China Makes, The World Takes

A look inside the world’s manufacturing center shows that America should welcome China’s rise—for now.
How it works: The view from the Four Points

Each time I went to breakfast at the Sheraton Four Points in Shenzhen, I felt as if I were in a movie. I had a specific scene in mind: the moments aboard a U.S. aircraft carrier in a typical World War II movie when the flight crews gather in the wardroom to discuss the mission on which they’re about to embark.

The morning crowd at the Four Points has that same sort of anticipatory buzz. Shenzhen, which is the part of China immediately north of Hong Kong and its “New Territories,” did not exist as a city as recently as Ronald Reagan’s time in the White House. It was a fishing town of 70,000 to 80,000 people, practically unnoticeable by Chinese standards. Today’s other big coastal manufacturing centers, such as Xiamen, Guangzhou, Hangzhou, and Shanghai, were for centuries consequential Chinese cities. Not Shenzhen. Its population has grown at least a hundredfold in the past 25 years—rather than merely tripled or quadrupled, as in other cities. It is roughly as populous as New York, like many Chinese cities I keep coming across. Shenzhen has scores of skyscrapers and many, many hundreds of factories.

The story of Shenzhen’s boom is in a sense the first chapter in modern China’s industrialization. “During the founding period, Shenzhen people were bold and resolute in smashing the trammels of the old ideas,” says the English version of the city’s history, as recounted in Shenzhen’s municipal museum in an odd, modern-Chinese combination of Maoist bombast and supercapitalist perspective. “With the market-oriented reforms as the breakthrough point, they shook off the yoke of the planned economy, and gradually built up new management systems.”

What all this refers to is the establishment, in the late summer of 1980, of Shenzhen as a “special economic zone,” where few limits or controls would apply and businesses from around the world would be invited to set up shop. Shenzhen was attractive as an experimental locale, not just because it was so close to Hong Kong, with its efficient harbor and airport, but also because it was so far from Beijing. If the experiment went wrong, the consequences could be more easily contained in this southern extremity of the country. Nearly every rule that might restrict business development was changed or removed in Shenzhen. Several free-trade processing zones were established, where materials and machinery coming in and exports going out would be exempt from the usual duties or taxes.

Modern Shenzhen has traits that Americans would associate with a booming Sun Belt city—transient, rough, unmannered, full of opportunity—and that characterized Manchester, Detroit, Chicago, Los Angeles at their times of fastest growth. Newspapers that cover Shenzhen are full of stories of drugs, crime, and vice in the most crowded tenement areas, where walls and sidewalks are covered with spray-painted phone numbers. Some are for prostitutes, but many are for vendors who can provide fake documents—health certificates, diplomas, residence credentials—for those seeking work.

The Sheraton Four Points is part of the process that keeps Shenzhen growing. It is one of the places foreigners go when they are ready to buy from China.

The foreigners in their 30s through 50s who come to Shanghai are often financiers, consultants, or lawyers. They tend to be lean, with good suits and haircuts. Those in Beijing are often diplomats, academics, or from foundations or NGOs. They look a little less polished. The scene in and around Shenzhen is different. It is an international group—Americans, Taiwanese, Europeans, Japanese—of a single class. Virtually all of them are designers, engineers, or buyers from foreign companies who have come to meet with Chinese factory owners. The Americans in the group tend to be beefier than the Shanghai-Beijing crowd, and more Midwestern-looking. Some wear company shirts or nylon jackets with their company’s logo on the pocket.

When the Four Points restaurant opens at 6:30 in the morning, foreigners begin assembling for breakfast, the meal when people most crave their native cuisine. It is laid out for all comers on a huge buffet: for the Europeans, sliced meats and cheese, good breads, strong coffee, muesli and yogurt. For the Japanese, pickles, sushi, cold noodles, smoked eel over rice. For the Taiwanese and other Chinese, steamed buns, dim sum, hot congee cereal. For the Americans, the makings of a Denny’s-style “Slam” breakfast: thick waffles, eggs, hash-brown potatoes, sausage and bacon and ham. My wife finally accused me of spending so much time in Shenzhen just for the breakfasts.

The room is noisy, as people discuss their plans for the day or meet the Chinese factory officials who will conduct them on their tours. The room empties dramatically by nine o’clock, as people go out to meet their drivers and vans, and the day’s factory touring and contract signing begin. As best I could tell from chatting with fellow guests, in all my trips to the Four Points, I was the only person there not on a buying mission.

Nearly every morning one man, a 41-year-old Irish bachelor, sits at the same table at the Four Points. Very late in the evening, he is at that table for dinner too. The table is near the entrance, from which the rest of the room can be surveyed. On a typical night, the company he owns will have 10 to 15 rooms booked at the hotel, for foreign visitors coming to do business with him. Often a few will join him for dinner. When the waiters see this man coming, they bring the plain Western food—meat, potatoes—they know he’s interested in. “Do you have the same thing every night?” I asked him when I saw the waiters’ reflexive response to his arrival. “I didn’t come here for the food,” he replied.

This man has lived in an apartment at the Four Points for the last two years, and in other hotels around Shenzhen for the previous eight. He makes a point of telling people that he does not speak Chinese—most business visitors who try, he says, have to work so hard to cope with the language that they forget what they’re negotiating about. But at useful points in meetings he drops in Chinese colloquialisms so that people must wonder whether in fact he has understood everything that has been said. (He tells me he hasn’t.) His name is Liam Casey, and I have come to think of him as “Mr. China.”

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.

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