China: Limits to growth

The chinese city of Shenzen as an example of the limits to growth

The New York Times
December 19, 2006
Chinese Success Story Chokes on Its Own Growth
By HOWARD W. FRENCH

SHENZHEN, China — When Zhang Feifei lost her job in this booming Chinese factory town, she was not terribly concerned. Jobs had always been plentiful in Shenzhen’s flourishing economy.

Then Ms. Zhang, a 20-year-old migrant laborer, lost her identity card and was shocked to find that no factory would hire her without a bribe that she could not afford. Desperate for money, she ended up working in a grimy two-room massage parlor in a congested alley here, where she has sex with four or five men each day.

“I was terrified at first, and I was really embarrassed not even knowing how to use a condom,” said the soft-spoken young woman, casting her eyes downward as she spoke. “I didn’t have any choice, though. Little by little, you have to get used to it.”

Few cities anywhere have created wealth faster than Shenzhen, but the costs of its phenomenal success stare out from every corner: environmental destruction, soaring crime rates and the disillusionment and degradation of its vast force of migrant workers, Ms. Zhang among them.

Shenzhen was a sleepy fishing village in the Pearl River delta, next to Hong Kong, when it was decreed a special economic zone in 1980 by the paramount leader Deng Xiaoping. Since then, the city has grown at an annual rate of 28 percent, though it slowed to 15 percent in 2005.

Shenzhen owed its success to a simple formula of cheap land, eager, compliant labor and lax environmental rules that attracted legions of foreign investors who built export-based manufacturing industries. With 7 million migrant workers in an overall population of about 12 million — compared with Shanghai’s 2 to 3 million migrants out of a population of 18 million — Shenzhen became the literal and symbolic heart of the Chinese economic miracle.

Now, to other cities in China, Shenzhen has begun to look less like a model than an ominous warning of the limitations of a growth-above-all approach.

While grueling labor conditions exist in many parts of China, Shenzhen’s gigantic plants, employing as many as 200,000 workers each, have established a particular reputation for harshness among workers and labor advocates. Monthly turnover rates of 10 percent or more are not uncommon, labor groups say.

The tough working conditions, in turn, have helped spawn one of the most important labor developments in China in recent years: large-scale wildcat strikes and smaller job actions for better hours and wages. The Guangdong Union Association, a government-affiliated group, said there were more than 10,000 strikes in the province last year.

Among Chinese economic planners, Shenzhen’s recipe is increasingly seen as all but irrelevant: too harsh, too wasteful, too polluted, too dependent on the churning, ceaseless turnover of migrant labor.

“This path is now a dead end,” said Zhao Xiao, an economist and former adviser to the Chinese State Council, or cabinet. After cataloging the city’s problems, he said, “Governments can’t count on the beauty of investment covering up 100 other kinds of ugliness.”

As the limits of the Shenzhen model have grown more and more apparent, other cities in China’s relatively developed east are increasingly trying to differentiate themselves, emphasizing better working and living conditions for factory workers or paying more attention to the environment.

“Some inland cities have started to provide migrants social security, including pension and other insurance,” said Wang Chunguang, an expert in class mobility at the Chinese Academy of Social Sciences in Beijing. “In Chengdu, in Sichuan Province, residency controls are loosening up and education for migrant children is getting more attention.”

Migrants do still arrive here, of course, drawn by the promise of work and undaunted by stories of the difficult life that awaits them. Some, like Ms. Zhang, who come here for the $100-a-month sweatshop salaries, end up trapped, literally too poor to leave. But many others quickly become disillusioned and return home.

Increasingly short of workers, factories recently have increased assembly-line wages by as much as 20 percent. But even so, critics say, Shenzhen’s boom has spread little wealth.

While the city is dependent on migrant labor to keep its factories running, onerous residency rules discourage migrants from settling here permanently and make it difficult for them to obtain public services from education to health care.

“The government has evaded its responsibilities toward migrant workers,” Jin Cheng, a member of an influential local civic forum, Interhoo, said bluntly.

The resulting rootlessness has fed a wave of crime of a sort hardly ever seen elsewhere in China. Gunfights, kidnappings and gang warfare are rife, and crime rates are skyrocketing.

Although the city does not publish crime data, the Southern Metropolitan News, one of the most reputable Chinese newspapers, reported that there were 18,000 robberies in 2004 in Baoan, one of six districts in Shenzhen. By comparison, in Shanghai, a city of around 18 million, there were only 2,182 reported robberies for all of 2004, according to figures compiled by the city.

Near the gates of Foxconn, a huge electronics assembly plant that is one of the city of Shenzhen’s largest employers, a half-dozen former factory workers lounged in the shade on a recent afternoon.

Asked if it was their day off, one of them, a 20-year-old, explained that he had been fired when he developed lesions on his arms from exposure to paints and asked to switch jobs. Now, he said, he and his friends survived by “beating people up for a living.”

In addition to shakedown crews like this one, prostitution, usually thinly disguised in karaoke joints and massage parlors, but increasingly in the open, ranks as one of the city’s biggest industries. In Shenzhen’s blue-collar neighborhoods, thick with fetid workers’ dormitories, the frustration with hard labor, merciless factory bosses, low pay and miserable living conditions is palpable.

“I’ve changed jobs many times,” said one man, a onetime factory floor manager, who was lying on a bunk bed in a stiflingly hot room jammed with other workers. “The pressure is very high in these jobs. They don’t give you weekends, or breaks — especially the Taiwanese companies.”

Migrant workers describe the city’s labor market as a predatory environment filled with unscrupulous job brokers, fraudulent training courses and a multitude of other scams aimed at cheating the most disadvantaged part of the population.

Yu Di, a 19-year-old from Hubei Province with a junior high school education, said he worked in a grimy watch-casing factory, loading and unloading heavy boxes from a truck 11 hours a day, six days a week. With a salary of about $80 a month — and no benefits — Mr. Yu has to borrow money from his parents just to cover his living expenses. He lives in a dim and filthy dorm room, crammed with 12 bunk beds and mattresses made of bare springs covered with cardboard. “The only thing I regret is not working hard in school,” he said.

In the room next door, Zhou Hailin, 20, who grew up in Guang’an, the hometown of Deng Xiaoping, seems better off. Mr. Zhou, who came to the city four years ago, earns about $120 a month as a machinist in the same watch factory.

To do so, though, he must work eight-hour shifts, plus three or four hours of mandatory overtime, six days a week. A typical workday, he said, ends at 10:30 p.m., when he often goes to visit a sister who works in another factory nearby.

Asked if he ever visited downtown Shenzhen, which bristles with skyscrapers and shopping malls, he said he had never had time. “I have to work every day,” Mr. Zhou said. “All the factory jobs here are the same. That’s what it’s like being a migrant laborer.”

Mr. Zhou calmly accepts his lot, but for many the merciless grind of factory life is too much. Their health failing, or their dreams of amassing sizable savings broken, these workers opt to return home to simpler lives in the countryside.

“Shenzhen may seem prosperous,” a worker said, sitting in his bunk in a steamy dormitory, “but it’s a desperate place.”

Copyright 2006 The New York Times Company