For the past decade, the city of Zhengzhou has been getting a taste of the Chinese dream.
Fueled by investment, including large subsidies from the central government in Beijing, the provincial capital of the inland province of Henan has boomed.
Once an impoverished city of 10 million set between the Yellow and Yangtze rivers, Zhengzhou now boasts a gleaming downtown skyline and a cascade of freeway overpasses. An upgraded rail network has helped turn the city into a logistics hub, linking China’s output with overland shipments to Europe as part of the Belt and Road Initiative.
Apple supplier Foxconn Technology Group built the world’s largest iPhone factory in Zhengzhou.
For many across Henan, a province of 100 million people, Zhenghzou has become a symbol of achievement and opportunity in China’s hinterland — a magnet for those leaving pig farms and wheat fields in search of better lives.
Personal incomes in Zhengzhou over the past decade have doubled on average, last year hitting 33,105 yuan (US$4,795 at the current exchange rate). That has allowed many residents a taste of middle-class life; consumer appliances, luxury goods and apartments of their own.
Automakers like General Motors, Honda and Nissan, and consumer brands like Christian Dior and Cartier, have taken note, betting that rising incomes in cities like Zhengzhou would open new and expanding markets for them.
However, an economic slowdown that began late last year appears to have accentuated uncertainties in the city. With momentum slowing across the board from real estate to the consumer and tech sectors, some feel their chances of moving up the social ladder have diminished as the cost of living outpaces income growth. Once abundant opportunities now seem to be drying up.
Reuters reporters traveled to Zhengzhou late last year and early this year to talk to dozens of business owners, consumers and people hoping to buy homes. Many expressed anxiety or doubts about their ability to hold on to or achieve the dreams of prosperity promised by Chinese President Xi Jinping (習近平).
These are three of their stories.
They indicate how hard it would be for China to build a new foundation for the economy of its future in inland provinces like Henan and are a reality check for global retailers searching for lucrative new markets.
THE ENTREPRENEUR
For as long as he can remember, Gong Tao wanted nothing more than to become an entrepreneur like his father.
A traveling salesman of Chinese calligraphy brushes, his father eked out a living crisscrossing Henan to provide for the family, while imbuing in Gong the value of hard work.
Upon graduation, Gong set up a venture in Zhengzhou in 2014 to digitally etch photographs onto metal prints for clients commemorating special occasions.
Two years later, he pivoted into the booming online economy, creating a start-up that helped clients design programs for WeChat, the ubiquitous Chinese social media platform.
Business was good, and buoyed by the frothy tech scene and government policies supporting entrepreneurs, Gong expanded aggressively, splashing out on office renovations and new furniture.
He employed as many as 70 staff, but then a flood of cheaper competitors undercut his business just as the Chinese economy started slowing last year.
“We didn’t anticipate the market would fall off a cliff,” the soft-spoken Gong, now 26, said at a fast-food outlet in downtown Zhengzhou.
He said he had drastically cut back spending on clothes and stopped eating out.
“For the whole of 2017, business was flourishing, things were pretty good, and then all of sudden in 2018 it was flatlining,” he said.
In October last year, Gong took the advice of a mentor who suggested he wind up his business and wait out the downturn.
He landed a sales job at a subsidiary of one of China’s largest e-commerce firms, but swiftly became disillusioned with the monotony and low pay, and decided against returning to work after Lunar New Year in February.
Gong laments not buying an apartment before prices began to spike dramatically three years ago, even though prices have been easing recently, and the fact his relationship with his then-girlfriend unraveled as his business did.
He has not given up on his lifelong aspiration of running his own business, but says he needs to be realistic and is trying to come to terms with having to get a regular office job for now.
“The reality is very cruel,” he said.
THE GRADUATE
With a telecommunications degree from a top Beijing university, a foothold in the Zhengzhou property market and marriage in the offing, all by the age of 26, Wu Shuang would normally be seen as a winner by many Chinese.
But in interviews, Wu described a relentless anxiety weighing on him and his peers in Zhengzhou.
The 2 million yuan apartment Wu bought in 2017 depleted most of his family’s savings and left him with more than 8,000 yuan in monthly mortgage payments.
After quitting an office job at a state-owned company last year, which he described as dull and badly paid, he also had to shelve plans for opening a bar in Zhengzhou after his partners pulled out as a spending slump hit the city.
“It’s not just house prices; it’s not just that it’s hard to find a job,” Wu said. “Right now it feels like, because the economy is slowing, there are just a lot fewer opportunities.”
For many young people, the Chinese dream of finding a prestigious job, getting married by a certain age and buying a home felt out of reach, he said.
As property prices soar, any are forced to rely on their parents financially well into adulthood, he said, a practice known as kenlao (啃老), or “gnawing on elders.”
Wu said his parents had helped with the deposit and monthly loan payments on the apartment he bought, an arrangement that makes him uneasy, especially as his parents are not wealthy.
“A lot of people feel powerless because those who are enjoying the good life, most of them are doing so not because of themselves, but because of their family,” Wu said over an iced coffee at a bustling cafe in Zhengdong, Zhengzhou’s new commercial district.
“Your salaries may not differ too much, but because of your family background you may have a lot less choices in life,” he said.
THE FISHERMEN
Further down China’s social ladder, many feel left behind and unable to improve their lives through just hard work.
For generations, the Suns plied their fishing boats up and down the Huai and Yellow rivers, living off their daily catch. Like their grandfather and father before them, brothers Sun Genxi, 44, and Sun Lianxi, 32, were born on a fishing boat.
China’s economic ascent has tantalized the brothers.
From their floating vantage point on the Yellow River, about an hour’s drive north of central Zhengzhou, they have gawped at the provincial capital’s dramatic development.
“These high-rise buildings have nothing to do with me. They’re for others, not me,” Sun Lianxi said. “We don’t have any part in it.”
The Sun brothers had no fixed abode for most of their lives, dropping anchor wherever the best haul took them.
About a decade ago, they settled by the Yellow River on the northern fringes of Zhengzhou, so Sun Genxi’s eldest daughter could go to school.
They want their children to complete school, and the first to break from the long line of fishermen in their family.
“If you don’t study hard, my today is your tomorrow,” Sun Genxi, who is illiterate, tells his daughter, now close to completing high school.
The Suns were owners of a large houseboat, enough to accommodate their clan of 17 spanning four generations under one weather-beaten roof. The boat also served as a floating restaurant, serving freshly braised fish to day-trippers cruising the Yellow River on the outskirts of Zhengzhou.
However, as part of a broad-ranging environmental crackdown, local authorities in 2017 took over the houseboat in the name of minimizing water pollution and overfishing.
The Suns now live in tents of tarpaulin and plastic sheets by a floating bridge on the banks of the Yellow River, reduced to fishing from a small dinghy.
“My dream is to have a place to live. My family can all live in the house and I can go work for others and stop fishing,” Sun Lianxi said. “Now even having a life like that is a luxury.”
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