China's capitalist capital


By Louisa Lim
BBC, Wenzhou

A father and son thresh wheat by hand, painstakingly working along their tiny patch of land. "Life is hard," grunted the father. It is an age-old scene, but the landscape behind the threshers has been transformed out of all recognition.

China's economic background is changing

Once where there were just fields, now rows of small makeshift factories disappear into the horizon. It is physical proof that many former farmers have found new ways of earning a living.

Some have built their own business empires in a single generation, especially in the coastal city of Wenzhou, whose people are famed for their capitalist ways.

One is Chen Jiashu, a small unassuming man who seems almost dwarfed by his large office furniture.

He has become famous as the Badge King of China. Taking visitors on a tour of his factory, he points out the workers hunched over machines pressing out metal badges, and this is how Mr Chen is literally stamping his mark on the world.


After a week, we had orders worth $1,000 and we were terrified. We couldn't believe how easy it was to make money
Chen Jiashu, badge maker

The badges filed and buffed here are worn by United Nations peacekeepers and the New York City Police Department. Mr Chen's customers are as far afield as the UK, Saudi Arabia and Argentina.

It is a client base that was unthinkable to Mr Chen when he started the business with a few friends in 1979.

"On our first trip to find new customers, we didn't understand the first thing about doing business. We took $9 each with us on that first trip, and we walked from one school to another to get new orders.

"After a week, we had orders worth $1,000 and we were terrified. We couldn't believe how easy it was to make money. We were scared we could earn that much money," he said.

Then, China was emerging from the era of Mao Zedong, decades when doing business meant being labelled a "capitalist running dog".

Suddenly there was a political U-turn and it was acceptable to make money.

In Wenzhou, where land is scarce, the entrepreneurial culture has a long history. Even during the Cultural Revolution, Chairman Mao's wife Jiang Qing hit out at Wenzhou, saying, "If you want to see capitalism, go to Wenzhou."

Now Wenzhou has won accolades as the most capitalistic city in China, where 99%of the enterprises are privately owned. It is a place where rags to riches stories are all too common.

Chen Jiashu says that is because people like him - former farmers - know how to survive hardship.

"From a very young age, we've all suffered. As children, we had to work in the fields. That's really hard, labouring away in bare feet in the summer. Surviving hardship is the most important thing in running your own business. If you can't do that, you can't build a big business," he said.

If Chen Jiashu represents the first generation of Chinese entrepreneurs, Xu Yunxu is the new face of the Middle Kingdom.

Xu Yunxu has been running her own company since she was 20

With her streaked hair, high heels and snappy striped suit, the 30-year old runs her business empire from a semi-circular desk above the streets of Wenzhou.

Eight-hundred people now snip and sew for Mrs Xu's clothing company, which she started 10 years ago with just over $500.

But her father was also a farmer, and as a child one of her jobs was fetching water from the well every day. She believes the economic boom has given her chances no Chinese women have ever enjoyed.

"We female entrepreneurs are a product of our time. In the past, there's never been such a thing as female entrepreneurs in China, so my generation is lucky. There was a lot of wasted talent in the generation that came before us - people like my mother - who couldn't achieve anything because of society's limitations," she said.

A slick video advertises her latest collection. In today's cut-throat marketplace, fierce competition at home means only the strongest firms survive.

But Xu Yunxu is undeterred - she is turning her gaze to the international market, where she already has a presence in 18 countries.

China's peasant entrepreneurs are taking on the world, and the world better watch out.
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Thoughts?

good article. it's nothing that is contrary to basic economics. this is the reason that outsourcing is good. this is the reason free trade is good. where once pestilence reigned, burgeoning foreign entrepreneurs are helping to raise the standards of living for all. and it's because the government stepped back, reduced their regulatory inclinations, and let the people take control of their economic destinies.

i would recommend a book called "The Mystery of Capital: Why Capitalism Flourishes in the West and Fails Everywhere Else" by Hernando de Soto. he's a peruvian economist who has secured a god-like following to the poor and disenfranchised in south america. it's a first-hand look at why many third world countries are unable to experience the economic boom that america underwent in the early part of her history, and the boom that china is now experiencing. his conclusion: a lack of property rights, coupled with corrupt gov't run regimes dooms financial endeavors before they ever have a chance to succeed.

Good post! I can definately see that final statement