Episode 225 – China and the Labor of Reinvention with Lin Zhang

Macro N Cheese – Episode 225
China and the Labor of Reinvention with Lin Zhang
May 20, 2023

[00:00:00] Lin Zhang [Intro/Music]: China indeed had made, I would say, a radical break with its socialist past in the post Mao years trying to reintegrate into the global capital system, which is led by the US.

If the US is determined to treat China as an existential threat, it is facing a foe of unprecedented scale. But alternatively, I think US could also negotiate peaceful coexistence with China, but that would require a transformation of mindset on the part of US politicians.

[00:01:35] Geoff Ginter [Intro/Music]: Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

[00:01:43] Steve Grumbine: All right. This is Steve with Macro N Cheese. Today’s guest is Dr. Lin Zhang, and I am extremely excited about this. I didn’t know what to expect. I picked up her book, the Labor of Reinvention: Entrepreneurship in the New Chinese Digital Economy. And for those of you who know anything about me, my capstone in my graduate studies was a trip to Beijing and Shanghai, and I got to experience firsthand some of the development as United States corporations tried to set up shop within China, some of the rules and regulations that were involved in doing that, and all this was such an exciting period of time for me. And so I said, I wanna learn about China. So this trip was fantastic. And as I’m growing in my knowledge, both as a political activist, as a commentator, and in my other role, the Rogue Scholar, learning this stuff has been very enriching.

So Lin’s book was something that I wanted to dig deeper into because things really changed at the global financial crisis. And one of those things was a shift in the way Chinese entrepreneurship started shaping and molding society there. So when I saw this book, I said, I gotta talk to her. And she was kind enough to come on.

And so with that, I am going to introduce my guest. Dr. Lin Zhang. Thank you so much for joining me today.

[00:03:11] Lin Zhang: Thank you, Steven, for having me on your show.

[00:03:15] Grumbine: Let me just give you her bio. Lin’s an assistant professor of communication at the University of New Hampshire. Her research centers on information regarding capitalism, platform studies, and intersectionality focusing on China and ethnic Asian people in a global comparative context, and in spaces of transnational encounters. A communication scholar by training, her interdisciplinary research engages Asian, Asian American studies, science and technology studies, economic geography, and anthropology.

And that is a great introduction. So thank you so much once again for joining me today.

[00:03:58] Zhang: Thank you. The pleasure is mine.

[00:04:01] Grumbine: So let’s just jump right in. I talked to you a little bit offline. To set the stage for this and this book seems rather timely. What was your motivation for writing and maybe you could tell us what it is all about as well.

[00:04:16] Zhang: Sure. So this book was not an easy book to write, so as I wrote in the epilogue of the book, I first got inspiration for this project when I actually visited my extended family in rural Shandong Province, which is in the northeast of China, in the early 2010s. And on that trip I actually saw many advertisements for Taobao in the countryside.

For those of you who don’t know, Taobao is a e-commerce site affiliated with the Chinese e-Commerce Corporation, Alibaba. It’s a C2C platform. So during my stay there in the early 2010s, I learned that one of my cousins who used to be a migrant worker in Guangdong Province had reinvented himself as an e-commerce entrepreneur.

And he also took me to the so-called TaoBao e-Commerce Village nearby where he sourced the handcraft products and sold in his TaoBao store. And later I realized that it was only the beginning years of a new phase in China’s economy. And a defining feature of this new phase, as I explained in the book, is the proliferation of the kind of entrepreneurial labor, whether they are rural e-commerce entrepreneurs like my cousin, the people of diverse background, whom I met in Beijing’s Zhongguancun – Zhongguancun is a high tech district in Beijing – I met in the co-working spaces and incubators, or the transnational mobile Chinese women entrepreneurs I met in Los Angeles and elsewhere who resell luxury products via social media. So going back to your question, I wrote this book partially because I saw China as part of the global digital economy, has been going through transformative moments with a rise of new types of technologies, regime of production, labor, and that they are reshaping the country and people’s lived experience there.

So I want to definitely make sense and document these changes. But equally important as I emphasize in the book, not just the ruptures, the novelties of new economy, but also the communities in China’s new economy. And how the sort of innovation system from the state-led model to the significance of, for example, family production in all this. And more recently when I was actually revising and finishing up the book because of the deteriorating bilateral relations between the US and China, there is increasingly a growing disconnect. What I think is a disconnect between the China that I experienced in China and also the China I see on American mainstream media. So I hope this book, which kind of combines history with ethnographic stories could help to supplement, if not in a way modestly counterbalance perspectives in the mainstream anglophone public’s sphere.

So I think Western English speaking readers need and deserve to hear more diverse viewpoints and stories about China. And I want to add that this is not to say that China does not have its problems, if anything, I identify many problems and limitations within China’s new developmental past. So I hope this book would also have some policy implications for Chinese policy makers and the general public.

[00:07:48] Grumbine: Appreciate that immensely. One of the things that jumped out at me when I was reading the book was the story of Min. In your intro, your preface to the book, you talk about the story of Min, and from my vantage point, Min represents many of us in the US from very humble beginnings that suddenly stumble into this entrepreneurial spirit.

They wanna break free of the shackles of maybe past mistakes in jail, maybe done various things through their life. And the unfortunate thing in the US is that a lot of times once you’ve been in the system, there is no bounce back. But Min, he had been in the system and was able to find a way to reinvent himself through the opportunities in China right now.

 I wonder if you can maybe tell us a little bit about the story of Min.

[00:08:43] Zhang: Sure. Yeah. So Min is a very interesting figure that I document in the book. It’s actually not a typical story, not typical of the entrepreneurs I met in Zhongguancun in Beijing, but I think his story really helps to illustrate very well with the history of Chinese post-Mao entrepreneurial reinvention. So he’s older, he was in his late forties at the time when we first met.

So most of the entrepreneur I met was in their twenties or thirties or early forties. And so he is really one of the more mature person there. And his online marketing startup was one of the incubatees at a new incubator in Zhongguancun. Uh, he is a peasant, so he was born in southeast China’s Fujian province to a peasant family.

And because of Fujian’s geographical proximity to Taiwan and also Southeast Asia and also its early opening it’s trading ports to international trade, many Fujianese had immigrated abroad. Actually, for those of you who don’t know, many of the early Chinese immigrants to the US, those who built the transcontinental railroads and ran laundries and restaurant business were from Fujian.

So Min told me that this kind of adventurous entrepreneurial spirit runs really deep in his blood and his entrepreneurial trajectory actually paralleled the major watershed moments in China’s post-Mao reform. He was in the beginning apprenticed to a local trade penning artist at a very young age to start supporting his family, and then he went to a tuition free teacher’s college and became an art teacher after graduation.

When the post Mao reform and opening up really accelerated in the nineties under Deng Xiaoping, he started to run his own art training school and invested into newly emerging bars, which got him into the orbit of local gowns. And at certain point, as you mentioned, he actually even served a short sentence in the prison. And a few years after he got out in the late nineties and China had entered the WTO, the World Trade Organization, which gave him actually another opportunity to redeem himself. And this time he started out as a shop assistant in the fashion retailing store, and worked his way up until he became the boss of his own fashion company, which adapted the latest high fashion styles into affordable fashion for young people.

So basically the H&M and Zara style. At its peak in 2006, Min’s business boasted annual sales of more than 1 billion RMB, and so he’s really a kind of millionaire, if not a billionaire for a while. Unfortunately, his business started to falter really after 2008, partially due to fallout from the global recession, but also because of the boom of e-commerce in China.

So that’s when I met him in Zhongguancun, trying to reinvent himself once again as an internet entrepreneur. So I think Min’s story in a way, captures the sort of imperative of entrepreneurialism in which we are all still living. Contemporary capitalist economy. The need to kind of keep reinventing oneself to adapt to the constant changes, but also the kind of contradiction generated on a personal and collective level.

So the coexistence of opportunities, risk and frustrations. So this is, I think, what I try to document in the book, the everyday labor of entrepreneurial reinvention. But I definitely agree with you that because of in the early days, the sort of residual of the social system, the teachers college tuition free, and later on, all this new economic opportunities opened up at every stage as China gradually reintegrated into the global capital system. On a structural level, that opened a lot of opportunities for people like Min in China, and that’s why we see, I would say, great social mobility through entrepreneurship in China in the past few decades or so.

[00:13:03] Grumbine: One of the challenges that I found after I graduated in 2008, after the global financial crisis hit, I began to realize that there’s no real net in the United States. An entrepreneur or someone trying to “be all they can be” within this capitalist system, it was a real hard trade off in terms of what’s protecting you from exploitation.

Entrepreneurs tend to not look at those things. They have a focus, an energy that drives them beyond the risk and they accept the risk and they press forward. Some are more pragmatic. But there’s a definite mindset for being an entrepreneur and given the post Mao reforms and even during Mao, I understand that in China, that people do have good services that are part and parcel with being a citizen within China, that there’s just certain things they will not have to worry about because it’s taken care of for them.

I’d be interested in your assessment of the ability to take risks when you know that your country takes care of your basic needs as opposed to taking risks when none of your basic needs are met and its dog eat dog. There’s a balance there to some degree, is there not?

[00:14:30] Zhang: Mm. Yeah, to a certain extent I would say that’s true, especially in the early years. For example, in the Zhongguancun case, I talked about a lot of the high tech entrepreneurs. Before they started their business starting from the eighties and increasing in the nineties, they were kind of affiliated. They were part of a big socialist workplace in China, they call it danwei, so they were kind of a danwei person. So they have already a decent salary and all the kind of pensions and place to live, usually allocated for free for you to live in. And then, when they started business, so a lot of the early businesses were not really private business. They were actually affiliated with the socialist danwei or workplace.

So there were technology transfers. There was no cost workplace for you to establish your business, and there were personnel support, especially in Zhongguancun in Beijing, the local officials who are quite supportive of these entrepreneurs for various reasons. Taxation providing employment opportunities and all that.

So I think in the early days, that could serve as a kind of basis to help soften some of the risks that entrepreneur would face in their life. And also, if you look at the countryside pace, so definitely there is a big rural/urban divide and in a lot of ways, socialist China, the urbanization, the industrialization has been built on the back of the countryside, making sacrifices.

So you definitely have that inequality built in there, which the party is trying to redress in recent years. But also there was this fact of the collective ownership of the land. So the state still owns all of the land in China. And then the villagers, the peasants were, in theory, leasing the land from the state.

So in that sense, you have your land there. Even if you go to the cities as migrant workers to work in the factories, like my cousin, you can always go back to your own land and you have your house there, which is different from, for example, the experience in India. Or in some of the Latin American countries and even in the US. So urban catalyzation..

So China is in a way, be able to avoid that because of what they call the kind of rural reserves that are there that migrant workers could return to the countryside. For example, in my case, to start a business, start an e-commerce business actually for my cousin to utilize the traditional industries in the area.

So family and based on the collective ownership of land that made it possible by the socialist revolution and transformation reform. And that’s also I think, a model that makes China in a way different from not just the US, but many other developing countries as well. So you can see this as a mechanism that would encourage Chinese individuals, whether they’re more elite or more grassroots, to be more entrepreneurial and adventurous and risk taking.

[00:18:02] Grumbine: I’m gonna butcher this, so I’m just gonna cut it down to ZGC. When you read the book, and you should read the book because it’s worth reading, ZGC, it’s a tech corridor like Silicon Valley or the Dulles Tech Corridor. The thing that I found fascinating with this, they had state sanctioned incubators that allowed people with really good ideas that would maybe benefit for larger purposes, they would invest in them. So sort of a flavor of state sanctioned entrepreneurial endeavors. Is that a fair statement?

[00:18:41] Zhang: Yeah, it’s interesting that you mentioned ZGC or Zhongguancun actually represent a hybrid of Silicon Valley and Dulles Tech corridor of sorts for China. So I think which really helps to clarify for American listeners or readers of the book, the specific positioning of Zhongguancun in China’s tech world and Chinese economy.

So it is definitely more statist than Shenzhen and the Pearl River Delta region that we hear a lot about these days regard to technology and also the Yangtze River Delta area was the traditionally more developed region of China. And since the founding of the People’s Republic in 1949, Zhongguancun has been serving as one of China’s science and technology bases because of the heavy concentration of universities and research institutes. Many were founded in the 1950s following the Soviet model, and were actually behind socialist China’s major IT breakthroughs like the first computer, the nuclear technology, the first computer chip. So definitely you’ll see it has a long history, but also during the height of the socialist class struggle.

So during social struggle you definitely have that side of more industrial side, but also the very political side of the socialist class struggles. The great leap forward and the cultural revolution and Zhongguancun universities were also sites where radical experiments were carried out to eliminate so-called Maoists’s three major inequalities. Inequalities between urban and rural dwellers, between intellectual and manual work and employment in

manufacturing and agriculture. So you’ll see this kind of struggle to balance between economic development, social equity, and national security and independence from very beginning in Zhongguancun. So in Zhongguancun’s post-Mao reinvention in the eighties and nineties, Silicon Valley was definitely an important symbol and model.

And I think also in comparisons to the Dulles Tech corridor, the defense and civil military fusion element is definitely there in Zhongguancun, and actually I would say became more prominent in the 2000s, and especially after 2008 global financial crisis when the Chinese state had come to see the limits of the export oriented department model based on low labor cost and at the expense of the environment.

So a rising consensus since then is to pursue a more balanced path of development, to put more emphasis on indigenous innovation and also social equity, and the so-called mass entrepreneurship innovation campaign that was launched in 2012 and peaked in 2017, and some other industry policy projects also well known here now, like Made in China 2095, and also the Thousand Talent projects.

They are all part of the same efforts, who I would say forged a new path of development for China.

[00:21:53] Grumbine: Of some concern as the tensions rise between the US and China. China has huge US dollar holdings because they do huge amounts of exports into the United States, so to untangle the two countries at this point would be quite Herculean because they both are so dependent on one another in various forms and for various reasons. Mao had a huge impact on modern China. And these reforms that are breaking China away from some of what Mao did and into this more capitalist mindset. You’re trying to fit into the global capital economy, but it’s so very different. What is it about China that is most different from what the US believes?

Because what I read in US publications tends to not measure up to anything I see when I travel. It doesn’t look anything like what US media says. What is it about China’s reemergence that Americans really don’t have a clue about?

[00:23:02] Zhang: Yeah,

[00:23:03] Grumbine: What do we get right and what do we get wrong?

[00:23:06] Zhang: this is a very good question and it’s a complex question.

[00:23:11] Grumbine: Sure.

[00:23:12] Zhang: I only have very complex answers, but I’ll try to be more precise here. So China indeed had made, I would say, a radical break with its socialist past in the post-Mao years, trying to reintegrate into the global capital system, which is led by the US. So in many ways, China had followed the footsteps of other Asian countries in forming the so-called flying goose structure of industrial production as a new destination of manufacturing outsourcing for American, Western European, Japanese, and later on Korean and Taiwanese firms. So just like each of the Asian Tigers and Dragons, China also has its own distinct trajectory. And the Post 2008 era also represents some sort of rupture, as I mentioned, in the visions that Chinese leaders project for the country. So in the book, I highlighted the role of the state and family, but also do not want to reduce them to simple variables or essential characteristics.

So instead, I try to, in the book, really offer a historically informed and ethnographically grounded case studies to show people the historical process of how this kind of hybrid you described the hybrid formation was created in various settings. So I mentioned the story of Zhongguancun or ZGC. Another case I focused on was about rural e-commerce.

So rural e-commerce in China has been one of the most successful examples I’ve seen around the world. Um, the Chinese state has been trying to promote rural e-commerce since early 2000. Over the years, many state infrastructure projects, building roads, bringing electricity and later broadband internet to the countryside certainly were at the basis of the expansion of rural e-commerce, but it was not until the late 2000s after the global financial crisis that we’ve witnessed a boom in rural e-commerce with private e-commerce companies like Alibaba, JingDong, and later on, many other Chinese tech companies like ByteDance and Kuaishou both are live streaming companies as the most important driver and backer of the boom.

So in the book I highlighted how many of the rural e-commerce business are family owned and have reinvented rural familiar business tradition for e-commerce and also the contradictions generated. So in the handicraft e-commerce village, I did extensive ethnographic research local handicraft making tradition actually dates back for thousands of years and have been incorporated into global production regime, at least from the republican years in the early decades of 20th century.

But this kind of gendered family production persisted during the socialist years, which is like what a lot of people have said there was a kind of a stall in the social sphere. Actually, a lot of that business persisted and also boomed in post-Mao China as part of the subcontracting network for western corporations like Walmart and Ikea.

And all this laid the foundation for the rural e-commerce boom, starting from the late 2000s. And the sudden decline in Western export market led to factory layoffs and closures forcing many migrant workers to return to the countryside. Meanwhile, a new generation of expanding middle class consumer in China also constitute a new market for e-commerce.

So the migrant returnees and sometimes even reverse urban to rural migrants emerged as a new generation of entrepreneurs in rural China. And this trend continued to expand in the past decades, initially from eastern coastal regions and now increasingly to central and western China. So if you want to distill something out of the various stories I told in the book that set China apart from many other countries in the world, I would say is probably the combination of large population and because of that a big market with an equally big pool of relatively well educated labor, and the leadership of a centralized but also locally coordinated government. Both of them have taken power through relatively radical socialist revolution transformation. So I think this makes China unique, distinct in a way.

It sets China apart from, for example, India who has a large population size, but it’s less centralized and many ways more fragmented and with larger social disparity. Also in comparison to other East Asian countries like Japan and South Korea, both of which had rapidly industrialized and are developmental states.

But China is more independent in terms of security and also the ongoing decoupling between the US and China, for better or worse, will I think make China more autonomous from the US in terms of technology and also after decades of market reform. China is also very different from former Soviet Union and is more pragmatic and less ideological in many ways.

So I think if the US is determined to treat China as a kind of existential threat, it is facing a foe of unprecedented scale. But alternatively, I think US could also choose to negotiate peaceful coexistence with China, but that would require a transformation of mindset on the part of US politicians.

[00:28:42] Grumbine: Yes. Yes, it would.

[00:28:57] Intermission: You are listening to Macro N Cheese, a podcast brought to you by Real Progressives, a nonprofit organization dedicated to teaching the masses about MMT or Modern Monetary Theory. Please help our efforts and become a monthly donor at PayPal or Patreon. Like and follow our pages on Facebook and YouTube and follow us on Periscope, Twitter, Twitch, Rokfin, and Instagram.

[00:29:48] Grumbine: Go out and check Joe Biden’s State of the Union address. The very first one before we had any of these problems overtly. That was his first chance to get in front of the American people at a state of the Union. And the first point of order was talking about the big foe, China. And this had been set up for a long time, even prior to any of the involvement with the current Russia-Ukraine conflict. We had already targeted Russia. The United States allowed its infrastructure to fall apart. It did not take care of its global hegemony, which was empire. It could have been a really good friend to people, but instead used very predatory approaches to building relationships on the global stage.

I see China right now reaching a hand out to people saying, let’s be friends and do business together. Relationships that will benefit us for the long term. The approach is less about let us break out our military and tell you how you’re gonna do it, versus working together. I see a lot of people desperate to get away from US involvement.

China has kept moving and it looks like they’re in a position to seize upon the US’ hubris. I’m curious what your thoughts are on how China is positioning itself on the global stage, and how much do you think it really cares specifically about the US? It seems like it’s gonna do what it wants regardless of what the US thinks or wants, which is refreshing.

[00:31:34] Zhang: Yeah, definitely. I think China is making some small, or big breakthroughs in terms of its international relations and building partnerships through business infrastructure building instead of the US approach, which focus more on the security alliances. So in that case, I think China is definitely building new ground and it definitely want to project itself as some sort of alternative models.

Whether it’s in Africa, in Latin America, in the Middle East, and even in Europe. So it’s trying to present itself as some sort of different force on the global stage. So I definitely agree with you, but I think this is an ongoing project that the US hegemony globally is still very powerful, very strong. And especially I think with US and European Union, but also some of the former Soviet Union, the ideological and beliefs and also racial connection there is still very strong.

So for China to be an alternative partner and player there still has a lot of work to do. But I definitely think China is trying to build on the global south solidarity historically with socialist tradition. Really tap into that with especially African and Latin American countries, and also Chinese neighbors in Southeast Asia and South Asia in a way. India and China bad relations has been problematic, but I think that’s also a area where China could really work on to rebuild some of the connections there with India. But I agree with you. The world is changing and sometimes it’s for me, accessing multiple sources of information, both Chinese and English, and I see a lot of the messages that I saw, I could see accessing Chinese couldn’t really get through here in English or in Western Anglophone media.

But also the other way is also true. So China would also block some kind of information.

Uh, So definitely I keep telling my students the world is changing. They have to really be prepared. And I think people should be informed of all these different dynamics, changing dynamics going on in the world.

[00:34:25] Grumbine: The second part of the title of your book, which I think is very important to this conversation. Entrepreneurship In The New Chinese Digital Economy. I bring that up because in the United States, there has been a huge effort by Republicans to basically block and ban TikTok. Which is Chinese digital media. And this is yet again another form, in my opinion, of saber rattling. In your studies and in your work and learning about Chinese entrepreneurship in this digital economy, what is the role of TikTok in that space?

[00:35:12] Zhang: So TikTok’s mother corporation is ByteDance. TikTok is foreign operation. So in China, the ByteDance Chinese version is called Douyin, which is a different platform in China and it’s a live streaming platform. And it pretty much established itself in the past decade. And by the way, ByteDance mother company was also a Zhongguancun company.

It merged. Yeah, so it’s a hybrid of the Zhongguancun offspring I would say. So I would say TikTok is one of the most successful tech companies with Chinese origin, or started up by Chinese entrepreneurs, but become really successful, not just in US and many different parts of the world. And more recently, I think TikTok, as you described, definitely getting caught up in the crossfire of US China decoupling.

And the entrepreneurs themselves and the company really have to figure out how they can navigate this increasingly wholesale geopolitical currents. And it has done many different things. They had to try to establish a separate data storage center location in the US and did a hearing in US Congress, a hearing that was widely reported and covered.

And I will say the Chinese counterpart of TikTok, Douyin has been very successful in China, continues to be so. And at the beginning I think it really succeeded based on its sophisticated algorithms. And also more recently it got into e-commerce. So it was actually, for example, in some of the villages that I studied at the very beginning, it was traditional e-commerce platforms.

And now they’re all doing live streaming. So they’re all selling Douyin Chinese TikTok. So it also kept reinventing itself, experimenting with new business models, and I think the e-commerce component was also introduced to TikTok in the US. So we’ll see what happens. I know TikTok was already being banned in a lot of government settings on university campuses, public universities, and the users, my students, young people in their early twenties were not very happy about it.

So in a way the US is really, some people will say, try to out-China China, right? But I would say this is not really in terms of business protectionism, it’s not an essentially Chinese characteristic. And in fact, I would think the so-called free market capitalism is a myth. So US has tried to accuse China of being protectionist.

I think this market capitalism is really a myth manufactured to serve the interests of some parties and nations. And now with the shift of policy in the US we are really entering a new era in which the myth of free market capitalism, along with its institutional infrastructures, like the WTO, like many others are actually collapsing.

So I think we are definitely entering a new era, which forces us to reflect on exactly what kind of system we live in.

[00:38:48] Grumbine: That’s powerful because one of the things that I focus a lot on is the International Monetary Fund, the IMF, which is an extension of US imperialism and US Empire as a whole. And one of the things that the IMF does to global south governments is say, we’re here to help you and we’ll give you these loans in US dollars.

But you’ve gotta end all nationalistic protections for your industries and you have to make things very comfortable for foreign direct investment for companies to come in here and do pretty much whatever they’d like to do, which is very different from what China does. China would never agree to such terms.

But these countries tend to be very poor. They don’t have value added production and advanced industries within, and they haven’t earned energy sovereignty and food sovereignty yet. So they’re highly dependent on external resources to survive. China’s an extremely wealthy country with a lot of real natural resources in the ground. Real value added products and services like high-end digital components and circuitry and next generation technology. So within the framework of the US who sees a way of getting into these places by forcing them to lower their standard of protection for domestic industry, how is China doing that?

Because they’re not afraid to protect. When we say nationalistic, at least the way it looks from everything that I’ve read, they do protect their intellectual property by forcing technology transfers and intellectual property transfers. The US doesn’t approach things that way. They’re highly protective. We’ve got 20 years of this patent, you can’t touch it, and then we’ll extend it another 20. Doesn’t matter whether or not everybody would live if we could give you this medicine. It’s patented. We’re not giving it to you. It feels like China has a little different approach and I was just curious if you could speak to that.

[00:41:03] Zhang: Yeah, so I think definitely I would say China in some ways are more autonomous and independent from the US. So energy is certainly one. China is relatively rich, but I wouldn’t say it’s in comparison to Russia, for example, in terms of oil. So it still has to import oil. But I think definitely China is a large agricultural nation, and food sovereignty, for example, has been a big factor increasingly in recent years in this mind of Chinese policy makers.

And as I already mentioned, in comparison to other developmental states in East Asia, for example, Japan and South Korea. Both are, I would say more, in terms of per capita GDP, richer than China. More wealthy than China, but also more incorporated into the US system in terms of security. So I think the military and security and independence there definitely helps China to be more assertive in a way. And I would say China also is a dynamic model in a way. In the early years, for example, in the eighties and nineties, when China just opened up, it went through a period very similar to the other nations in Southeast Asia. Rapid privatization, a state led model, but you’d see massive layoffs of state-owned business workers and all that.

At that time, I think China’s focus is more on attracting foreign investment, really sometimes in return with the negotiate technology transfer to China, so to spearhead its own development, technological development. For a long time it was not very successful, especially in the 1990s, and I think it was only in the mid 2000, the later years of the Wen Jiabao and Hu Jintao government that they started to put a lot more emphasis on indigenous innovation, and industrial policies. And it was also a time I would want to add that after decades of export oriented development, China now have the conditions, the surplus capital to reinvest them into all these new technologies.

So in the past it was more about kind of a primitive accumulation stage, and that’s when we started to witness rise of the new vision, as I mentioned in the book. But the 2008 Global Financial crisis and later on the, since 2017, the US sanctions on Huawei, ZTE, and now increasingly, almost all Chinese technologies.

Whether it’s linked to the military or not are being blocked or experiencing some sort of sanctions or challenges there. So I think that really convinced the Chinese leaders, policymakers and also the general public of the necessity, if not the urgency of pursuing more independent model. And as I said, China also to a greater extent than for example, Japan and also, Germany in a sense to have, have greater freedom and autonomy to do that because of the relative independence in terms of security and military, I would say, if not energy, in that case.

[00:44:48] Grumbine: I come from more of a socialist perspective. What I celebrate, China’s trying to undo. There’s an element here of seeing private property and what I would call an objectivist, Ayn Rand view of society that has seeped into almost every crevice of social order. My critique of the US based capitalism is far too few win and far too many lose, and the price of failure in the US frequently is death and poverty. And in China, what is your critique of this path forward? They’re choosing entrepreneurship in a country that has come from Mao. It’s a little different than where we’ve come from. This country started on the backs of indigenous people, but it also started with very wealthy landowners from the US putting a premium on private property and private ownership of things.

That has made it the very dog eat dog world from its inception. I’m curious as to what your critique is on the Chinese efforts. Do you see them forsaking the things that made them China in terms of family and basic provisioning of human needs, and from healthcare, entrepreneurship tends to speak to something very individualistic.

And that kind of winners and losers approach is baked into everything in American society, and there’s a rapid privatization, even now, desperation to privatize public parks. China didn’t have private property back in the day, and they’re moving to privatize now. What is your critique of where they’re heading in terms of being able to take care of their citizens versus what the Chinese culture of yesterday was?

[00:46:50] Zhang: Right. So I think

I argue in my book I would treat China as a kind of ongoing project. So I said that I actually find a lot of the discussion of China model useful, but instead I try to propose what I call a China paradigm following the late historian Arif Dirlik. So basically what he’s saying is that, what we should learn from China is not just to emulate it in terms of how it does things, but also to see how China articulate all these kind of global challenges or principles to its local reality.

To see the success, but also the problems, the limitations to look at people who succeed, but also to people in the way who are left out. So I would say still this is ongoing project. I don’t want to say anything too conclusive here, but I think the attempts in the past 10 decades or so to entrepreneurial development and social equity and innovation definitely generated mixed results.

So not to mention the decades of history of privatization, and certainly as we have all seen China make much progress in the past decade in forging a domestic internet industry hatching successful tech firms like TikTok. And it has also made a lot of progress in spearheading tech innovations in sectors like EV semiconductors and green technologies.

But despite recent talks of promoting common prosperity, we have yet to see any concrete results. So if anything, what I find interesting is that the Chinese party state has been specifically opposed to the creation of what itself calls a western style welfare state. Citing the reason partially is that China is still a developing country with a large and aging population. And I suspect the other reason is also because of the mixed legacies and mixed implications of Maoist class radicalism for China. So the Chinese policymakers policies would also be very wary of the radical aspect of that. So I think China is, in general, being very pragmatic, promoting grassroots entrepreneurship and digital economy is, especially in the countryside, has been one way because of that, to redress inequalities.

As I argue in the book, entrepreneurialized social equity also has its own problems and may not sometimes produce results intended. So the pandemic certainly hasn’t made things easier for China. Entrepreneurialism does not hold the same level of appeal for younger generation of Chinese seeking more security in government jobs now.

The reality of high unemployment rate has recently further facilitated digital self-employment, and also the trend of returning to the countryside to start an alternative career, often as entrepreneur. But more recently, we also see experiments with, for example, innovative or cooperative ownership structures in the villages in southeast China.

And also efforts to cap the earning of practitioners in the financial industry, for example. And also there are reforms in pension and healthcare and also property taxes are being debated and some of them waiting to be unrolled. So despite my critiques, I would also like to keep an open mind and see where the country is heading toward in the next few years.

That’s why I’m very excited about my upcoming summer trip to China after a few years of pandemic induced isolation here in the US. So my feeling is that China is still a developing country. So in terms of per capita GDP, it’s 1/6 or 1/7 of the US. That definitely is not your Nordic socialist democracy model there, and there is still a long way for China to go in that regard.

So I understand some of its reservation about radical redistribution, and especially I would say that US sanctions and also decoupling is not definitely making the redistributive aspect easier for China because it has to direct a lot more money into strategic industries and also military security for that reason.

So I would say that China still face a lot of challenges ahead. That’s not to say that Chinese leaders have their own visions and has been very creative, if not also pragmatic, about how they are going to achieve that.

[00:51:44] Grumbine: If you were to tell somebody, come read my book, what do you think is the key message that people need to hear?

[00:51:52] Zhang: So we talked previously about how the US sees China versus how it really is. I think that’s partially why I wrote this book. So I want to give the English speaking readers more kind of nuanced, complicated picture of China. And I would specifically want to identify one aspect of how US sees China from the picture Chinese like to understand themselves differently. So the US tends to view China through, I think, the communist lens of authoritarianism versus democracy and filters through that lens.

Chinese people are either suppressed by the CCP or brainwashed by it. I think that’s not how the majority of Chinese people understand their relationship with the party state, and that’s also very simplified understanding of the Chinese state. So in the book, I try to paint a more complex picture of the Chinese state.

For example, I talk about competing demands of the Chinese central state of economic development, social equity, and national security, as well as the discrepancies between central and local states, which in many ways are not too different from the US government. And I also talk about the genuine feelings behind Chinese nationalism as rooted in China’s socialist anti-imperialist history.

Which are reinforced by recent American sanctions and containment of China. So assumption behind the US sanction of Chinese tech firms is that you cannot produce your own indigenous version of technology without us. I think this has actually even more strongly incentivized the Chinese to prove to the US that they can, and in a way US has, I think, placed a bet there.

And if it loses, it has to get ready to face up to a China that is not just technologically more advanced, but also more independent of the US. And in a lot of ways, because of what happened recently, less friendly towards the US. So I think that’s a general message, and I hope this book could provide a kind of alternative understanding of exactly what’s going on in China and how Chinese people, Chinese government is working, and Chinese people perceive their government and US China relations and all that.

[00:54:21] Grumbine: Fantastic. Lin this was amazing. I’m gonna probably reread your book with a different set of eyes now that I’ve talked to you and try to incorporate more of this into my understanding, because it’s real easy to romanticize things. It’s even more important to know the truth, and you’ve taken a great deal of effort to tell that story.

And the story is yet to be finished. It’s still writing itself.

[00:54:48] Zhang: Yeah.

[00:54:49] Grumbine: Where can we find more of your work?

[00:54:52] Zhang: So you can definitely go to my website. So if you search for my name and my university affiliation, you will find my website where I have most of my published articles and some of my interviews podcasts I’ve done in PDFs or with link there. So definitely I think go to my website.

[00:55:16] Grumbine: Okay. Well thank you so much for this time. I appreciate it. Again, the book we’re talking about is The Labor of Reinvention: Entrepreneurship in the New Chinese Digital Economy by Lin Zhang, Z H A N G, and I hope that you will check it out. And with that, Lin thank you once again for joining me today.

[00:55:36] Zhang: Thank you so much, Steven. Thank you for the opportunity to share.

[00:55:40] Grumbine: Absolutely. So this is the Macro N Cheese podcast. We are a nonprofit. We get funded by your donation, so please by all means, if you enjoy the work we do, if you think there’s value to what we’re doing, please consider becoming a monthly donor. We would love to have your support. So by all means, check us out realprogressives.org.

This was another great episode of Macro N Cheese and on behalf of my guest, Lin Zhang and myself, we are outta here.

[00:56:18] End Credits: Macro N Cheese is produced by Andy Kennedy. Descriptive writing by Virginia Cotts and promotional artwork by Andy Kennedy. Macro N Cheese is publicly funded by our Real Progressives Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives.