Page last updated at 01:08 GMT, Monday, 23 January 2012

China's appetite for work and wealth

Jeremy Paxman in China
Jeremy Paxman reports from China for the BBC's Newsnight programme
Watch at 22:30GMT on BBC Two on Mon 23, Tue 24 and afterwards on the BBC iPlayer

China's huge population and booming economy is turning into a new world power, but what is creating that success, how secure is it, and what does it mean for the UK and other Western economies, asks Newsnight's Jeremy Paxman.

There was a minor riot in Beijing last week. The Apple store was attacked.

Its offence? Not being willing to sell sufficient numbers of the iPhone 4S.

Buyers had queued all night and things turned ugly when it became clear that many of those in line had not the faintest idea what an iPhone was.

They belonged to teams hired by middlemen who knew that every handset bought was immediately resalable for an additional hundred pounds.

The teams of the tech-unsavvy were identifiable to each other by home-made armbands, and when the store realised what was happening it suspended sales. That was when the eggs started flying.

In London they riot to steal things. In Beijing, they riot because they cannot buy them.

China proclaims itself a secular country. But that is not what it looks like. For a first-time visitor to China, the most astonishing aspect of the country is the worship of wealth.

The whole economy floats on a sea of migrant workers willing to go anywhere for a day's pay

The mayor of London may like to be seen riding around on a bicycle. The mayor of Beijing - once the greatest concentration of cyclists in the world - wouldn't be seen dead on one.

Even China Daily, a sort of hymn-sheet to the Communist Party, reads like the FT much of the time.

Flaunting wealth

It reported last Monday (16 January) that there were more Rolls Royces bought in China last year than anywhere else on earth.

Audi now sells more of its brand here than in Germany. The company confidently expects to exceed its target of one million sales between 2011 and 2013, "as long as we can grow annually at 8 percent", as a senior executive asserted blithely. The target was set less than a year and a half ago.

Street scene at night
Chinese cities are matching Western rivals for conspicuous consumerism

It is all surface froth, of course. There will still be one billion, two hundred and ninety-nine million Chinese who do not buy an Audi. But it is the flaunting of wealth that is so shocking, because the whole economy floats on a sea of migrant workers willing to go anywhere for a day's pay.

You can hear them hammering on the construction sites and see them clambering across the half-built highway towers from dawn until long after dusk.

Victorian Britain was perhaps rather similar, and the smog of Charles Dickens' London finds its counterpart in the murk which envelopes Beijing on windless days and tears at your throat like sandpaper.

Work ethic

Beijing itself - once, apparently, a charming ancient city - has been torn down and replaced with a traffic-jammed assortment of functional concrete blocks interspersed with the occasional quite stunning pieces of modern architecture.

China is the great emerging force in the world, and the sense of apprehension everywhere else must be good

The old men of the politburo must look out on it all from the backs of their limousines and smile. Chairman Mao's Cultural Revolution sent intellectuals to live as peasants. Embracing capitalism has created a class of urban plutocrats.

China is the great emerging force in the world, and the sense of apprehension everywhere else must be good.

It is customary to attribute China's new wealth solely to its abundance of cheap labour. But it would have been impossible if the country's potential entrepreneurs had not possessed the sort of work ethic which drove the captains of Victorian industry.

People seriously want to get rich. It may not be especially attractive. But it is more than enough to see off soft, Western welfare states which have sold their future for the sake of cheaper televisions and trainers.

Computer animation work
China is moving into hi-tech industries such as animation

Dozy Western governments seem to believe that it does not matter much, because somehow their comfortable democracies will coast along on the fruits of intellectual invention.

These governments bask in the belief that we can outsource metal-bashing and shirt-stitching because the brains which devise the products nestle inside Western heads.

How much longer can this complacent illusion last? In the 1960s there was a common belief among the English middle class that things made in Japan were "Japanese junk". The Sony Walkman and infinitely more reliable televisions than any manufactured in the country that invented the damn things soon ended that complacency.

The main television station in Chengdu, capital of Sichuan province, has a spanking new news studio infinitely superior to any the BBC can boast.

Chinese airlines (many of which know a great deal more about service than their western counterparts) fly Airbus and Boeing, but soon, the country will be making its own passenger aircraft.

What reason is there to assume that banking or any of the creative industries are beyond their ability?

Predicting the future is a job for clairvoyants, not journalists. But I cannot see any easy way for the current imbalance of trade to be equalised. Rather the reverse.

Untouchable elite

There is, though, one worry the so-called communists in the Chinese government might want to trouble themselves with.

The overseas bank accounts of the mega-rich are an open secret. Stories of corruption... are legion

One night, while eating in a smart Beijing restaurant I teased my host by asking whether the other diners were party officials. His instant - and serious - reply caught me out.

"Oh no," he said, "they always eat in the private rooms at places like this."

All the best restaurants have these private rooms, so the rich and powerful do not have their meal spoiled by the offensive sight of their fellow citizens.

Many of these private rooms serve delicacies the Chinese people can only dream of. Come to think of it, they probably do dream of them. I'm talking abalone, sea slug and puffer fish.

I certainly don't know enough about China to assert that this sort of behaviour cannot last. But I do know that it would not be tolerated in western Europe. Revolutions have been sparked by less.

The vast majority of the Chinese people do not yet seem even to have their noses pressed to the window-panes. They are too busy hoping to get rich, or just trying to make ends meet.

But the one-child policy is openly flouted by the rich, who simply pay the fine or arrange for the birth to take place in Hong Kong. If a poor person's child falls ill and the parents cannot afford health insurance, they will not get hospital care.

The overseas bank accounts of the mega-rich are an open secret. Stories of corruption, even of car accidents in which young people run someone over and expect to get away with it because their parents are senior in the party, are legion.

Having said which, everyone we met was charming, friendly and helpful. Not a single young person talked, even in their cups, of revolution

Right now, there are too many people doing too well for such thoughts. But it does not take a clairvoyant to ask how long it can last.

Watch Jeremy Paxman's reports from China on Newsnight at 10.30pm on BBC Two starting Monday 23 January 2012.

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