Old Wu was becoming a legend in China. According to officially sanctioned biographies, such as the modestly titled
The party loyalist proved himself a pragmatist, a risk taker, and a rule breaker.5 While the rest of the country was turning its back on capitalism during the Cultural Revolution, Wu secretly established a hardware factory. To conceal its existence from visiting officials, it was built in a swamp and surrounded by trees. This subterfuge was to cost Wu dearly. On New Year’s Eve 1967, Red Guards hauled him into the village square and accused him of being a Capitalist Roader. “It was the toughest time of my life,” he recalled. “In a single night, I was stripped of my official titles, publicly condemned, and saw my sons savagely beaten. One is still paralyzed. I’m a very firm believer in the Communist Party and socialism. But that period was a test for me.”
Wu’s real skill was in knowing when to buck prevailing trends and push at the boundaries of risk. In the early reform period of the 1980s, nearly every commune in China was returning land to farmers, but Wu did the opposite. He requisitioned dozens of plots and established a pesticide factory. It was dirty and polluting, but it turned over 2 million yuan a year. Textile mills and other plants followed as Huaxi blazed a trail for the thousands of town and village enterprises that sprang up across the country during this period.6 The environment was not given a second thought. By 2000, town and village enterprises accounted for more than half of China’s pollution.
In Jiangsu, local government-run businesses expanded faster than anywhere, at one point employing almost a third of the population. Huaxi kept ahead of the pack thanks to Wu’s knack of reading the political tea leaves. In 1992, he watched a TV broadcast of Deng Xiaoping’s famous pro-entrepreneurial speech during a tour of southern China. Immediately, according to his biographers, he foresaw a surge of economic activity and ordered village officials to borrow every yuan they could lay their hands on to buy up aluminum and other raw materials. Within three months, goes the story, the price of aluminum tripled. But his admirers fail to mention the environmental cost. Aluminum smelting is one of the three heaviest-polluting and energy-intensive industries in China. The worst was steel. This was the business that Huaxi moved into next.
The village bought milling equipment and blast furnaces. This was the trend at the turn of the century as China’s economy became increasingly driven by resource- and energy-intensive industries that were no longer economical in the West because of tightening environmental regulations and increasing labor costs.7 Much of the equipment was made locally, but entrepreneurs from Jiangsu and Hebei also snapped up old blast furnaces from the Ruhr, dismantled them, and shipped them piece by piece to towns and villages on the other side of the Eurasian landmass.8 Though reported in Europe at the time as an alarming shift of industrial power and jobs, it was also a relocation of pollution and carbon emissions. China quickly overtook Germany, Japan, and the United States to become the world’s biggest steel producer with more than a third of the global market. That fulfilled another of Mao Zedong’s dreams, but the great news for China’s economy was awful for its environment.9 Steel soon came to account for a tenth of the country’s energy demand and a similarly large proportion of its acid rain and carbon emissions.10
In Huaxi, the steel mills held pride of place. We crossed Textile Bridge—named after the garment-making industry that was another of the village’s main sources of revenue—passed smokestacks and giant mounds of coal, then rolled up at the gates of a factory. As we donned our yellow safety helmets, the manager—inevitably, one of Wu’s grandsons—proudly told us Huaxi Steel was the biggest company in the village.11 He took us to the flat-bar production line, where the heat shimmered above the long belt on which steel strips 100 meters long were fed along rollers to a cutting machine. Five years earlier, the young Wu told me, China had to import flat bars, but now Huaxi sold them for 3,000 yuan ($429) apiece. “Those are not piles of steel,” he said. “They are piles of money.”
The mix of communist politics and capitalist economics was well named as GDPism. Everything was sacrificed for growth. Though Huaxi took this to extremes, it was far from unique. The coastal belt from Jiangsu down to Guangdong had become the workshop of the world. From the Number One Village I traveled south to Zhejiang, another rich coastal province that was famous for its entrepreneurial, rule-breaking spirit. I got an immediate introduction to the ethos when I took a bus across the border. My assistant asked the woman at the ticket booth how long the journey would take.
“It should be five hours but it can vary quite a bit,” she said.
“What do you mean? By how long?” I asked.
The saleswoman was vague. “It can be a number of hours.”
“Why? Because of traffic?”
“It depends on circumstances. But you had better hurry. The next one is about to leave.”
We rushed to the bus. It was a little shabby and, to my surprise, we had bunk beds instead of seats. Why? If the journey took five hours, we ought to be there before dark. But as we quickly learned, the schedule, like any other rule, it seemed, went out the window if there was a chance to make money. Five minutes outside the bus station we made our first unscheduled stop. The driver popped out and came back with an armful of boxes. Mysterious, I thought. Ten minutes later we halted again so the driver could pick up a few bags. From then on we constantly stopped and started, but strangely it was usually only the driver who got on and off. The route was peculiar too: no highway, but several side streets and even an industrial estate. What was going on? I was beginning to get frustrated. At this rate, we would never reach our destination on time.
The passenger in the neighboring bunk noticed my unease. “Relax. The driver’s just making a little money on the side.”
“Eh?”
“Doing deliveries. Picking up extra fares.”
“Is that allowed? Is it normal? What about us, the passengers? Don’t we get a say?”
He shrugged as if my question was absurd. “Don’t worry. He’ll get us there eventually.”
Nobody else seemed in the least bit bothered, though we seemed to have the Warren Buffett of the bus- driving world as our driver. He had business every few kilometers along the road. After a couple of hours, my patience ran out.
“Come on,” I said to my interpreter. “This is ridiculous. We won’t arrive until morning at this speed. Let’s get a taxi.”
We bailed out at the next town, flagged down a cab, and set off on a highway flanked by farm fields and factories. I breathed a sigh of relief. Finally, we were making progress. No moneymaking detours would slow us now. Foolish me. The entrepreneurial spirit blew in with the sea breeze in this part of China. Drivers of taxis, no less than buses, were masters of squeezing a few extra kuai from their fares. We crossed the broad expanse of the Yangtze and then a couple of hours later our driver pulled up alongside another taxi, wound down the window, and started talking.
“Why have we stopped? What’s going on?” I asked my assistant.
“They are haggling,” she replied.
“Over what?”
“Over us,” she grinned.
“What?!”
“Our driver wants to sell us. This other driver is from Yiwu and wants to go back home with a paying passenger so he is buying part of our fare. Don’t worry, you won’t have to pay any extra.”
I was outraged, then amused. As we hauled our luggage out of one trunk into another, I laughed at the indignity. We had been haggled over like cabbages in a market. This was human trafficking! But I marveled too at the business mentality of Zhejiang.
“Obviously, they haven’t heard the saying ‘The customer is god’?” I grumbled. “I just hope we fetched a good price.”
The entrepreneurial spirit reached its apex at our destination, Yiwu. If China is the workshop of the world, this was its showroom. Selling everything from hair clips and costume jewelry to engine parts and cranes, the town’s local market had grown from a few dozen street stalls fifteen years earlier to become the world’s biggest
