On the Road: A View from the Chinese Interior

Robert A. Kapp

American businesspeople, journalists, and politicians accustomed to running up and down the East China coast, from glistening boardroom to humming twenty-first-century factory floor to the front end of the airplane, have often overlooked developments taking place further inland.  As China careers down the path of marketization and rapid GDP growth, however, the growing divergence of experiences--between East China and the central and western regions, between large cities and the rural hinterland, between those in the dynamic sectors of the Chinese economy and those left behind--has drawn the attention of policymakers and social critics within and outside the People's Republic.

Earlier this year, after concluding a speaking engagement in Tianjin (whose "Economic and Technological Development Area" houses advanced production facilities for some of the world's most sophisticated companies), I ventured westward to Sichuan, China's most populous province, home to 130 million people.  In the provincial capital of Chengdu, I passed through a new airport that compared splendidly with the new airports of the coastal cities. I marveled at the extent of the urban development that has swept over this inland provincial capital since the days, 15 or 20 years ago, when Sichuan was a regular stop on my China itineraries. I visited a proud business owner whose brilliantly lit five-story emporium sold only high-end furniture and accessories made in Spain. Then I hit the road to see things I really hadn't seen before.

This was no country road.  Heading north from Chengdu to Mianyang, I found myself traveling on a gleaming, four-to-six-lane superhighway, perfectly graded and paved. When we hit 170 kilometers per hour, my eyes widened not just out of fear, but out of a realization that, until a year or two ago, the Chengdu to Mianyang trip was a matter of endless hours and frustrations. Mianyang itself, with broad boulevards, beautifully tended public spaces, the massive Changhong Electric Company television production facility rolling block after block through town, and a booming downtown commercial core, has been firmly "launched", no matter how far from the coast it lies.

On the other side of Mianyang, the superhighway ended, and we exited onto another road--National Highway 108, to be exact--which connects the great southwest (as far as Yunnan) to the northwest and ultimately to Beijing itself. Kilometer posts showed numbers in the 2,000+ range, the distance to the national capital.  We entered the foothills of the Qinling, the great hill barrier that traditionally isolated the densely settled Sichuan Basin from the old imperial capital of Chang'an to the north (now the northwestern metropolis of Xi'an), and, indeed, from all of North China. We seemed to step back in time.  The road was pitted and slow, overwhelmed with heavy trucks moving cargoes in and out of Sichuan on the only cargo route through the mountains. Country buses lurched and swayed carrying peasants and traders from town to town, from county seat to outlying market villages, in this inaccessible region. Road maintenance was underway mile after mile--by hand. Sunburned men and women shoveled piles of river rock out onto the highway, sprinkled shovels full of asphalt over them, and waited for the passing traffic to pack the surface of this road which could hardly be called a "highway." When overloaded trucks ruptured their springs, dozens of vehicles waited (with a good-natured patience utterly unknown in Washington, DC, I might add) to inch by the impasse. I was reminded of the first thing that used to be said about Sichuan in the last century: "Jiaotong bubian"--"Transportation is difficult."

Roadside signs revealed that we had entered a region of poverty and announced programs for local government assistance to the impoverished. Aside from our highway, roads were scarce; the hills, bigger than the Appalachians but smaller than the Rockies, stretched out in layers to the horizon.

We passed through the great Jianmenguan, a breathtaking narrow pass through towering vertical rock faces. We were on "The Road to Shu" (as Sichuan was anciently called), formerly a stone track no wider than a single person, immortalized in Tang poetry as "more difficult than ascending to Heaven itself." Steam poured from the engines of overheated trucks on their way up to the pass and out of Sichuan. Then we headed downward, with a racing river just below the side of the road. Now steam jetted from the hissing brakes of the heavily laden trucks struggling to navigate the twists and potholes on the steep descent.

By the end of the day, we had reached our destination: Guangyuan County Seat, essentially the last stop in Sichuan. The borders of Shaanxi Province and of Gansu Province, the gateway to Central Asia, lay a few miles further up the road.  In bustling Guangyuan, I learned from the mayor and his colleagues that I was the second American visitor to Guangyuan in memory.
Guangyuan, however, was no sleepy backwater.  Urban construction had recently blossomed, much of it funded by investors from the uniquely entrepreneurial city of Wenzhou in the East China province of Zhejiang.  There was now a new airport, with daily flights to key Chinese cities and connections through Xi'an and Chengdu to destinations all around the globe.  Locals were excited about China's World Trade Organization (WTO) membership and hoped that it would bring opportunity to smaller and more distant communities like Guangyuan.  Wahaha bottled water (the traveler's friend in the scorching Chinese summer) had set up a bottling plant in none other than Guangyuan itself--living proof of a bright future!

But, most staggeringly, I learned that the superhighway that had taken me from Chengdu to Mianyang in an hour and a half would be completed all the way to Guangyuan by year's end: by 2003, Chengdu would be three hours' drive from Guangyuan County Seat. And the mountain communities through which we had labored would face a different future.

Behind all of this simmering change lie two ineluctable realities and at least the skeleton of a broad policy approach to the future of Chinese society. The first harsh reality is that the farm economy has far more people in it than can be efficiently deployed in agriculture, especially as, under the WTO, the agricultural economy of China must face the inflow of inexpensive high quality agricultural products from the world market. The second harsh reality is that the pattern of Chinese economic growth over the past twenty years has created a self-exacerbating discrepancy between the privileged and dynamic East Coast corridor and the struggling western regions of the country. The stronger the East becomes, the greater its power to attract investment and build capacity, and the weaker the power of the interior to do the same.

The skeleton of the regime's policy response to this is the vision of transforming hundreds of millions of underemployed and impoverished rural dwellers into workers--not in the state-owned behemoth heavy industries of the past, but in some sort of dimly-perceived new urban environment constructed within the until-now rural zones themselves. Exactly what these new workers will do -- what they will make, what services they will provide -- is the subject of intense discussion, and the entire enterprise, as a massive social engineering project by government, has not yet really been launched.

What the regime has launched, both with rhetoric and with infrastructure investment, is the "Great Development of the West", as seen in the shiny new freeways snaking across the underdeveloped regions of the country. While some have criticized this as budget-busting temporary make-work gimmickry, it is fair to speculate that no systematic economic development of languishing and backward regions could be hoped for if the basic sinews of a modern economy are not in place: transportation, telecommunications, energy. Time will tell, but my instinct is that "roads to nowhere", in China as in the United States, may turn "nowhere" into "somewhere" more effectively than skeptics might imagine.

For the time being, though, we have to ask how fully the dynamic modern sector of the Chinese economy can progress if the rural sector remains in deep economic distress. The rural economy faces real problems: declining crop prices; rising taxes and fees imposed on farmers by parasitic local-level government bodies filled with cousins and in-laws "eating imperial grain" (as they say about those paid with taxes and fees extracted from the peasants); rampant usurious lending to these peasants by bottom-rung cadres struggling to secure the money that must be sent up the administrative chain to meet tax and fee obligations; outmigration of millions of rural inhabitants unable to survive on the land and hoping for better times in the neon-lit cities and humming factories of the coastal enclaves; the difficulty of implementing centrally directed economic, political, and social reform in the face of entrenched holders of local privilege; and the potential power of modern exposé journalism.

A short trip off the beaten path, combined with some sobering reading of recent reports on rural problems, was a reminder that much remains unsolved, and these challenges will continue to bedevil the next generation of Chinese leaders. What happens in Beijing, Shanghai, and the other major coastal centers is critical to the future of the Sino-American relationship.  Even so, I have a hunch we all ought to be thinking about what is happening outside of town.

Robert A. Kapp is the president of the U.S.-China Business Council (http://www.uschina.org). This essay is adapted from his president's letter that appeared in a recent issue of the China Business Review.