The Evolution of China’s Anti-Poverty Strategies

Front matter

William N. Brown

~ The Evolution of China’s Anti-Poverty Strategies

Cases of 20 Chinese Changing Lives

Preface

Throughout the 1980s, I faithfully read China Reconstructs’ (now China Today) to keep abreast of China’s war on poverty. I was skeptical but also hopeful because even if China realized only a fraction of its goals, hundreds of millions would escape poverty, and perhaps inspire other nations to follow suit.

After a decade of reading about China’s changes, we determined to see them firsthand and in 1988 I moved with my family to Xiamen University to study Chinese. The trip from Los Angeles entailed 50 h on 3 planes and an 18 h boat trip up the coast from Hong Kong. Upon arrival, we were surprised to learn that even in Xiamen, a Special Economic Zone facing Taiwan, roads were still potholed, transportation was poor, electricity and water outages were almost daily, and store shelves were empty. Yet the people were optimistic because life had never been better and they were confident in the future.

After two months of Chinese study, I was asked to teach MBA for one year. Dean Liu Peng said, “We will build one of China’s top ten business programs!”

I reluctantly put my Chinese studies on hold for one year and then accepted a second year of teaching, and a third. I’ve now been teaching, temporarily of course, for 34 years, but still hope to someday resume Chinese studies.

Even though I was confident in China’s future, I expected change would take 50 or 60 years—that we were “planting trees for future generations to enjoy the shade.” After all, at that time even a landline phone cost me 450 USD and took 3 years to install. No one could have imagined 30 years ago that by 2021, sleepy Xiamen’s GDP would exceed 700 billion Yuan.

But the miracle of the China Dream is seen best not in dry statistics but in the changed lives of people across the entire nation.

In January 1989, I made my first trip to see how rural farmers and fishermen lived and discovered that 50 miles from Xiamen were like traveling back 50 years in time. I rode buses, motorcycle taxis, farm tractors, and bicycles, and hiked for hours through rice paddies and up and down mountain trails. Not surprisingly, rural areas were poor, yet rural Chinese were as cheerful and optimistic as the urbanites. They were also openhearted and hospitable.

vi Preface

I stayed two days with a poor farmer I met and marveled at how well they ate. Only months later did I learn they had served me, a stranger, the treats they’d been saving for Chinese New Year only two weeks away. It’s no wonder that I quickly fell for Fujian and its people, but when I wrote articles about urban and rural changes, foreigners argued, “Only the coast is improving, not the hinterlands!”

“How would you know?” I asked. “You’ve never been there.”

“True,” they admitted, “but neither have you!”

They had a point. So in 1993, I bought and customized a 15-passenger van and that summer we drove about 20,000 km around Southeast China. It was a grueling drive, but emboldened by our survival, we set our sights on Tibet. In the summer of 1994, we spent 3 months driving 40,000 km from Xiamen to Mongolia in the North, west across the Gobi Desert to Qinghai and across the 5231 m Tangula Pass into Tibet, returning to Xiamen through South China.

At that time, even large stretches of National Highway were dirt or gravel. In Sichuan, we were stuck for 3 days when a downpour washed the national highway down the cliff. In such remote areas, farmers worked dawn to dusk to wrest meager crops from their land, yet their vegetables or fruit often rotted before they could lug them over steep mountain trails to markets. And yet even those remote peoples were also optimistic because China was already investing heavily in rural infrastructure, medical care, and education.

China learned early on that economic development alone is not enough to end poverty because wealth does not simply “trickle” down to the poor. And though aid is needed at first, longterm it can lead to dependency and poverty of spirit. So China aimed to foster self-reliance by providing even the remotest people the infrastructure and support to lift themselves from poverty. “Roads, then riches.”

But the secret to China’s success may well be that the war has been both top-down and bottom-up. Deng Xiao Ping said, “Those who prosper first should help those who lag behind,” and hundreds of thousands of Chinese have volunteered to live in the poorest areas to ensure people understood and seize new opportunities.

After driving some 200,000 km around China, I no longer doubted China’s 7- decade commitment to ending poverty. But in 2013, even I was shocked when Xi Jinping told Miao minority villagers in Hunan that he believed China could end absolute poverty in 2020.

I knew, of course, that if anyone understood the challenges, it was Xi Jinping. In the summer of 1988, young Xi Jinping was transferred from Xiamen to Fujian’s Ningde, one of China’s 18 poorest counties. He was so dismayed by Ningde’s poverty that he sent a video to Beijing of such stories as couples so poor that husband and wife shared one pair of pants.

Xi visited every Ningde village and sometimes worked the fields with farmers as they discussed problems and solutions. He took poverty work seriously and did not hesitate to criticize “tinkerers.” In 1990, he wrote about officials who displayed awards about work that did not improve people’s lives:

Hanging up so many award banners without one for economic development was not very impressive. To put it more politely, it reflected working hard without performing a true service. Working without setting priorities and sticking to the fundamentals is simply tinkering.

Preface Vii

It was also in Ningde that Xi Jinping learned how minorities’ poverty was compounded by cultural and geographic isolation and language barriers, and even his wife, a famous singer, helped him protect and promote the She minority’s heritage and culture.

Yet in spite of Xi’s rich experience, I was skeptical of his 2020 goal, so in 2019 I drove around China again to see how much had really changed in 25 years. Thanks to the world’s best highway network, in 2019 I finished in 32 days of the trip that took 3 months in 1994—and it was only 20,000 km instead of 40,000. And I saw firsthand that even the remotest Tibetan valleys had benefited from “No one left behind.”

By 2019, the remotest villages’ mud houses, which had been death traps during downpours, had been replaced by new homes with concrete roads right to their doorsteps. Farmers now had easy access to markets but thanks to the world’s most extensive Internet (reaching even Mt. Everest), many farmers used e-commerce to bypass middlemen and sell quality products direct to customers.

A Ningxia farmer said to me, “We were frogs at the bottom of a well, but now we are free.”

As a business professor, I’m duly impressed by China’s economic statistics, but I am most moved not by numbers but by the changed lives—people like Madame Yangying, the maid-cum multi-millionaire philanthropist.

A 19-year-old farm girl with 4-years of education, Yangying dreamed of earning 20 Yuan a month as a Xiamen University professor’s maid and sending 10 Yuan a month to her family. She did land the maid’s job, but today she’s an entrepreneur with 4 international schools, including Xiamen International School, a biotechnology company, real estate holdings—and she has donated hundreds of millions of Yuan to promote education and fight poverty across China.

For 300 years, Dawa Wangdui’s family served Tibet’s Panchen Lama, who was second only to the Dalai Lama, yet they were as impoverished as other Tibetan serfs. Young Dawa taught himself Chinese, labored for 1 yuan a day, went into business, and today earns millions from his international firms that help preserve and promote traditional Tibetan culture, crafts, and products. After dinner in his home, he played a Tibetan instrument and danced, and then gave me a hearty Tibetan bear hug. “In Old Tibet,” he said, “we envied the nobility, but today average people live better than those nobles.”

I was proud of having driven 40,000 km around China in 1994 until I met in Mongolia the photographer Mr. Zhang Fang. Zhang walked 40,000 km across China’s deserts to document and raise awareness of the threat of desertification.

Gerile, a Mongolian mother, cried as she shared her family’s tragic experiences in earlier years. But thanks to Mongolia’s improved infrastructure and environment, she earned enough selling her homemade Mongolian dairy snacks to send her daughter to Xiamen University and graduate school.

Mr. Zhang Jianlong was a migrant worker in large cities but returned to his home in Ningxia, which even a UNESCO official had deemed hopeless, to take advantage of government programs for rural entrepreneurs. This young “Cattle King” now has hundreds of cattle and has helped lead his entire village out of poverty.

viii Preface

Xiamen University alumni Liu Yunguang is CEO of a company whose computer games led the markets of China, South Korea, and Japan. “Overnight, I had engineers switch to educational software,” he said, “because games had such bad influence on children.”

“How did your company survive?” I asked.

He laughed. “We are leaders again, but now we don’t hurt children, we help them.”

Yunnan farmer Xu Lidao, a proud self-made man, learned the truth of Xi Jinping’s warning, “People are fragile. One costly illness can devastate a family and impoverish them for generations.”

At age 28, Lidao built the best house in his village, but then a deadly illness left him bedridden and at death’s door for months. “I had no hope, but our leaders got me the medical care I needed. I owe everything to them.” Today, Lidao is again healthy and confident, but also well aware that “no man is an island.”

Shortly after Jing Xuhua’s husband died in an auto accident, the widowed mother lost her job. After reluctantly leaving her beloved 5-year-old daughter with her family to labor in Japan, she returned to China, moved to Qingdao, and taught herself real estate. “When customers asked me questios,” she said, “I’d have to look up definitions in a dictionary.” Thanks to her success secret, “family love,’ her company now has over 200 people. “We show love to both workers and clients,’ she said. “People first, then profit.” Her new dream is to start a school where children learn both book knowledge and social skills. “Children need to be human,” she said, “before they can do anything else.”

Wang Zenghao is one of thousands of young Chinese volunteers fighting poverty in West China. “When I was 20,” Zenghao said, “most classmates thought only of marriage, houses, and cars, but I wanted to do something meaningful such as help Tibet.” He prepared by volunteering for 2 summers in poor regions of Guizhou. “I deliberately put myself in difficult situations to develop my ability to endure hardships.”

A Mongolian mother, a former Tibetan serf, a professor’s maid with 4-years education who started 4 international schools, a youthful volunteer embracing hardships in Tibet—these are the Dreamers that helped make the China Dream a reality. Yet even in this prosperous and technologically advanced twenty-first century, poverty and hunger are still widespread in many other nations.

I hope the world can take heart from China’s example, because as a Chinese leader told me, “As long as some are poor, we are all poor.”

Xiamen, China William N. Brown

Contents

NN wn A

Jing Xuhua—A Loving Mother Triumphs at Home SHOW MUSIMESS® auekdanse¥aeane den cdaeeae dared eos ie eri erR eda

Gerile—Making Snacks to Put Her Daughter Through College ....

Chapter 1 A) Mogan Mountain’s Tang Hairong get Chinese’ Profound Faith in Education

“The Chinese have a profound faith in education. High and low and rich and poor are absolutely of one mind on this point, and if a boy is not sent to school, it is either because the parents are too poor, or because they have not sufficient authority over him to compel him to study. One need not be surprised at this unanimity of opinion, for education is the royal road to the honors and emoluments that the state has to bestow, and it is by means of it that the wildest ambition that ever ran riot through a young man’s brain can ultimately be satisfied. In the West there are many ways by which a man may rise to eminence...In China they are all narrowed down to one, and it is the one that leads from the schoolhouse.”

As our van slithered up the road snaking through Mogan Mountain’s bamboo forests in 1994, I could see why the enchanting scenery and cool climate of this “Little Switzerland” lured nineteenth century Chinese and foreigners seeking respite from the sweltering summers of Hangzhou and Shanghai. Chinese elites, as well as Western missionaries, businessmen and diplomats, built houses, villas, churches and public buildings, and over 100 villas remain to this day, including one in which Chiang Kai-shek spent part of his honeymoon.

Yet in spite of Mogan’s beauty, its prized bamboo forests and treasured high mountain tea, most locals remained mired in poverty back then, so I was delighted to learn during my 2019 exploration of China that even Mogan Mountain folks were finally enjoying the Chinese Dream thanks to visionary entrepreneurs like Tang Hairong, alumnus of Xiamen University (XMU).

Mr. Tang grew up on a poor farm but his childhood was enriched by a passion for books. His love of learning reminded me of ancient tales of youths who, too poor for candles, read books by moonlight reflected from snow or by the glow from lanterns of fireflies. The farm boy’s love of learning paid off because as soon as college entrance exams resumed after the Cultural Revolution, he tested into the Shanghai Institute of Building Materials (now merged with Shanghai Tongji University). He graduated in 1984 and worked several years in provincial government agencies before seizing

© New Channel International Education Group Limited 2023 1 W. N. Brown, The Evolution of China’s Anti-Poverty Strategies, https://doi.org/10.1007/978-98 1-19-7281-2_1

Fig. 1.1 Prof. William Brown interviewing entrepreneur Tang Hailong in Hangzhou, Zhejiang on July 4, 2019. Photo by Zhu Qingfu the opportunities of reform and opening up by investing in business and establishing the Zhejiang Jinyan Technology Co. Ltd., for which he is chairman of the board.

Mr. Tang’s passion for learning has yet to subside. He believes that knowledge is key to changing fate and achieving one’s dream, so he took EMBA programs at XMU and Fudan University. Over the years he has not only excelled in business but also obtained a technology patent that he industrialized and which now accounts for most of the company’s profits.

Although Mr. Tang epitomizes New China’s self-made entrepreneurs, he is quick to admit that he owes much of his success to China’s 40 years of reform and opening up.

Mr. Tang grinned as he said, “Those of us in our 60s experienced firsthand China’s transition from a planned economy to a market economy. This is what let China leapfrog development. And my generation was lucky. Those just a few years older than us never had the chance to enter university, but we did, and we got good jobs after graduation. You yourself witnessed China’s very rapid development in the 80s, Professor Pan (Fig. 1.1).”

“Where do you live now?” I asked.

“Thave a factory in Deqing County, 50 or 60 km from Hangzhou. It has very beautiful scenery, and many Europeans are familiar with Mogan Mountain. On weekends, many city people go there, and you see more foreigners than locals — especially Europeans. There are so many bed & breakfasts (B&Bs) there now. It was not at all like this when I was young, but now the entire country likes to stay there. There are many Europeans, South Africans, etc. and many have opened what we call yangjiale — our term for foreign B&Bs. Europeans come, buy a small plot of land, and open a small hotel with a dozen rooms. When locals open this kind of small hotel, we call it a nongjiale — Rural B&Bs. We have many of these, and they are very nice thanks to our superior location so close to Hangzhou and Shanghai.”

“But what about your own story?” I asked. “Your own Chinese Dream?”

“My story? It would have two parts,” he said. “One is a dream — the Chinese Dream. And the other is innovation. I was a poor farm boy and became very independent at age 11 because my parents were sick, which forced me to do everything from cooking to washing clothes.”

“Do you have a sister?” I asked.

“I have two elder brothers, one seven years older than me and one nine years older. But my parents have always been sick, and we were so poor that my brothers left home early to seek work, leaving me alone to care for my parents. The state subsidized my studies, but I had to work hard in the summer and winter vacations to earn my tuition and pocket money, but I worked hard to make it through junior high school to high school because we all shared a dream.”

“What dream was that?” I asked.

“Being able to read books was a dream! Most people were illiterate in the old days. Then I went to high school, and I was laboring the very day I got the university acceptance letter. I was so shocked when the postman handed me the letter that I leaped up — and fell heavily! After university, I returned to Hangzhou because of my good grades, and then I studied in Shanghai’s Tongji University, which was then called Shanghai College. XMU has always been independent, with few schools integrated into it. But Tongji University was later merged with many schools. After college, I was assigned to work in a government agency where the conditions were not good at first. As our planned economy underwent a social and economic transformation to a market economy, everything was allocated and ration coupons were required to buy anything.”

“I remember that,” I said. “It was confusing to me to have to use flour, vegetable and meat ration coupons even at the university cafeteria.”

“But people’s thinking changed after we entered the market economy,” Mr. Tang said. “As the conditions improved, those of us with even some education, knowledge and enterprising spirit saw that we could strike gold everywhere!”

“Yes, others have likened it to the California Gold Rush,” I said.

Mr. Tang nodded in agreement. “When you first arrived in China, the country was still very poor and not developed at all. But anyone with a little knowledge, willingness to work, and readiness to take a risk was certain to succeed — capable and innovative people like me!”.

“While working in the early 1990s in the building materials department, I was responsible for many industrial projects, and I developed a patent myself. At that time there were still very few college students. We had more than 200,000 candidates but only just over 10,000 college students. Only a few people from an entire township or county would take the college entrance exams — compared with thousands nowadays. The opportunity to study was rare but priceless if we could apply the knowledge after graduation. Even with a very backward situation, we knew that if we had a little knowledge and studied harder, things would improve.”

It was perfect timing for Mr. Tang. “It takes a big investment nowadays to create innovative technology,’ he said. “But at that time everything was so outdated, and society needed such change that all we had to do was go abroad, visit our professional counterparts, and get ideas for adapting new technologies. But today it is different.”

“Yesterday, and last month as well, I talked about Ren Zhengfei’s example because Americans are trying to suppress others. But it doesn’t matter. In our new era of sharing, technology is borderless. For example, some companies may create a new tech but they may license it to other companies to produce it, and they may also produce the other company’s patented tech as well. Both companies benefit and even the patent fees can be offset. You give me your products, and I give you mine. But in today’s world, many people ignore the spirit of cooperation.”

“China is developing fast but it is no threat to the world. China’s development has made many achievements — our convenient travel by high-speed rail, for example. Many people think our bullet trains are Siemens but they are actually based on Japanese technology that Chinese evolved to far surpass that of other countries. This is not stealing technology. At first, we simply cooperated, but other countries’ technology was stuck in the 1980s, so we Chinese innovated and developed even better technology.”

“Tve seen this myself,’ I said. “Chinese used to send engineering students abroad, but today the world is sending its engineering students to China.”

“Yes, many Westerners mistakenly think Chinese are not innovative, but that’s not true,” said Mr. Tang.

I thought of Joe Biden, who in 2014 said that the US was innovative but China had not developed “one innovative project, one innovative change, one innovative product,'” and even in 2019 he said that China was no competition for the US.

“China has developed very fast,” Mr. Tang said. “My classmates and friends who settled in the US returned home after two or three years and were astonished. The speed of China’s development was unimaginable for them, and some of them now regret emigrating. They were all top talents with deep academic foundations, and they settled abroad because they thought China was so backward and foreign countries were so good. But later, after seeing how so many people created great wealth during China’s rapid development, they regret squandering such a great opportunity.”

“You certainly seized the opportunities,’ I said. “Even with your childhood poverty, and having to care alone for two sick parents, you worked hard anyway to change your destiny and enter college. What motivated you?”

Mr. Tang smiled. “We have an old saying, Carp Leaps the Dragon Gate (#2 41 iK

! Roberts, Dexter, “Biden Makes a Habit of Dissing Chinese Innovation,’ Bloomberg Businessweek, May 28, 2014. https://www.bloomberg.com/news/articles/2014-05-29/biden-makes-a-habit-of-dis sing-chinese-innovation.

“Yes, in the old days, those who passed the difficult imperial exam were said to be like the carp that leaped the dragon gate on a legendary mountaintop above a waterfall. I suppose your generation did that.”

“Life was difficult in my youth,’ Mr. Tang said. “But if you have hope, you redouble your efforts. Today’s children are very happy, and many don’t care to hear stories about the old days that are so different from now. When college entrance exams resumed at the end of the Cultural Revolution, college became our only way out. And it is very equitable to this day, even though it is exam-oriented, because it is the only hope for children from poor families. In high school, I lived on campus and lights were turned off at night, so we read with flashlights. But though we were poor, we knew we could change our thinking. There is an old Chinese saying that the poor are always thinking about change.”

“You were obviously very motivated,” I said. “But so were many others, yet they failed the entrance exam. What set you apart from others?”

Mr. Tang didn’t get my point because he replied, “Unlike today, with its abundant educational resources, there were few resources back then. Many people were poor, but if you worked hard and paid the price, you would be rewarded.”

I pressed on, determined to find out what really made him tick. I said, “My point is that your conditions were even worse than other people’s. You were not only poor but your parents were both sick — how did you stick with it?”

“After high school, we had to decide on either furthering study in a college or ina technical secondary school,” Mr. Tang said. “Technical school was easier to get into, and for those of us able to test into college, going to a technical school would have been easier. But many of my teachers thought that if I worked hard, I could take the college entrance exam, and only the top students entered university. My Deqing No. 2 Middle School had only 16 students reach the cut-off score.”

Now I was getting somewhere. So many others I’d met, such as Professor Hu Min, CEO of New Channel, had told me that the turning point in their life was a teacher’s influence or intervention. “Even though your family was poor, your parents sick, and college entrance exams were hard, you pressed ahead because many of your teachers believed in you. This I can understand. But what makes you continue to excel to this very day?”

Mr. Tang was silent. It occurred to me that he had probably never thought about why he stood out from the herd. “Well, it must have been because of my own efforts. Suffering mountain children’s only hope to change their fate was the college entrance examination. As I’ve told my daughter, knowledge can change destiny. Knowledge widens your horizon. It’s the same with technology. If you have a keen mind and a level of knowledge, you will certainly master something new. But practice is very important — especially now with China’s rapid development. In the future, China will have even stronger capabilities in technology and innovation. As I go forward, P11 discover my shortcomings and improve myself. Innovation in China is everywhere, and development involves all aspects. As long as you keep learning and growing, you will discover new shortcomings — and you must keep correcting them. If you see your own shortcomings, you will correct them. Many innovations were not conjured out of thin air. When China was poor and had nothing, we had to create from nothing.

But today it takes practice to see deficiencies up front, and as knowledge grows, we improve upon our creations.”

“This is the case in China, and perhaps Japan as well. The US may have more people doing scientific research and innovation than us, and its innovation foundation is very strong, but China is innovating through practice in many areas, and I think this is very good. If the world remains peaceful over the next two or three decades, in the next 20 or 30 years, China’s development prospects are boundless.”

“What do you think have been the greatest changes in your company and China over the past 25 years?” I asked.

“T started my business from scratch in 1994, exactly 25 years ago,” Mr. Tang said. “T started with RMB300,000 but I could not sell my patented technology. I thought it was very good but the companies I visited paid no attention to me. I had to wait for a research and development organization to appear before my innovations could be transformed into industrial products. It was very difficult to promote and industrialize my patented technology. I tried for half a year but no one accepted it. I was loath to give up what I’d worked so hard for, so I resigned from the agency, which was a very good job with good conditions and an apartment given to me, and started my own business. Then I hit on the idea of telling chemical companies that they could use my patent for free but they had to purchase their materials from me. Sales of these small materials generated tens of millions in annual sales, and with excellent technology, profits doubled. I promoted my technology in this way until I eventually had 100 percent of the entire national market for cities.”

“It was very good technology but by 2008 my industry had peaked and it was no longer the latest technology. Sooner or later, new technology would replace mine, so since 2008, my main focus has not been on my production and products but diversifying in finance and banks. But now my 15-year patent has expired, so since last year, I have been thinking about withdrawing entirely from the market and how to smoothly turn the factory over as a base for my children who are doing cross-border e-commerce work—and then I will retire!”

As Mr. Tang’s factory is being rebuilt, he is expanding into foreign trade—and he feels he is luckier than the students who later went abroad. “Our generation was lucky to experience China’s great reform and opening up. Students who went abroad did not get to witness the huge changes. My experience is much richer than theirs, and my life has been more colorful. Premier Li Keqiang called for ‘mass entrepreneurship and innovation,’ but in fact China has been innovating ever since reform and opening up began. We work hard but we are low key — this is the style of Zhejiang businesspeople. And Western countries now feel threatened by China’s rapid development.”

“But China’s development is not a threat to the world,” I said.

“China has never initiated a war overseas,” Mr. Tang said. “The Chinese love harmony and peace. For example, in China, we are never afraid to walk about at night, but many countries cannot understand this. The West does not understand China, there are many misunderstandings. Professor Pan, you have felt the peace in China.”

“Yes, I have, but people in other countries are not so peace-loving, and they fear China because they think Chinese are the same as they are.”

“Many people have different perspectives,’ Mr. Tang said. “They have not witnessed how China has developed. In fact, China is a very peaceful country, and it has had more development opportunities and faster innovation than any other country. But for the sake of peace, globalization and sharing, we are now hiding ourselves. We do not show our edge — people such as Ren Zhengfei, who we call a ‘spare tire.’ Some time ago, I saw our COMAC C919 take off. Many people say that the future of aviation will be ABC, which means Boeing, Airbus and China. In my opinion, China’s development has no hidden agenda. We have only one purpose, which is to do our own thing, devoting our efforts to innovation and enjoying the fruits of development.”