The End of the Chinese Dream

As China's economy continues to trend downward, Beijing's elites are sparking a new, palpable frustration in the general population.

BEIJING – In June, a Chinese friend of mine who grew up in the northern industrial city of Shenyang and recently graduated from university moved to Beijing to follow his dream -- working for a media company. He has a full-time job, but the entry-level pay isn't great and it's tough to make ends meet. When we had lunch recently, he brought up his housing situation, which he described as "not ideal." He was living in a three-bedroom apartment split by seven people, near the Fourth Ring Road -- the outer orbit of the city. Five of his roommates were young women who went to work each night at 11 p.m. and returned around 4 a.m. "They say they are working the overnight shift at Tesco," the British retailer, but he was dubious. One night he saw them entering a KTV Club wearing lots of makeup and "skirts much shorter than my boxers" and, tellingly, proceeding through the employee entrance. "So they are prostitutes," he concluded. "I feel a little uncomfortable."

But when he tallied his monthly expenses and considered his lack of special connections, or guanxi, in the city, either to help boost his paycheck or to find more comfortable but not more expensive housing, he figured he'd stick out the grim living situation. "I have come here to be a journalist -- it is my goal, and I do not want to go back now. But it seems like it's harder than it used to be."

When I asked how his colleagues and former classmates were getting along, he thought about it for a moment and then replied that some were basically in the same lot as him, "but many of my friends have parents in Beijing, and they can save money to live with them. If your family is already established here, it helps a lot." After a moment, he added: "And some of them have rich parents who have already bought them their own apartments -- and cars."

Despite China's astonishing economic growth, it has gotten harder for people like my friend to get by in the big city. His is not a particularly lucrative profession. Like many in Beijing, he cannot count on his annual pay to keep pace with China's official rates of inflation -- which many economists suspect are lowballed anyway. (The consumer-price-index inflation rate is considered so sensitive that the State Council approves it before it is released publicly.) Even so, every month this year consumer-price-index inflation has exceeded the official average monthly target of 4 percent. Last month state media hailed it as good news that it was, officially, just 4.2 percent.

Anyone in Beijing can point to examples of friends who see rents hiked 10 percent or more in one year. The prices at restaurants keep going up, even as portions are getting noticeably smaller. Throw in the loss of intangibles that money can't buy -- like air quality and food safety -- and you begin to understand the grumbling among some of Beijing's non-wealthy folks that their standard of living seems to be diminishing, even as the national GDP surges ahead at a heady 9 percent.

Could it possibly be true that a swath of people in China's big cities is downwardly mobile, if one compared wages with living expenses? I asked Patrick Chovanec, an associate professor at Tsinghua University's School of Economics and Management in Beijing. Alas, he told me, it's difficult to find much clarification in China's famously fudgeable official statistics. (For instance, the official unemployment rate only includes individuals with urban hukous, or permanent residency permits -- which excludes the most economically vulnerable.) Still, he noted: "If you perceive that you're losing buying power -- or have rising but unmet expectations -- that's when people get upset.… And this country, for a country growing at over 9 percent, is in a foul mood."

Indeed, there is a palpable sense of frustration in Beijing, especially compared with the last time I lived here in 2008. You can see it on the dour faces on the metro, hear it in raspy voices at dinner conversations, and especially sense it in the new gruffness of taxi drivers, who no longer think ferrying people around town for 10 yuan, about $1.60, is such a good deal for them (their base fare hasn't been raised). Still, it's hard to rage against abstractions. It's a lot easier to fume at obnoxious people.

No wonder, then, that in 2011 the Chinese media and Sina Weibo (China's version of Twitter) buzzed nearly every month with salacious reports of China's Paris Hilton-types -- the sons and daughters of the wealthy and political elite, dangling opulent accessories and impoverished judgment -- behaving badly in BMWs and Audis and typically expecting to get away with it, to boot.

The year began with the trial of Li Qiming, a university student in Hebei province who in October 2010 was drunk-driving and slammed into two other college students out skating, killing one of them. When he saw what had happened, he tried to speed away, but the campus guard stopped his vehicle. When questioned, the first thing he is widely reported to have blurted out was, "My father is Li Gang." Li Gang is the district's deputy police chief.

Then there was 15-year-old Li Tianyi, the son of a high-ranking army official, who had no license when he got behind the wheel of a BMW in September. While carousing the streets of Beijing, he grew frustrated when another car was blocking his path. He reportedly got out of the car and assaulted the other driver while either he or a friend shouted, "Who will dare call the police?" Behind his car's windshield was a temporary driving pass for the Great Hall of the People, China's parliament building.

And earlier this month, a student at Beijing Film Academy got into a fight over where he could park his Audi, the telltale car of choice of Chinese officials. After a brawl in the parking lot, a cleaner, a 43-year-old migrant worker from nearby Hebei province, was taken to a hospital, where he died.

Perhaps the closest female equivalent was the lightning-rod saga of Guo "Meimei," a petite 20-year-old with a heart-shaped face and big brown eyes who took to posting photos of herself driving her "little horse" (a white Maserati) and her "little bull" (an orange Lamborghini) on her Weibo microblog. On her account, she claimed to be a general manager at the Red Cross of China, one of the country's largest and most politically connected charities. Her luxury goods, not to mention horrible judgment, were widely taken by readers as signs of corruption at the charity. (In the months following the scandal, which reached its zenith in June, donations to the charity dropped off precipitously). Later, it came out that she held no such position and was rumored instead to be either a mistress or relative of someone at the Red Cross.

The anger in China at such dilettantes misbehaving runs deeper than, say, America's love-hate relationship with Lindsay Lohan. As Michael Anti, a popular Chinese blogger and political commentator, told me, "The rich are becoming a dynasty." Now people in China recognize that "you get your position not by degree or hard work, but by your daddy." Anti added that though corruption and guanxi are hardly new concepts in China, there was previously a greater belief in social mobility through merit. "Before, university was a channel to help you to ruling class. Now the ruling class just promote themselves."

There is a dark sense that something has changed. "It's not simply income equality that bothers people -- that's a misconception," Chovanec told me. "When Jack Ma makes a billion dollars for starting a successful company, that's OK.… It's inequality of privilege. It's how people make their money. There's now a whole class of people getting wealthy because of who they are, not what they do -- and they follow a different set of rules."

In today's China, the abilities to buy and sell real estate and to win government contracts are among the greatest drivers of wealth, and it's those who are already wealthy and well-connected who have access to these opportunities. If their children are lazy or dull, they can use their stature to create opportunities and positions for them, cutting short the trajectories of more able aspirants. Social status is becoming further entrenched because, as Chovanec notes, "Government is so pervasive in China's economy.… Government has great power in determining winners and losers, so who you are and who you know does more than anything else to determine success." And those at the top increasingly act above the law. "Privilege begets money, and money begets privilege."

This, of course, runs counter to the optimistic, popular fairy tale of China over the past 30 years, duly promoted by the ruling Communist Party, that a rising tide and roaring economy inevitably lifts all boats; that the future will be better, materially, than the past; that hard work will get you ahead; and that education is the great leveler. Call it the Chinese dream.

"Well, that used to be true, pretty much -- but not now," reflects Qiao Mu, a professor at Beijing Foreign Studies University. "Take myself. I was born in 1970 into a poor family in west China. There wasn't yet a large class of rich people in China, so the opportunities were more open. At that time, I could depend on my hard work and study to advance. I could change my position in society." But today, he says, sighing deeply, "It's much more difficult for these young guys, my students. You have to rely on your background, and those who already have connections and wealth help themselves and their children.… The condition is getting worse, not better."

Or, as my friend, the struggling reporter, put it: "People no longer believe you can win by working hard and honestly in China."

STR/AFP/Getty Images


All Quiet on the Southern Front

Does the average South Korean really care about the news of Kim Jong Il's death?

SEOUL – South Korean television and radio stations don't often simultaneously air live broadcast news from North Korea's official media. But as the nation sat down for lunch on Monday, they saw an unfamiliar face appear on their Samsung flat panel TVs. It was that of Ri Chun-hee, North Korea's star newsreader, dressed in a traditional, black funeral gown, seated and weeping in her trademark wavering voice. That's when most people here knew it was serious.

Despite being ill for some years now, Kim Jong Il's death came as a surprise. The South Korean government seemed to be caught off guard as well. President Lee Myung-bak called an emergency Cabinet meeting and the Unification Ministry set up a new commission to monitor all developments up North. The message to the public: Stay calm, the situation is under control, go about your normal lives.  And on the streets of the capital, most Koreans seemed to be doing just that, for now.

Despite the fear that a hostile nuclear-armed state without a clear leader in charge could instill in its neighbors, most South Koreans here really just don't seem to care about what happens in the North.

Choi Young Joo, a 29-year old piano instructor, was driving home when she heard on the radio the news of Kim's death.  

"I thought 'oh wow, he's dead,' not a big difference than before," she said. "I sent my friends a group chat message about it.  They just asked me 'what are we going to do for dinner?'"

Other Seoulites shrugged their shoulders or plainly said "I don't care" when asked how they feel now that Kim, one of the world's most brutal dictators, is history. Short of a missile barrage, many cosmopolitan citizens of this city of 10 million don't seem to think their lives are affected at all by what occurs above the 38th parallel.

"I was at the office when I read the news today.  I didn't think it was a big deal at first," said Yu Mi Hyun, 25.  "But after I talked to my friends in the military, I realized this was an important event and that we need to watch it closely."

The apathy toward North Korea among the country's youth is a big concern for the government, which is reaching out to teens and 20-somethings with ventures into social media and greater online visibility. In October, the Unification Ministry launched Facebook and Twitter accounts as well as an Internet television channel that features news, press briefings, and even a television drama all related to reunification issues.

"Pretty much nobody among the younger generation of Koreans is seriously interested in unification and North Korea," says Andrei Lankov, a North Korea analyst at Kookmin University in Seoul. "North Korea is increasingly seen as a distant country, an irrelevant place, a poor dictatorship whose population happens to speak the same language."

The death of Kim is just the type of event the South Korean government is trying to prepare the public for.  But trying to convince young Koreans that the six decades-old division of the peninsula is still relevant today is a challenge for the Unification Ministry.

"South Korean life is very competitive and young Koreans are busy with school or searching for jobs.  They don't have time to think about unification," says Lee Sung Shin of the Unification Ministry's public relations team. 

But that's a problem, says Shin, adding that when unification does happen, it will be sudden and unexpected.  Andrei Lankov agrees: "Unification will come and not as a result of negotiations between the two governments, but as a result of a revolution in North Korea.  The current generation will deal with the consequences of this change." 

And those consequences, Lankov says, including picking up the bill for reunification. In August, a state-run think tank estimated the cost of merging the two economies could run as high as $203 billion. But if young South Koreans seem unconcerned by the uncertainties that Kim Jong Il's death might mean for their bank accounts or social safety nets, another demographic can't wait for the regime to fall.  They are the 22,000 strong community of North Korean defectors.

Kim Hung-kwang of North Korean Intellectual Solidarity, a Seoul-based organization made up of former North Korean elites, says he's been getting calls all day from other refugees, asking if the news of Kim's demise is real. "It seems like it is hard to believe for them," he says. 

But Hung-kwang tells them not to get their hopes up yet that Kim regime is in its death throes. At this point, which course heir apparent Kim Jong Un -- the third youngest son of the late Kim -- will take the country is anyone's guess. "North Korea can go one of two ways," says Hung-kwang. "They will either engage with the international community, or they will become an even more dangerous, militarized regime."

Other North Korean defectors want to personally play a more active role in the overthrow of the Kim family. During rallies put on by the North Korean People's Liberation Front, a group made up of former soldiers of the North's million-man army, members wear camouflage and wield plastic rifles. They say the only way to end the regime in Pyongyang is to take out its leadership. During one demonstration in Seoul in September of last year, the activists showed how they'd do this by lining up a man wearing a Kim JongI Il mask in front of a firing squad. One member shouted fire and recording of gunshots rang out.  The man in the mask fell to the ground.

"Many South Koreans are suspicious of us," says Liberation Front member Park Dae-gook. "They think we betrayed our government before so maybe we might do that again. We're in a desperate situation, so that's why we want to go to the frontlines." North Korean defectors are not eligible to enlist in the South Korean military. The Liberation Front's offer to form a combat unit or participate in training exercises with South Korean forces has been rejected by Seoul's Ministry of Defense, which appears to not take the group so seriously.

But taking up arms against their old government is not how most politically active North Korean defectors feel they can best be utilized. Intellectual Solidarity runs covert operations to send DVDs, USB sticks, and other media filled with information about the outside world across the North Korean border.  Their goal is to spark an eventual uprising. And as Seoul chews on the death of Kim Jong Il, Kim Hung-kwang says it's a crucial moment.

"We need to reach out to North Koreans and counter the regime's official propaganda that paints Kim as a hero. They need to know what is true or not about him," he says. Hung-kwang adds that these efforts by defectors need to occur during the next 100 days, when North Korea holds an official period of mourning for the late Dear Leader.

"It seems like the day in which we will be able to return to our hometowns is coming quickly," Kim Hung-kwang says. "But if that day is to come soon, we have to increase our activities to ensure North Korea becomes a more free nation first."

Chung Sung-Jun/Getty Images