Paul Lau, a Hong Kong-based photographer, accompanied me.
"Corruption," he said, shaking his head in exasperation like a farmer who's just discovered a cutworm infestation in his field.
Corruption in China is no secret, but the way it's covered in
Western media suggests that it's just an epiphenomenon attached to the government. In fact, corruption is the government. It's like jungle vines that have twined around a tree and strangled it - now the tree has rotted out and only the vines remain. Much of this stems from the way China is modernizing its economy.
If you thought zaibatsus were creepy, if Singapore's brand of state-backed capitalism gives you the willies, wait until you see the Sino-foreign joint venture. The Russians, in their efforts to turn capitalist, have at least tried to break up some of the big state monopolies and privatize their enterprises - but since
China is still Communist, there's no reason for any of that nonsense. Instead, foreign companies form joint ventures with enterprises that are still part of the government - and, of course, everything is part of the government.
On every block you see an entrepreneur sitting at a sidewalk card table with one or two telephones, jury-rigged by wires strung down an alley, up the side of a building, and into a window. There is a phone book, a price chart, and a cigar box full of cash (in Shenzhen, always Hong Kong dollars). Some fastidious operators have a jar full of mysterious disinfectant with which they wipe down the mouthpiece and even the buttons after each customer is finished. Most of these enterprises also feature a queue of anywhere from one to half a dozen people. The proprietor will step in and cut long-winded customers off, especially if someone in the queue makes it worth his while.
All of the phone wiring is kludgey. It looks like everyone went down to Radio Shack and bought reels of phone wire and began stringing it around, across roofs, in windows, over alleyways.
Hundreds of wires explode from junction boxes on the sides of apartments, exposed to the elements.
I was checking out some electronics shops along one of
Shenzhen's wide avenues. Above the shops were dimly lit office spaces housing small software companies or (more likely)
software departments of Sino-foreign joint ventures. If there was a Chinese silicon valley, this was it. I wandered into analley - the Silicon Alley, perhaps - and discovered a particularly gnarly looking cobweb of phone wires. Paul Lau started taking pictures of it. Within moments, a couple of attentive young
Chinese men had charged up on bicycles and confronted him.
"Are you a reporter?" they demanded.
"No, I'm an artist," Paul said, leaving them too stunned to make trouble. The lesson I learned from this is that a sophisticated
Hong Kong Chinese knows how to use the sheer force of culture shock to keep his mainland cousins at bay. The Shenzhenese are pretty worldly by Chinese standards, but compared to the
Hong Kong Chinese, who may be the most cosmopolitan people on earth, they are still yokels. This cultural disparity is about the only thing Hong Kong has going for it as 1997 approaches; but more about that later.
Everyone has a pager. Expensive models have LCD screens that can display Hanzi characters. Cheap ones display a few digits.
If you have one of these, you carry a tiny chart listing a couple of hundred of the most common Chinese surnames, each one with a numerical code. When you're paged, you read the number off the screen and refer to the chart to find the name of the caller.
If you own stock on the Shenzhen exchange, you can cut a deal with your pager company that will cause the price of that stock to appear on your pager twice a day, at 10:00 and 4:00.
And the pager doubles as an alarm clock; your company will give you a wake-up page every morning if you request it.
Even people who carry cellphones carry pagers, which confused me until I found out that most of the cellphones I was seeing aren't really cellphones at all; they are CT2 phones, which are cheaper and operate over a much shorter range. On a CT2, you can call out but you can't receive calls, so you have to carry a pager. To cover a metropolis with CT2, tens of thousands of base stations would be needed. Coverage in Shenzhen is still spotty. When you see half a dozen young men loitering on the front steps of a building shouting into their prawns, you know there must be a CT2 station inside.
Roughly speaking, Shenzhen is the southern anchor of acrescent of development running along the vast semicircular region that bulges into the South China Sea. At the northern end of the crescent lies Shanghai, the largest city in China, and, until the Communist takeover, the only Chinese city that could compete in wealth and sophistication with Hong Kong.
Motorola runs one of the two cellphone networks in Shanghai.
The local chief is a young American named Bill Newton, who came here a few years ago with two other people and worked around the clock at first - like new immigrants, he says, who've just come to America and have nothing to do but work. Now he's managing 55 employees; he's the only American. He thinks everyone should want his job: "To be in one of the fastest growing companies in one of the fastest growing sectors of the fastest growing economy in the world - how many times in your life is that going to happen?" In the context of Shanghai, "fast growing" means, for example, that cellular phone service is growing at 140 percent a year and pager use at 170 percent a year.
Motorola's offices are in the international center west of downtown Shanghai - the modern, high-rise equivalent of the
Western enclaves where capitalists used to do business in the old days. It's got a Shangri-La luxury hotel, it's got modern offices identical to those you'd see in any big American city, it's got living quarters with purified water. Newton and I got in a taxi and took a long drive to the headquarters of the Shanghai
Post and Telecommunications Administration (PTA) - Mao Bell, if you will.
Driving in Shanghai is like shouldering your way through the crowd at an overbooked trade convention. There's never any space in front of your vehicle that is large enough to let you in, so you just ooze along with the traffic, occasionally claiming a few extra square yards of pavement when the chance presents itself. I'm hardly the first Westerner to point this out, but the density of bicycle and foot traffic is amazing. I'm tempted to write that the streets are choked with bicycles, but, of course, the opposite is true: All those bicycles are moving, and they're all carrying stuff. If the same stuff was being moved on trucks, the way it is in, say, Manhattan, then the streets would be choked.
Everyone is carrying something of economic value. Eviscerated pigs slung belly-up over the rear tire; bouquets of scrawny, plucked chickens dangling from racks where they get bathed in splashed-up puddle water; car parts, mattresses, messages.
In network jargon, the Chinese are distributed. Instead of having One Big Enterprise, the way the Soviets did, or the way we do with our Wal-Marts, the Chinese have millions of little enterprises. Instead of moving stuff around in large hunks on trucks and trains, they move it around in tiny little hunks on bicycles. The former approach works great in say, the
Midwestern US, where you've got thousands of miles of nearly empty interstate highways and railroad lines and huge chunks of rolling stock to carry stuff around. The latter approach works in a place like Shanghai.
The same problems of distribution arise in computer networks.
As networks get bigger and as the machines that make them up become more equal, the whole approach to moving information around changes from centralized to distributed. The packet-switching system that makes things like Internet work would be immediately familiar to the Chinese. Instead of requisitioning a hunk of optical fiber between Point A and Point
B and slamming the data down it in one big shipment, the packet data network breaks the data down into tiny pieces and sends them out separately, just as a Chinese enterprise might break a large shipment down into small pieces and send each one out on a separate bicycle, knowing that each one might take a different route but that they'd all get there eventually.
Mao Bell is responsible, among other things, for setting up such data networks in China. The Shanghai headquarters is on the waterfront of the Huangpu river between the Shanghai stock exchange and a tall hotel used during the war by the Japanese as a high-rise concentration camp. A woman sits in the tiny lobby with her telephone and her jug of disinfectant, and allows you to call upstairs to announce yourself. A tiny, rickety elevator descends, hoists you up a few floors, and deposits you in a long corridor without artificial light. Some illumination enters through windows and glances down the shiny floor, but it's the gloomy steel-gray light of a northern industrial city. You'd never know that Mao Bell takes in over US$7 billion a year and that revenues are growing by something like 60 percent a year.
A bit of a spelunking expedition through these corridors takes you into a classic communist-style meeting room, the kind of place Coleridge might have been thinking of when he wrote of
"caverns measureless to man." In this part of the world, the heavy hitters show up for meetings with large retinues of underlings, and all of them have to have a seat at the table, so the tables go on for miles. I established a foothold in a corner near the door and was met by Gao Kun, director of the import office of the Shanghai PTA, comfortable in a short-sleeved shirt. Gao, bless him, was the only government official who would talk to me the whole trip - the PRC was still pissed off at the Great Hegemon (as they now call the US) about that incident in the Persian Gulf a few months back when our guys stopped and boarded a Chinese freighter allegedly full of chemical warfare ingredients. They found nothing.
Gao calmly rattled off a fairly staggering list of statistics on how rapidly the phone system there is growing - half to three-quarters of a million lines added per year for the foreseeable future. All of their local exchanges are webbed together with fiber, and they're running fiber down the coast toward Shenzhen. They're setting up packet-switching networks for their customers who want them - banks, import/export houses, and the like. The cellular and CT2 networks are also growing as rapidly as technology allows. He buys scads of high-bandwidth technology from the West and is actually trying to set up a sort of clearinghouse near Shanghai where Western manufacturers could gain access to the potentially stupendous Chinese market through a single point, instead of having to traffic separately with each regional PTA.
Gao is baffled by the fact that the US makes all the most advanced technology, but our government won't allow him to buy it. He asked me to explain that fact. I didn't suppose that haranguing him about human rights would get me anywhere, so
I mumbled some kind of rambling shit about politics.
He explained to me, through his interpreter, that the slogan of Shanghai PTA is "destroy the users on the waiting list." Indeed, it's the job of people like Gao to extend the net into every cranny of the society, making sure everyone gets wired. When nobody had phones, he says, nobody really missed them; thevery few people who had them in their homes viewed them primarily as a symbol of status and power. Now, 61 percent of his customers are residential, everyone views it as a basic necessity of life, and Gao's company has to provide them with more services, like direct dial, pagers, and so on. Cellphones, he said, are so expensive that they're only used by businessmen and high-ranking officials. But the officials are uneasy with the whole concept because they have to answer the phone themselves, which is seen as a menial chore. I told him that in
Hong Kong, businessmen walk down the streets followed at a respectful distance by walking receptionists who carry the phones for them. Gao thought that was pretty funny.
In one Chinese city, a woman spends all day running a sidewalk stand and keeping one eye on a construction project across the street. The construction project is backed by a couple of people who were running a software counterfeiting operation to the tune of some tens of millions of dollars until they got busted by Microsoft. They hid their money and have been sinking it into the real estate project. Microsoft is paying the woman a lot of money (by the standards of a Chinese sidewalk vendor) to watch the site and keep track of who comes and goes. She has a camera in her stand, and if the software pirates ever show up there and she takes a picture of them, she gets a whopping bonus, plus a free trip to the United States to testify.
Microsoft runs an office in Hong Kong that is devoted to the miserable task of trying to stop software piracy in Asia. In addition to running their undercover operation in the sidewalk stand, they are targeting a number of operations in other countries, which probably provides a foretaste of what's going to happen in mainland China a few years down the road.
Most East Asian countries have sort of a stolen intellectual property shopping mall where people sit all day in front of cheap computers swapping disks, copying the software while you wait - the vaunted just-in-time delivery system. After a few of these got busted, many switched to a networked approach.
One guy in Taiwan is selling a set of 7 CD-ROMs containing hundreds of pirated programs. He has no known name or address, just a pager.
Taiwan, the most technologically advanced part of Greater
China, makes a lot of PCs, all of which need system software, so there the name of the game is counterfeiting, not pirating.