A tale of two Chinas: High-tech and the 'low-end'

Sunday, 03 December 2017, 01:03:24 PM. I don’t have an advent calendar for counting down the days to this year’s Fortune Global Forum in Guangzhou, China, but if I did, there would only be three little doors left to open—and just one before the launch of our first annual Brainstorm Tech International event.

I don’t have an advent calendar for counting down the days to this year’s Fortune Global Forum in Guangzhou, China, but if I did, there would only be three little doors left to open—and just one before the launch of our first annual Brainstorm Tech International event. Alan Murray and I will travel this morning from Hong Kong to Guangzhou, where we’ll be joined by the Fortune editorial team and a star-studded collection of more than 600 business and political leaders from China and around the world.

It promises to be spectacular week. We’ll be talking about technology, innovation, prospects for the global economy and much more with Chinese tech titans including Alibaba Group’s Jack Ma, Tencent Holding’s Pony Ma, Foxconn’s Terry Gou and Lenovo’s Yang Yuanqing. We’ll hear from American luminaries including Apple CEO Tim Cook, Wal-Mart chairman Greg Penner and Ford Motor chairman Bill Ford. Wang Yang, the third-ranking member of the Chinese Communist Party’s Politburo Standing Committee, will lead a delegation of senior leaders from Beijing. US Ambassador to China Terry Branstad and former Treasury Secretary Hank Paulson will share their wisdom, and Canadian prime minister Justin Trudeau will deliver a keynote. The Guangzhou municipal government, which never does things by half, has been preparing for the Forum all year, so we’re sure to see Guangzhou—and modern China—at its finest.

Guangzhou is a worthy venue for such an extravaganza. In an article in the latest issue of Fortune, I argue that China, long dismissed as a haven for copycats or just a source of cheap labor for Western manufacturers, is fast emerging as one of the global economy’s great centers of innovation. We’ll meet some of China’s most talented entrepreneurs at Brainstorm Tech International, where we’ll launch a new contest to identify China’s most innovative ventures. We’ve narrowed a field of nearly a hundred dynamic startups to 15 finalists and will select winning companies in five key categories. From those five, we’ll pick one overall China Innovator of the Year.

As we make final preparations for this rarified gathering, a different side of modern China has been playing out in the streets and shantytowns of Beijing. Over the past two weeks, the capital’s newly appointed party boss has led a sweeping crackdown on migrant workers from the Chinese countryside. The action follows a November 18 fire in a rundown warehouse housing migrants. Nineteen people died, seven of them children. The next day, municipal officials launched a citywide fire safety inspection which morphed into a campaign to demolish illegal dwellings. In many cases, police gave migrant workers and their families only a few hours notice before declaring structures condemned, cutting off power and water and rousting occupants into the streets.

The plight of Beijing’s downtrodden migrants rarely elicits much sympathy from the city’s burgeoning middle classes—particularly those who hold a Beijing hukou, a kind of internal passport, granting them permission to reside in the capitol, send their children to Beijing schools and seek health care from municipal hospitals. But the mass evictions seem to have struck a nerve. In recent weeks, middle class parents in China’s major cities have felt bullied themselves following reports of shocking cruelty at schools in Beijing, Shanghai and other major cities. Last month, parents of toddlers at an expensive kindergarten in Beijing filed a report to police saying they had found needle marks on their children.

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Chinese authorities have squelched discussions of both the migrant evictions and allegations of child abuse at school. In the case of former, censors have have banned Internet and social media references the phrase “low-end population,” a term first used by the government that has since come to be regarded as a shorthand for official prejudice towards migrants. For the latter, the government has forbidden any reference to RYB Education, the New York-listed Chinese firm that owns the Beijing kindergarten.

In the U.S., we tend to assume that stifling public discussion about social and political issues ultimately inhibits economic and technological progress. Bill Clinton famously admonished his Chinese counterpart Jiang Zemin when Jiang visited America in 1997 that efforts to promote technological progress while at the same time restricting freedom of expression put China “on the wrong side of history.” But in the two decades since, China’s leaders have rejected the notion that there’s a zero sum tradeoff between political control and technological innovation. If anything, they seem increasingly confident the two can work hand in hand.

You’ll find detailed coverage of discussions at the Global Forum and Brainstorm International on Fortune.com. More soon from Guangzhou.

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