Private Enterprise in ChinaBeijing, Spring 2012
This block my area studies class is called Modern Chinese Economy, and the subject matter is exactly what it sounds like. We are currently in the final week of the class, but the previous two weeks were marked by two extremely interesting field trips that gave us more of a field perspective on how “capitalism with Chinese characteristics” actually operates outside of the classroom.
Our first field trip took us unto downtown Beijing to see two of the major private enterprises headquartered here – SOHO, a luxury real estate company with futuristic designs, and Stone, one of the first private enterprises in the People’s Republic of China that has subsidiaries in many fields. While SOHO had a more interesting (and photogenic) tour, our discussion with one of the higher-ups in Stone allowed us to hear more about the history of private enterprises in China, how they operate with and around the government, and where he thought the future of the company was headed.
One of the things I really noted was how different the outside of each topic was from the deeper issues – a visual representation of this came in our tour of the Sanlitun SOHO retail and living complex during lunch. While the buildings were beautiful, extravagant, and profitable, the retail areas seemed to have more empty storefronts than actual shops. In addition, while Stone was successful and sat on a lot of money, it still had to use many roundabout ways to get around government restrictions, even if they were less-than-legal.
Something I have really enjoyed about this class is its ability to link what we see in the field to what we learn about from the textbook and articles, as well as connect the macro and microeconomic examples of each concept. My final paper is on household saving, but what we saw at Stone and SOHO really brought the the concept of a country that needs to consume more to the field. The focus on saving for and investing in the future outweighed consuming in the present, prompting companies to buy up real estate space in the SOHO complexes without filling them with shops. Though SOHO made money from these investments, none of the malls generated income from shoppers, as there was nowhere for them to actually shop. It really showed a more sobering picture of some of China’s rapid growth since the reform and opening era.
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