I was in China just before the three-gorges dam flooded one of the longest rivers in the world. Along most of the 4,000 mile-long Yangtze valley, cities, towns and villages were emptied of people and flooded. Millions of displaced people were moved and housed in brand new cities. In effect, these people got free housing from the government. All the peasants who had previously lived in earthen-floored huts and farm houses (shacks by western standards), now lived in brand new concrete high-rises with electricity and fully equipped modern kitchens. They were also given vouchers for washing machines and dryers during the 2008-2009 credit crisis to help boost the economy. (Think about it. Millions of washers and dryers were given away to the people to keep the manufacturers humming!)
Now that these former farmers no longer have their rich valley soil to till, what's become of them? What do they do to earn their keep? Well, some went to work to build the washers/dryers. Others stuck to making such traditional crafts as basket weaving; making furniture out of bamboo; painting porcelain; sewing shoes out of waste cloth; starting their own food processing business by using the family recipe for pickling and preserving vegetable. In short, they turned their winter work into full-time jobs.
The older folks were retired and given pensions. (When riding the Shanghai subway, I noticed that all of the commuters were young people. Surprised, I asked a commuter: why? He replied that his parents had been retired by the government at the age of fifty to make room for the younger workers. He and his wife work while his parents stay at home caring for the grand-children.)
Today, there are still hundreds of millions of peasants living in abject poverty in the countryside. (By one estimate, 200 million peasants live on a dollar a day.) They still work the land like their ancestors. Not much has changed. But change is taking place.
What has changed is the people's desire to improve their standard of living. To make change happen, the Chinese focused on building a workable infrastructure. Consequently, they've built brand new cities with government buildings, modern office space and residential complexes. Many of these new cities stand empty and unoccupied. While infrastructure is easy to build, the new businesses needed to make these new cities hum is somewhat more difficult. Even for a command and control economy.
While the government can command and/or request the people to move into these unoccupied locations, what would they do for work once they've moved?
Clearly, the next phase of China's development is the creation of new, or the reinvention of traditional Chinese arts, crafts, and local industries that the Chinese have thrived on for thousands of years. But the emphasis would have to be on "new."
Today, Chinese colleges and Universities produce 830,000 graduates a year.
There are 123 million young people between the ages of 20-25.
There are 6 million educated graduates looking for work.
These young people come from all walks of life, not just the "peasant" class.
The Chinese government, local, provincial and national, form the largest venture capital entity in the country. How they fund new ventures will be the determining factor in China's future.
How would they employ this giant pool of bright, educated people?
Start biotech companies? Done that.
Recruit the best and brightest to do basic research on finding a breakthrough in alternative energy? Certainly.
Clearly, the country or company that develops and patents a totally new fuel will find itself leading the world into a bright and limitless future.
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