Thirty years ago this week, the 19-year-old daughter of workers at a state umbrella factory in an obscure Chinese city did something so daring that she seriously feared being imprisoned or much worse. In a hardline communist country, where private enterprise was a heinous criminal offence, Zhang Huamei applied to Communist Party officials in Wenzhou, 300 miles from Shanghai, for permission to run her own business.
A few years earlier, such a reckless request would have seen her branded a “capitalist roader” and earned a possibly lethal visit from the “Red Guards” of Mao Zedong’s Cultural Revolution. But Zhang, who had already been selling trinkets illegally from a folding table for 18 months, was, in fact, ahead of the political game being played out 1,300 miles away in Beijing in the wake of Mao’s death in 1976. The reformist new leader, Deng Xiaoping, was already unravelling the nightmare caused by 30 years of Mao’s communism, which had left China starving and in rags. Deng was indicating by sundry nods, winks and gnomic statements that private business, semantically repackaged for Party geeks as “the household responsibility system”, might be OK for China after all; Deng was no ideologue, having himself been persecuted during the Cultural Revolution.
In isolated Wenzhou, a city then reachable only by days of driving or a long haul by ferry, people were in a forlorn state. They felt cut off from the rest of China, and they remembered capitalism quite fondly; until Mao, the city had been a minor international port – Wenchow – with British missionaries and a UK Customs post. So towards the end of 1979, the Wenzhou Revolutionary Committee went out on a limb and issued some street traders with business operator’s permits. Indeed, they encouraged their enterprise and drafted in an elderly calligrapher to design and hand-paint a certificate for applicants.
Zhang Huamei got the very first, backdated to the day of her application, November 30, 1979, and numbered 10101 – the Committee’s bureaucratic way of saying “00001” without looking too small-time. So it was, almost exactly 30 years on from Mao’s October 1949 revolution, that Zhang Huamei found herself trading legally as communist China’s official entrepreneur Number One.
A further 30 years on, Zhang has moved on from her folding table to become a millionaire in, of all things, the button business. She sells buttons worldwide. It is likely that many of the clothes you are wearing are fastened with buttons supplied by her Huamei Garment Accessory Company.
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Zhang Huamei is now an elegant 48-year-old, her voice husky from those early years of street hawking and bargaining. She still seems bemused by her fame within China, having only been “discovered” in recent times by a local TV researcher, but was anxious to be helpful to the first foreign reporter to see her.
Chinese people are still not used to describing their feelings to the media, but Zhang soon opened up. To trade “under the radar” in the Seventies was not for the thin-skinned, she explained. “My classmates were ashamed of me for starting my own business. They would turn their heads away when passing my house and pretend not to know me.”
Yet the thrill of making her first sale gripped her. “The first thing I sold was a toy watch,” she says. “It was a sunny morning in May, 1978. I bought it for 0.15 yuan and sold it for 0.20. I was very, very excited to make a profit. But I was also very nervous, very afraid that local government staff would come to stop it.”
Still, she expanded, into whatever she could get on ferry trips to Shanghai: needles, thread, elastic and, of course, buttons, and was soon making 2 yuan a day profit – three times the state wage. So when a Party official came to the tumbledown family home, she feared he was from the dreaded “speculation crackdown office”. She blurted out her story, that she was the youngest of eight and had to support her ageing parents.
His insistence that it was OK because of the coming reforms, and that all she needed to do was to fill out a form and supply two photos, disarmed her. “I was still hesitant. If I registered, what if the policy changed later and they demanded to ‘cut off the tail of capitalism’? On the other hand, I was so eager to be accepted by society. Becoming legal would be a great relief.”
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Her father, who had run a small business before Mao, encouraged her, saying that the whole economy would one day be like this. It seemed unlikely, but she went ahead and applied. Today, Zhang lives comfortably with her husband, Sing Guo Yu, who works in the business, and their son, Shang Jing, who is
25 and owns a nightclub. The parents are trying unsuccessfully to get him interested in buttons, but suspect he will only see the benefits once he gets married.
Nobody in the family has travelled outside China, but they are thinking of going to Paris one day. “As we have accumulated some wealth now, we may relax a little and enjoy life,” she says. And, no, the business is seeing no sign at all of recession: “I’m confident that everyone needs to wear clothes, and there’s enough business in China to keep us busy if overseas trade reduces.”
In the time it has taken for Zhang Huamei to rise from street trader to capitalist with a house and an Audi, China has, of course, become an economic powerhouse second only to the United States, the origin of practically every manufactured thing the world uses and with the greater part of the world’s money stashed away in its Treasury.
But at the same time, with its head start in business, Wenzhou, which is roughly analogous to somewhere like Barrow-in-Furness, has become probably China’s wealthiest – and certainly its most eye-poppingly extravagant – city. Behind Zhang, 1,843 more Wenzhou traders got business permits in 1980, followed by tens of millions across China, all mesmerised by what they still call the “Wenzhou business model” – aka, “socialism with Chinese characteristics”, aka, making money by the shedload, free of state constraints, while remaining nominally communist.
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While being sniggered at for their flashy ways and their strange form of Chinese, Wenzhou businesspeople are admired, feared and often disliked for their towering acumen. Business books are published on how to emulate them. Pilgrims come to meet Zhang Huamei, to see her iconic certificate and often to set up their own folding table in the hope of being touched by Wenzhou luck.
And the Wenzhou story furnishes us with a compellingly neat symmetry in the history of the 60 years of communism that China celebrated so showily this year; for with the 30th anniversary of Zhang Huamei’s certificate, China will have been socialist for precisely 30 years and capitalist for precisely 30 more.
Few Chinese outsiders and fewer foreigners travel to Wenzhou. Since I returned from two trips there, many Chinese friends have asked what it’s like, this once obscure city which only recently got a railway and an airport – and what could be the secret of its success.
With little by way of natural resources, Wenzhou’s eminence is mostly down to what might be called a crap rush. With more than 90 per cent of the 7 million population beavering away in the private sector – a far greater proportion than anywhere in Britain – the Wenzhouese specialise in the insignificant everyday items we all need, recession or not. Most of the world’s buttons are made in Wenzhou; most of its cheap lighters; half its cheap shoes; all of its leather-look plastic; most of its zips; all of its bra fixings; plus trillions of boring-but-important valves, brackets and widgets.
Funded by this flood tide of necessary junk, Wenzhou has developed other income streams, too, as it hones its commercial skills. Some
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two million Wenzhouese have moved abroad, and are especially big in the restaurant business in countries like France, Italy, Russia and Brazil, where Hong Kong Chinese haven’t been as active as in Britain. The lavish Wenzhou Museum hosts a weird tableau showing untravelled Wenzhouese what a Western Chinese restaurant looks like; the European family featured tucking in to the sweet and sour look worryingly like the Munsters.
Wenzhou businessmen are also becoming acquisitive overseas: they have bought minor TV channels globally, were bidding earlier this year for Pierre Cardin and tried to buy Michael Jackson’s Neverland ranch to ship to Wenzhou. The Wenzhouese are even, extraordinary to say, now looking to manufacture abroad to cut down on Chinese labour costs; one market for outsourcing is Vietnam, where labour is a third cheaper. Coming up soon, they say, as Wenzhou’s out-the-back workshop: North Korea.
In this and countless other ways, Wenzhou has been something of a Petri dish for observing the sometimes bizarre side effects that going from zero to hyper-capitalism in 30 years can have on a largely peasant – and recently deprived – community. If the rest of China follows suit, as it surely will, it could be interesting, to say the least.
For while there is still clearly a big, mostly migrant, working class in Wenzhou, manning the factories and bicycle rickshaws, the city’s enormous middle class has become so rich that getting rid of their piles of red 100 yuan (£9) notes, with Chairman Mao still incongruously on each, has become quite a problem. “There is,” one rare Westerner living in Wenzhou, told me, “almost a sense of the decline and fall of the Roman Empire. It’s getting unseemly.”
The plutocratic uniqueness of Wenzhou becomes evident the moment you arrive at the glitzy new airport. It is impolite to meet a Chinese person without buying a small gift, so at the airport shop, I bought a packet of tea for Zhang Huamei. It cost £40. A minuscule cappuccino while waiting for my interpreter was £5 – this in an airport with no foreigners to rip off and a country where lunch can normally be had for 50p.
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The airport car park was filled with gleaming new luxury saloons. Cars, it was soon evident, are a big part of the Wenzhou story. My interpreter, a traffic cop’s daughter recently back from university in Dundee, had a brand new luxury Buick she manifestly couldn’t handle. It was a £35,000 pre-wedding present from her parents.
On the new highway into the riverside city (15mph in the middle lane) we could have been in Orange County – except that there are more luxury cars in Wenzhou. BMW 7 series and top of the range Mercedes, Audis and Lexus are humdrum. Bentleys, Maybachs, Porsches, Maseratis and Hummers are everywhere. Personalised number plates, unknown even in ostentatious Shanghai, are the latest big automotive thing. A Mr Chen in the shoe materials business paid £160,000 at auction not long ago, the local press reported, for the lucky number 88888 to go on his BMW.
There’s a limit to how impressive a car can be, so Wenzhou businessmen are now turning to private aircraft. At a recent exhibition, Wenzhou people bought 22, from Cessnas to helicopters to a £6 million Dassault jet.
The organiser told China Daily that Wenzhou’s entrepreneurs “paid little attention to the expense, and were only concerned about how quickly they could get their new planes into the air”.
Property is a growing Wenzhou obsession. The city invests across China and, increasingly, the world. House prices are the highest in China and businessmen’s wives love to spend time dabbling in buy-to-let. However, the Wenzhou wives have saturated the local market with gleaming, 40-storey apartment towers, so are now reportedly buying up residential blocks in Paris. They have a particular thing about France here, which also dictates that there are more than 100 fine wine stores. The irony is that Chinese people don’t much like wine. Millions of bottles of Margaux, Château Lafite and that ilk circulate in Wenzhou as gifts – or are knocked back by the litre, made palatable with sugar or green tea.
Another great way for Wenzhou people to show off their wealth is by hosting extravagant weddings and paying for young couples to honeymoon in the Maldives – as soon as the mandatory pictures have been taken of bride and groom draped over their, or somebody’s, upmarket car. Even though Wenzhou has few visitors, the Shangri La hotel chain has just opened a new £80 million five-star property, mostly for weddings. It has a ballroom twice the size of the Dorchester Hotel’s in London, with space for 2,000 guests on tables of 10 – typical spend per table, £1,500. The Shangri La has also become the place to bring the kids for weekend brunch, at £25 – a good weekly wage in many parts of China – per head.
The mall is as central to Wenzhou life as it is in California. Malls are stuffed with the finest luxury brands, never cheap Chinese fakes, and are as grandiose as possible. At the entrance to one, the European Lifestyle Mall, there is a scaled-down stone replica of the Arc de Triomphe. Another mall, Times Square, recently hosted a pop-up stand selling £1 million helicopters. Most Wenzhou malls have a concession for Vertu deluxe mobile phones, made in Surrey and selling for up to £30,000 each.
Furniture is big business, but there is no interest in antiques; old stuff is strictly for throwing out, with stores stacked instead with gaudy French and Italian repro. At the ostentatious Louvre furniture store, customers routinely spend £1 million, often just waving a hand and buying entire room displays.
When Wenzhou people have run out of material extravagances, they turn, of course, to giving their children the best start in life. For some years, the very richest Wenzhou people have been sending their children to British public schools and on to Oxbridge. This, apparently, has led to a generation, albeit a handful, of twentysomethings who virtually call their parents mater and pater, while the parents themselves are barely able to speak Mandarin Chinese, preferring the local dialect.
The more everyday elite, meanwhile, have seized on a new way to get ahead – by sending their children to a fully-fledged Canadian high school in Wenzhou, Canadian Secondary Wenzhou No 22, which is part of the school system 6,000 miles away in Vancouver.
At School No 22, 185 teenagers are taught in English by Canadian teachers and rigorously follow the British Columbia syllabus – rated as one of the world’s finest, along with Norway’s and Singapore’s. The first graduates from the school have recently started in top-end universities in Canada and, with faultless English and the best of North America hardwired into them, will hardly be able to avoid becoming a super-elite.
Although tax dodging is an Italian-level art in Wenzhou, and those in public service fret about the tax take being a fraction of what it should be, public servants and industrial workers are well paid. When I asked around to visit a typical Wenzhou home, I was taken to the spacious and modern £500,000 apartment of the Jiang family, and was surprised to find the husband works in HR at the city council, the wife in the environmental bureau.
Whatever the levels of tax gathering, the city finds plenty of money for public buildings. Wenzhou’s huge main square boasts showpieces on a scale far beyond an average provincial city’s ambition, including a just-about-to-open opera house, concert hall and theatre designed by the Uruguayan architect Carlos Ott, who did the Op?ra de la Bastille in Paris. It’s a shade, but only a shade, smaller than Sydney Opera House, and not dissimilar in design.
Another startling development in Wenzhou’s passionate romance with cash has been the adoption of Christianity on an industrial scale. In the 30 years since Zhang Huamei applied for her business permit, an estimated million-plus people – a fifth of the population – have become devout Protestants, worshipping in 1,200 churches, mostly new and expensive, topped with huge red crosses. An academic, Nanlai Cao, who has studied Christianity in what is now known to some as “China’s Jerusalem”, has discovered that the new faithful are nouveau riche private business owners – Boss Christians, he calls them. “They promote the production and management of church development in entrepreneurial terms,” says Nanlai. “A competition has developed among Christian communities to build the most costly church, the most beautiful church – even the tallest cross.”
Christianity has not yet rated a display in the Wenzhou Museum, and there is no corner – yet – devoted to Zhang Huamei, the button queen who started it all. But Zhang’s legacy is proudly promoted in other ways. “To the natives of Wenzhou,” reads a placard, “the policy of reform and opening up was like the thunder for the waking pupas underground? thereupon the natives of Wenzhou burst forth their immeasurable creative power with the great courage of being the pioneers in the world.”
There was something else missing from the Wenzhou “Hall of History”: a single photo, artefact or mention of the Fifties, Sixties or Seventies. Here, in the birthplace of Chinese capitalism, the Mao era is a big ahem, a nervous breakdown. Except that outside, in the luxury malls and on the broad boulevards, the people of Wenzhou, as they accumulate and spend, spend, spend, have not yet forgotten communism. They are even, incredible to report, beginning to make jokes at its expense.
Outside the Time Square Mall early one evening, a Mercedes swishes up and parks randomly on the pavement, as the wealthy all do in China. The Merc’s owner, in the standard Wenzhou uniform of expensive Italian leisurewear, swaggers off to dispose of a pile of 100 yuan notes. It is only as he has left that I spot his personalised number plate. It is COM 1111.
A big “Up yours”, he would appear to be saying, to all that.