Going for gold in China
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Dan Fitzpatrick, Post-Gazette
Lu Hongdi refuses to move from her home in northwest Shanghai despite the government's attempts to move her so construction can begin on one of the city's many new high rises.
Click photo for larger image.
SHANGHAI -- The sun is slipping behind the neon-lit skyline of this noisy, chaotic Chinese city, and 29-year-old Ryan Martin is sweating as he lugs a cardboard case of upscale American beer inside a local restaurant, where a chef wants to taste the samples.
Sitting in the dark and empty eatery, which has nude paintings on the walls, the chef downs several complimentary glasses of Rogue Ale, Brooklyn Lager and Red Seal. "This stuff," he says after emptying several bottles, "it will sell."
China is the first gold rush of the 21st century, the place to go if you are adventurous and want to get rich fast. For Mr. Martin and his 27-year-old business partner, Pittsburgher Josh Weiner, their get-rich-quick scheme centers on persuading distributors, restaurateurs and bar owners to put imported beers in the hands of young, status-conscious Chinese professionals looking for ways to flaunt their wealth in this city of 19 million.
Mr. Weiner is among the thousands of foreigners, including many Pittsburghers, hustling to make money from the most dramatic international story of our time -- Red China's embrace of freewheeling U.S.-style capitalism.
At least 20 big Pittsburgh-area companies -- from PPG Industries to Alcoa to H.J. Heinz to Allegheny Technologies -- have offices or operations in China, joining about 49,000 other American firms hoping to capitalize on China's massive growth while avoiding the pitfalls of working in a country where the ways of doing business are opaque and complex.
China is still "the Wild Wild East," said Jack Perkowski, a North Catholic High School graduate who lost and made millions on his way to owning an auto components company in Beijing that is one of China's largest. "There isn't a place tougher," he says, followed by a laugh. "If there is, I would like someone to tell me. I'll never go there."
Three decades after China opened itself to foreign investment, the world's most populous nation is home to the world's fastest-growing economy. It is attracting some $60 billion in foreign investment annually and ranks as the largest worldwide producer of steel and coal and the second-largest consumer of oil (after the United States). It also makes half the globe's DVD players, cell phones, toys, digital cameras and textiles.
In many ways, it's like Pittsburgh of the late 19th and early 20th centuries, when the region teemed with risk-takers who turned out the building blocks of this country's industrial revolution -- steel, aluminum, glass, electricity.
Only what's happening in China is on a much more gigantic scale. Consumer spending is soaring -- the Chinese purchase 4 million to 6 million new cell phones per month, for example -- and the smog-choked, soot-stained country is undergoing an unprecedented construction and spending boom, with almost 5 billion square feet of new buildings going up last year alone.
One city in southern China, Shenzhen, took only a quarter century to mushroom from a fishing village of 70,000 to an industrial metropolis of more than 7 million -- the size of Chicago. Shanghai, China's financial capital, had one skyscraper taller than 18 stories in 1985. Now, it has 4,000 -- twice the number in New York -- with another 1,000 scheduled to go up by the end of the decade.
Poverty still exists on an unimaginable scale, with 300 million people living on less than a dollar a day, many of them in the vast rural countryside of inner China. But with people now free to buy their own homes and make their own money and with demand still rising for low-skilled labor along coastal China, another 300 million to 400 million were able to climb out of poverty in just a quarter century.
Many experts believe it is inevitable that China will surpass the United States as the world's largest economy in two or three decades, sparking concerns about what it will do with its economic clout and military might. But others on both sides of the Pacific see nothing but opportunity and are moving as fast as they can to cash in on it.
Perhaps the greatest irony of China's multilayered transformation is that it developed amid the iconography of communist revolutionary Mao Zedong, a foe of the West who united China under his leadership but also killed millions in the name of "class struggle."
Mao is still a national hero here 30 years after his death, appearing on every denomination of the yuan, and plenty of T-shirts, posters, buttons and medallions. People still line up by the thousands to view his body at Beijing's Tiananmen Square and gaze at the solemn portrait of Mao that hangs from the Gate of Heavenly Peace.
But Mao's "great disorder under heaven" is no longer the ruling ideology in this country -- though the 1989 crackdown in Tiananmen Square and the country's aggressive monitoring of Internet use prove that Beijing will still use force and intimidation to maintain order.
The person most responsible for the shift from socialist state to marketocracy is Mao's successor, Deng Xiaoping, who opened China to foreign investment in the late 1970s, turbocharged economic reforms in the 1980s and 1990s with special business zones and proclaimed, famously, that "to get rich is glorious." He called the new system: "Socialism with Chinese characteristics."
One woman's fight
Not everyone in China is pleased with the new system -- even in Shanghai, the most modern of Chinese cities, an intoxicating mix of elevated highways, space-needle towers and the world's fastest train (traveling close to 300 miles per hour and costing $1.2 billion to build).
Shanghai is in the middle of a grand urban experiment, with 1 billion square feet of office, retail and residential space (more than three times the space currently available in Manhattan) currently under construction -- shopping complexes bigger than Minnesota's Mall of America, office buildings and living complexes featuring as many as 30 residential towers apiece, all alike, all new, some costing as much as $5 million per unit, many with names such as "Palais de Fortune" and the "Skyline Mansion" meant to evoke wealth and privilege.
"Better City Better Life" is how the city explains the construction, which goes on day and night. But millions of people are being displaced, often against their will, with government land seizures.
Among those fighting such a move is 69-year-old Lu Hongdi, a former kindergarten teacher who lives in northwest Shanghai, in a light teal-green house with tiny red shutters. Her family moved to the house in 1937, as the Japanese bombed much of Shanghai, and she now lives there with her husband, also retired, sharing two rooms separated by a green piece of cloth.
She originally agreed to relocate nearby for developers who want the land for apartments, but when she received an official order to leave, the contract had her moving far away to the suburbs. She refuses to go, claiming the development company and local court "forged" the contract and "cheated me."
The only one left on her block and surrounded by huge piles of bricks and dozens of new apartment towers and signs detailing her plight and that of "millions'' of others forced to move, Mrs. Lu promises a fight "to the end.'' Jabbing her hands in the air, she adds: "I really don't mind going to prison."
There are other dark components of China's boom -- illustrated by the 87,000 demonstrations and riots across the country last year, up 10 times from a decade ago, according to government figures. And all the growth and heavy use of coal-fired power plants have made it the second-largest producer of greenhouse gases, behind the United States, with a pall of smoke and soot and dust hanging over many of its big cities. Sixteen of the world's 20 most polluted cities are in China. There are also concerns about a weak banking system weighed down by loans that are deep in arrears, with little prospect of payback; widespread corruption and bribery; a widening gap between rich and poor, with the average factory worker still making little more than $1,000 a year; and the central government's ruthless repression of anyone deemed a threat to the state, from the Falun Gong religious sect to Internet bloggers.
Some experts believe the forces of economic freedom will inevitably create the demand for political freedom -- but that could be a bumpy ride at best. China "is on a course it can not reverse," said Dennis Unkovic, a Downtown lawyer with Unkovic & Scott who helps local companies do business in China.
Back at that restaurant in Shanghai, where the young Pittsburgh entrepreneurs are trying to sell some beer, the chef who approved of the American ales disappears into the kitchen and sends out plates of his specialities, from quail's eggs to shrimp.
Then he invites everyone to a party on The Bund, Shanghai's Old World strip that pulses with tourists and fun-seekers. At the club, they pile out of the car, take the elevator upstairs and sip wine late into the evening, spires of light and neon visible along the stretch of the Huangpu River below.
Later, on the cab ride home, the Americans sound off on the ways in which they are enamored with this city, all the new buildings, the endless opportunities and possibilities. "You can feel the excitement in the air," Mr. Weiner said.
Dan Fitzpatrick, Post-Gazette
With the Chinese economy rising fast, millions of residents are being pushed out of the center of Shanghai and other big Chinese cities to make way for new, expensive housing high-rises.
Click photo for larger image.Dan Fitzpatrick, Post-Gazette
Twenty-nine-year-old Ryan Martin is part of a Pittsburgh operation trying to sell expensive American beers to newly-wealthy Chinese.
Click photo for larger image.
First Published November 19, 2006 12:00 am