The Day That Nothing Happened

The Wal-Mart in the basement of my building sells live frogs in a big aquarium, for eating. I don't know what surprised me more when I moved here - the frogs, or the Wal-Mart. Our favorite intergalactic retailer doesn't mess around when it comes to creating 'capitalism with Chinese characteristics', as a group of Kentucky tourists hunting fruitlessly for American cheese in the dairy aisle found to their chagrin the other day. The company knows its market; in addition to the frogs there are live turtles (plastic bar code tags threaded through little holes in their shells), a special hot Peking duck stand, endless noodles and only a small selection of beer and spirits, though you are welcome to down a big shot of Chivas regal from the sampling booth as you shop. Chinese Wal-Mart has a lot to recommend it.

This being China, any employee handling food inevitably wears a gauze mask and sanitary outfit that gives the deli counter the feel of a level-3 containment facility. Other employees are busy out on the floor, hawking bargains or manning the ubiquitous tasting stands in every aisle.

Almost everyone who works at the Beijing Wal-Mart falls in the same demographic - women just barely past university age. The 'associates' are required to have a name tag with an English name in addition to their Chinese one, and they pick them from the same mysterious, outdated source of American names that has been serving the Taiwanese and Singaporeans for decades - Mildred, Ethel, Rufus, Crystal, Sea, Sky, Gladys, Happy, Janice, Lydia. I was heartbroken the other week to have my bottled tea scanned by a woman whose name tag read simply "Lonely".

People like to say that if Wal-Mart were a country, it would be China's eighth-largest trading partner, spending $18 billion on Chinese goods in 2004 and probably in the neighborhood of $30 billion this year. This hypothetical is meant to illustrate the staggering volume of Wal-Mart's Chinese operations, but I always get hung up on the idea of a what a sovereign Wal-Mart nation would look like in practice. It would be a fascinating and creepy place to live - a kind of capitalist North Korea with Bentonville as its Pyongyang, building-size portraits of Sam Walton, obligatory morning song for all citizen-associates, no offensive books allowed, border checkpoints manned by old people and a perimiter fence electrified at night to prevent the suspiciously high numbers of illegal immigrants from smuggling anything out. Its main import - American shoppers; its leading export - happiness.

As the excellent Frontline special on the company explains, the opening of free trade with China had approximately the same effect on Wal-Mart's retail business as the parallel introduction of steroids did on American baseball. The retailer swelled to enormous size by creating an extremely efficient means of swapping Chinese goods for American dollars. American shoppers had an insatiable appetite for cheap imports, and Chinese suppliers were able to draw on an inexhaustible reserve of young people willing to work very hard for very little money to supply them. Wal-Mart became the conduit between these two great reservoirs of cheap labor and disposable income, operating with low margins but at such colossal volume - a quarter of a trillion dollars in sales worldwide - that it became the largest company in the world.

The effects of the rise of Wal-Mart on the American economy have been well-documented. Still, what on earth is one doing downstairs from me in Beijing? How can Chinese people afford to shop at Wal-Mart (the place is packed!) when they are the ones being paid the low wages that allow the company to charge those everyday low prices to begin with?

The answer is that there are two Chinas - a small urban China that is getting richer, and an enormous rural one that remains desperately poor. Imagine cities in the United States surrounded by rural Mexico and you have the dynamic. The fifty-seven Wal-Marts here - with many more to come - are selling to that affluent urban China. The massive amounts of money flooding in from the West has created a prosperous urban elite within the country; having saturated their original markets, Wal-Mart (and its international competitors like Carrefour) now want to grow more by selling to the newly rich classes their spending helped create. The engine for it all remains the same - the second, impoverished China, source of the innumerable migrant workers whose labor the whole system depends on.

What makes the situation exceptionally weird is that this is happening in a country that still professes to be Marxist. And the new Chinese capitalism feels like it was introduced by people whose understanding of it came solely from reading Marx: it is ruthless, exploitative, and contains the seeds of its own destruction. The only hitch is that the inevitable finale - proletarian revolution - is supposed to have already happened. In theory, in Communist China, the working class exploits itself.

Out of pure curiosity I took the subway down to Tiananmen square today. I knew better than to expect any overt acknowledgement of the anniversary, but I was curious to see if there would be any hint at all that something significant had happened here. It was another one of those wet sponge dust storm days that Beijing seems to specialize in, the stifling humidity somehow leaving the fine sand in the air untouched. Despite the heat, people were out in droves around the Forbidden City, strolling or sitting in the shade, enjoying their day off.

Tiananmen square is immense, so on a day like this various buildings swim in and out of sight as you walk thorugh the thick air. The police presence is heavy but intelligently managed so you don't quite notice the number of people with their eyes on you. Plainclothesmen, I'm told, move around as a quick reaction force in case anyone should try to make a gesture, but far more noticeable than any police or soldiers are the throngs of kite salesmen, snack vendors, and people trying to sell you Mao watches for a dollar. The Maosoleum itself is closed, and a number of monuments on the square have been discreetly roped off, but there is no other acknowledgement that the day is out of the ordinary. The square is filled with tourists, Chinese and foreign, walking alone or in big groups behind a flagbearer.

The way the government watches this square mirrors the way it watches the country. Surveillance is discreet but systematic; you are free to think and say what you like in private, but any public gestures are swiftly punished. There's no need for an overt show of force. In part because of what happened here, everyone knows the consequences of crossing the line.

The deal cut after Tiananmen was shrewd: urban Chinese were offered a path to prosperity in return for staying out of politics. The results are now visible in every Chinese city, most noticeably in those (like Shenzhen and the east of Shanghai) that have sprung up out of nothing in the past twenty years. They are a direct rebuttal to the Reaganite belief that free enterprise opens the way for democracy. So far China has proven that if you can grow fast enough, democracy can wait.

During the Cold War, for-profit corporations seemed to be the natural enemies of Communism. What was a virtue called 'enterpreneurship' in the West was a crime called 'speculation' in the Eastern bloc. But since the Chinese Communist party shed its aversion to business and opened its markets, western companies have found that their interests and those of the People's Republic are wonderfully aligned. Both want to create a large Chinese middle class, both want to sell as many Chinese goods as they can to the developed world, and both are interested in maintaining a docile, stable workforce, with none of the hooliganism that marred China's international image so badly seventeen years ago in Beijing.

China's bravura reinterpretation of socialism has been so successful that it has caught the eye of other regimes looking for a way to transition out of economic failure without relinquishing power. Even North Korea is joining the fun, advertising the lowest labor rates in Asia ($30/month!) and what is without question the continent's most obedient workforce.

So Wal-Mart shoppers can rejoice - the everyday low prices are here to stay. When the Chinese hinterlands finally get too expensive, there will always be India, North Korea, and even that very retro favorite, Africa, to step in with the human capital. Economically, we can probably keep the cheap goods flowing for a very long time. Morally, it might not be such a great idea.

The Chinese government has recently begun to worry about the disparities of income among its population, since this threatens stability, and has announced measures to try and address the growing levels of social inequality. Wal-Mart, for that matter, has felt the sting of bad publicity, and is taking care now to put some distance between itself and the more ruthless elements in its supply chain. But something has gone wrong if the Chinese government and Wal-Mart are in the vanguard of the struggle for workers' rights.

What the migrant workers in China really need is a political voice, a way of getting their own government to give them the basic guarantees of existence that workers in the western democracies fought so hard for at the start of the twentieth century. But that goes against the deal offered after Tiananmen. As long as the boom continues, there will be no political change, and so the workers' own labor is being used against them. They have become the agents of their own oppression in a way that Marx would have appreciated. And in a nice twist, their labor is also helping dismantle the working class in the advanced capitalist states that purchase all of their copious output. China has updated Khrushchev's old slogan: "We will bury you - in bargains!"

A big hero of mine, the Polish dissident Jacek Kuroń, wrote in his history of the Polish People's republic that the one time he came near losing hope in eventual democratic change was during the 1970's, when the Party leadership borrowed billions of dollars from Western banks in order to provide the population with consumer goods. For a few years coinciding with my childhood, before the loans ran out, people could buy kitchen appliances, a dinky little kind of car, furniture, shoes, and all kinds of other minor luxuries in a counterfeit version of the kind of real consumer boom urban China is enjoying today. This modest injection of wealth was enough to completely depoliticize all but the most fringe activists for several years, until the loans ran out and the government had to raise the price of meat. That was the birth of Solidarity. What brought down the Berlin Wall, indirectly, was a nation of people hungry for sausage.

China is now trying a much bigger version of this experiment, on a firmer economic basis, in the hopes that it can be prolonged indefinitely. And if rising prosperity can mollify people living in a police state like China, what chance are niggling questions of principle going to have in the prosperous West? Those are awfully low prices, after all. The fact that the Chinese authorities took a number of people into preventive custody in advance of the June 4th anniversary is n sign that the memory of the Tiananmen democracy rallies hasn't been completely erased. But the Wal-Mart downstairs speaks volumes about our own reaction to that day.

On the east side of Tiananmen Square is a giant countdown clock showing the days and hours until the start of the 2008 olympics. I would not know how to exaggerate the level of preparation taking place in Beijing for this. Everything from new subway line construction to mass English lessons to an aggressive (and very temporary) clean air campaign is under way to make sure the sporting event shows the city off in the best possible light. This is China's big coming out party as a world power, the moment when the awkward memory of 1989 is supposed to definitvely give way to a "New China", open for business and looking to the future. The entire Western media will be here to document it. I'm sure it will be a glorious celebration.