The Myth of Chinese Capitalism: The Worker, the Factory, and the Future of the World, by Dexter Roberts
In this thought-provoking new book, experienced BusinessWeek journalist Dexter Roberts predicts a dystopian future for China: an “ever more anemic economy,” stagnation, worsening inequality, frequent worker strikes, and serious protests by disgruntled migrants who have lost hope of achieving a good life. Far from being unstoppable, the China he sees is likely to fall into the middle-income trap, where it gets stuck and can’t rise to the level of advanced economies. He posits that its huge population, rather than being a source of dynamism and entrepreneurism, will drag it down and threaten its stability.
Roberts developed a deep understanding of this complex country during two decades covering the Chinese economy. Unlike most business reporters, he focused specifically on those who were left behind as others got rich. Again and again he returned to a small village in Guizhou, one of China’s poorest provinces, and Dongguan, a thriving industrial district whose factories sucked up labor from the countryside. He forged deep ties with one extended family whose young people left to work in the cities, where they were treated as second-class citizens, limited to low-wage work in factories, construction, and delivery. Thus he brings to life the unseen half of China’s population—the hundreds of millions of poor farmers who struggle in the countryside and the migrant workers whose rise to prosperity is blocked by an unfair system of household registration. Their personal stories vividly illustrate a side of China invisible to most foreign visitors.
Ironically, the prevailing American view of China is that it is a threatening juggernaut, on track to overtake the United States in technology, power, and economic might. What Roberts’ book shows is the fallacy of that vision. China has a per capita income of only $10,000, one-sixth that of the U.S., and its goal of becoming a high-income country remains in doubt. Many international experts predict that China risks falling into the “middle-income trap,” where growth stagnates before it can lift its huge population into the coveted ranks of “high-income” countries. Highly aware of that danger, Beijing is investing in human capital, upgrading exports, encouraging domestic consumption, and increasing productivity by investing in robots and technology education. “Made in China 2025,” the government’s plan so feared by Trumpists, is geared not toward displacing the United States but toward maintaining enough growth to continue raising living standards at home. No American leaders seem capable of creating such a plan for our country, to ensure we maintain our competitive edge.
As US-China relations sink into animosity, this book highlights the huge disparity between how China perceives itself and how Americans perceive it. China is striving against the odds, yet we Americans keep assuming it’s about to displace us.