China is the burning of fake paper money to send assets for the departed in the afterlife. In southern China, papier-mâché mansions, luxury cars, and entertainment centers are burned to provide some extra comforts. At weddings, guests line up at a table outside the reception hall where their red gift envelopes of cash are ripped open, counted, and recorded as everybody in line watches.
Given the distrust