China’s Next Leap Forward: From Comrades to Consumers
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China’s Next Leap Forward: From Comrades to Consumers

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On June 20 of last year, two and a half months after disgraced former Chongqing Communist Party Chief Bo Xilai was dropped from the Politburo, another member of China’s elite 25-man decision-making body was all smiles in the southern city of Dongguan.

During a tour of the bustling factory city, one of the most overt symbols of China’s experiments with capitalism thus far, the then Guangdong province party chief Wang Yang waxed lyrical about his plans to tackle the province’s spiraling crime and economic malaise.

On the front page of the local newspaper the following day, Wang appeared opposite a table lined with bundles of 100-yuan bills, drugs, a handgun and carefully aligned machetes – the unsavory by-products of Guangdong’s recent rush towards prosperity. “Wang Yang strongly supports the ‘three crackdowns, two developments’,” read the headline in the Dongguan Times.

Despite a new campaign produced by the Discovery Channel in February, designed to rehabilitate the city’s unsavory image, Dongguan remains a by-word for crime, vice and everything bad associated with China’s manufacturing-led boom.

With little to offer except hordes of underpaid workers – the city’s population ballooned from 1.8 million in the 1980s to more than eight million today – Dongguan finds itself bankrupt, reflecting a wider troubling trend. China’s local government debt nationwide stood at 10.7 trillion yuan, about 27 percent of GDP. Meanwhile, many overseas investors are leaving for new, less expensive pastures.

Chen Sheng Fei, a mother of two who moved to Dongguan from southeastern Hunan province in 2007, left her job at a furniture factory in early March. She told The Diplomat that finding a new, decent employer is difficult.

“There are factories here that break the law, companies which never mention things like social welfare,” she said. “Too many companies here are bad.”

Despite its developmental woes, Wang remains the leading advocate of what has come to be known as the “Guangdong model” of economic liberalization, based on high growth and private enterprise. His recent career has been viewed as a litmus test of just how far the new generation of Chinese leaders is prepared to go with much-needed economic reforms.

Whereas Bo, a leading proponent of the neo-socialist “Chongqing model”, focused on social safety nets and state-owned enterprises, was disgraced and removed from office in the months leading up to the recent power transition, freewheeling Wang was made third vice-premier. His rise has only gone so far, however. Wang was not elevated to the all-powerful Politburo Standing Committee as many expected. According to some analysts, Wang’s limited rise was a sign that his radical agenda of major structural economic reforms remains in vogue in Beijing – though only to a degree.

As the latest generation of Chinese leaders begins its decade-long rule, speculation has focused on just how far Beijing may go in overhauling the country’s cautiously capitalist economic model. Despite initial grumblings that the leadership shake-up was not all that radical, there are growing signs that wholesale Wang-esque changes – including more focus on free markets, quality enterprises over quantity and greater worker wellbeing – will form the backbone of China’s blueprint for another economic leap forward.

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