The first time I was in China, they had only just begun a transition to a market economy. My view back then was that they had just spent 40 years being told by the government all the bad an evil things about capitalism. Then only a few years before, they had been told… “well now you are a capitalists“. Chaos ensued as the people tried to behave in all the bad ways mentioned by the communists. There were only pockets of good behaviour and the country was very very poor.
For example: we used to catch the local buses. At the time there were many private mini bus operators as the government run buses were in such a bad state. I think I only saw one new bus in the 30 days I was there, and ironically, this was in Gui Yang where we were stuck the night because the aeroplane could not land in Gui Lin due to fog. The buses, all of them, government and private would lie about their destinations to get you onto the bus. It was an extreme exercise in frustration.
This time in China I traveled on the buses again. I only used the government run buses. There seemed to be intercity private buses, but the intra-city private buses seem to have completely disappeared. All the buses have improved by orders of magnitude. Gone are the attempts to over charge and gone are the lies about destinations. All buses now clearly mark where they are going and there is a clearly marked fee and ticketing system. (well it is better in some places than others.) However, there still appears to be a lower priced market for tickets, but I will talk about how this works later.
In most places in China, there now seem to be two economies and in some places three. First there is the old Chinese economy. Second there is an intermediate level, based on the technology of the last two decades and finally there is a very modern economy. These economies exist side by side, by market segmentation, that is in some cases enforced by government control, and also by physical separation. Some places are much more developed than others, sometimes even in the same city. This separation is also caused simply by the rapid rate of change, and the inability of the economic system to change so quickly as to change all parts of the economy in one short period of time.
The old economy is based on manual labour. Everything is done by hand, though occasionally some additional assistance is gained, by using animals such as horses and donkeys. It is very inefficient and, though people say the Chinese economy is running well, it won’t really be until this part of the economy ceases to exist.
The middle economy is based on the the early implementation of the industrial revolution in China. This revolution was really driven by the communist central government. Everyone has the same bicycles, they had the three wheeled trucks and cars. You still see them everywhere. What I found a little surprising is that in some cities there are brand new, modern designed, three wheeled taxies. This is the land of small capitalism. Most people run their own business, say carting goods on their three wheel truck. There are not many medium and small businesses outside the traditional ones like brick making.
Finally China is implementing a modern economy. Technologically they are up there but in other areas they lag. One man I spoke to bemoaned the inability of the Chinese to forward plan and use modern management styles. So you now see modern semi-trailers, shops that look like any shop in the west with prices at the same level as in the west. Only there are more staff as labour in China is cheap.
Price is one of the things that differentiate between the different economies. It also makes it a bit hard to a traveler such as myself. An example that effected me in every day life is the cost of food. In the old economy you can get a meal from 2 yuan to 5 yuan. I was in some places where a bun would only cost 5 fen. These are the list prices. There is a secondary market, for locals, where the prices seem to be lower. In Shang Hai we were at a place that listed the price of a bao dz as 1 yuan. I know some westerns, who could not read Chinese were paying 2. But the locals in front of me in the line were getting three for 1 yuan. Moving into the next economy the price now becomes 10 to 30 yuan for a meal. The food is somewhat better as the quantity and quality have improved. Finally there is a rare but small world of modern eating places. Prices start at say 15 yuan in a place like KFC and go from 20 to 100 yuan in restaurants.
I suppose as time goes by, these older economies are being replaced by the new one. But one thing that slows down the rate of change is the life span of the infrastructure and equipment. So traveling on the roads one will see horses and carts (now very rare in most places) along side bicycles, including the three wheeled variety, three wheeled trucks and their heavy counterparts and finally modern buses, card and semi-trai
lers. I will write another time about the chaos this causes on the roads.