Absurdity, Allegory and China

Laobaixing: the common folk; the People in the People’s Republic of China; the cab drivers, office workers, migrant workers, small shopkeepers, beauticians, food sellers, the people on the street. In essence, it’s all those who are trying to make the staggering adjustments to survive in a nation that once tried it’s best – at least in name – to take care of the common man and woman, but has since turned into one that is unashamedly self-interested and ravenous, leaving social safety nets completely shredded and the laobaixing pushed ever-closer to the edge.

But many have already been pushed hopelessly over that edge, victims of a health care system that demands payment upfront, where those who can’t afford it are turned away to die; where farmers lose their land to officials and developers who turn productive farmland into industrial, though often temporarily profitable, wastelands; where longtime city dwellers continue to lose their humble homes to the vertical rise of high-dollar real estate schemes or, as we’ve seen in Beijing, routes for Olympic events. This is hardly news. Everyone within and without the country is reporting stories of corruption, thieving and thuggery.

In the “to get rich is glorious” era (a proclamation ascribed to Deng Xiao Ping), no one has gotten the message out that if it sounds too good to be true, then it probably is, along with the basic rule that, more often than not, to make money you’ve got to have some to begin with. If you don’t have the money, you can’t get to the right people, to the officials, who are the fast track to the gold. In a land of too many people and not enough resources, doing the math will tell you soon enough that most of those who heard Deng’s message are so deeply buried in the stacks that getting rich is something that will never filter down to them. But still they dream. And, being Chinese, they have saved: five kuai here, ten kuai there, building little nest eggs where they can. This is something that those who have a combination of connections, power and money know, which allows them the opportunity to help steal the eggs from all those little nests.

The LA Times on January 12, 2008 ran the story Trail of Risky Investments in China, concerning a pyramid scheme in northeast China (Dongbei) that almost seems comical from a western POV, if it were not so heartbreaking and indicative of the desperate lengths that many of the laobaixing are willing to go to in their scramble to keep their heads above the rapidly rising waters. The grifters, a collusive group of businessmen, officials and celebrities, headed by Wang Fengyou, the CEO of Yilishen, preyed on the hopes of poor farmers in the frozen north where life is at best, a hardscrabble grind. The scheme, which ran for 8 years before coming to an abrupt halt this past November (2007) when the pyramid collapsed and Yilishen filed for bankruptcy, was based on the selling of ant farms, which were purported to be used as a powerful aphrodisiac. After three months of feeding the ants – but you can’t look into the box – the dead ants were bought back by Yilishen at a profit, though in most cases, the marks rolled over their profits into more ant farms. When it finally folded Yilishen and their backers walked away with the equivalent of 1.2 billion USD. Through the years Mr. Wang had been praised by many in the official Chinese media, including the China Daily and CCTV, for his business skills, which, no doubt, added to investors’ confidence that they were in the right business.

As the scheme began to unravel people who’d been scammed hit the streets in Shenyang, the provincial capital of Liaoning province. On November 20, 2007 Global Voices Online reported that

Shenyang was mobbed today with furious ex-ant farmers, former employees of Yilishen, a media darling and one of China’s most well-known brands in the health supplement market, as the company has just closed, taking the huge amounts its peasant-class employees had invested with it. The city’s ant farming industry is no stranger to controversy, and neither is the company. Blog posts on the subject were quickly deleted, including most of the ones below, but a larger mass action remains scheduled for November 21.

Mark O’Neill’s story at the Asia Sentinel, A Chinese Pyramid Scheme Built on an Anthill, is a good overall report on the scheme.

Stories of officials involved in manipulating and stealing from the marginalized common folks are appearing more and more online. As they do, more draconian efforts are made to keep them from getting to the public, often with the suppression of courageous individuals who do their best to get the stories out. It is a battle that China cannot win, short of denying total access to the internet, something that would cause a degree of social unrest that even they are not prepared to deal with.

As China continues to shakily emerge, what is sorely missing in their developing equation is a centralized rule of law. I am reminded of a line by Lucian Pye, former MIT Professor of Political Science: “China is a civilization pretending to be a state.” Official corruption and its very selective prosecution underscores this point as well as exposing the Deadwood nature of the place. This is what Confucius knew 2,500 years ago and why he tried to answer the troubling question: How do you trust the guy you send over the hill to do the right thing? It is still a question that has not been answered, and one that won’t be until there are real laws that protect the people from official abuse. Now as always the laobaixing are the ones who suffer as those on the periphery continue to act in their own best interests despite the deeper social problems that they are fueling.