Transcending Boundaries: Zhejiangcun: The Story Of A Migrant Village In Beijing (China Studies)

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TRANSCENDING BOUNDARIES

CHINA STUDIES Published for the Institute for Chinese Studies University of Oxford

EDITORS:

GLEN DUDBRIDGE FRANK PIEKE

VOLUME 5

TRANSCENDING BOUNDARIES Zhejiangcun: the Story of a Migrant Village in Beijing

BY

XIANG BIAO

TRANSLATED BY

JIM WELDON

BRILL LEIDEN • BOSTON 2005

This work is a translation based on Kuayue Bianjie de Shequ (A Community Transcending Boundaries), 2000, Sanlian Shudian, Beijing. Cover illustration: Migrant food-sellers ousted by the big clean-up in 1995 quickly set up makeshift stalls in a lane behind Jingwen Market to carry on business in the ‘shade’ of this government project (Zhejiangcun 1995). This book is printed on acid-free paper.

Library of Congress Cataloging-in-Publication Data Xiang, Biao. Transcending boundaries : Zhejiangcun : the story of a migrant village in Beijing / by Biao Xiang ; translated by Jim Weldon. p. cm. — (China studies ; 5) Includes bibliographical references and index. ISBN 90-04-1420-1-0 1. Zhejiangcun (Beijing, China)—Description and travel. 2. Beijing (China)—Description and travel. 3. Migration, Internal—China—Zhejiangcun (Beijing) I. Title: Zhejiangcun : the story of a migrant village in Beijing. II. Title. III. China studies (Leiden, Netherlands) ; 5 DS795.4.Z44X53 2004 951’.156—dc22 2004058145

ISSN ISBN

1570–1344 90 04 14201 0

© Copyright 2005 by Koninklijke Brill NV, Leiden, The Netherlands Koninklijke Brill NV incorporates the imprints Brill Academic Publishers, Martinus Nijhoff Publishers and VSP. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Brill provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910 Danvers, MA 01923, USA. Fees are subject to change. printed in the netherlands

CONTENTS

List of maps ................................................................................ Author’s preface to the abridged English version .................. Acknowledgements ......................................................................

vii ix xix

Introduction ................................................................................ The study area ...................................................................... ‘Community’, ‘boundaries’, guanxi and xi ............................ Xi, the state and the history of Zhejiangcun ...................... The structure of the study .................................................... My involvement in Zhejiangcun ..........................................

1 5 10 20 24 27

Chapter One 1984: Let’s Go to . . . Beijing! ........................ The migration trail from Wenzhou .................................... The origins of Zhejiangcun .................................................. Doing it together and roadside guerrilla tactics .................. Evasion and remaking tradition ............................................

29 29 37 40 43

Chapter Two 1986–1988: Getting Street-wise ...................... A foot in the door ................................................................ Migrant traders and Beijing stores in alliance .................... The consignment-selling model ............................................ Capable people, ‘one of our own’, and people from Yongjia ................................................................................ “Inappropriate . . . to remain indeﬁnitely” ............................

46 47 49 53 57 59

Chapter Three 1988–1992: A Breakthrough with Leather Jackets ...................................................................................... The craze for leather jackets ................................................ Settling disputes: big players and gangs .............................. ‘Political typhoons’ and running away ................................

61 62 68 75

Chapter Four Into the 1990s: Networks Across the Country Diﬀusion migration ................................................................ A nationwide Wenzhou migrants’ business network ..........

79 80 82

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contents Nationwide factor markets .................................................... Reinventing the home clans ..................................................

85 95

Chapter Five 1992–1994: Government Comes to Zhejiangcun ............................................................................ Retailing in big state stores .................................................. Large-scale leasing in the private sector .............................. The ‘Jing-Wen’ Market collaborative project ...................... Contradictions and confrontations ........................................ The Yueqing liaison oﬃce ....................................................

104 104 107 111 113 118

Chapter Six 1994: Taking Root in Beijing .......................... The craze for building marketplaces .................................... Expanding business circles and hot competition ................ Residential compounds: another craze ................................ Big players, gangs and ‘big men’ ........................................

123 124 131 134 139

Chapter Seven 1995: Capitulations and Comebacks .......... Jingwen Market concern group ............................................ Liu Shiming’s JO Compound development ........................ Cold winds in Beijing ............................................................ October 1995: an unexpected thunderclap ........................ Daqingli! a demolition diary .................................................. Getting on with business ...................................................... Zhejiangcun compounds make a comeback ........................

144 145 151 154 158 162 166 168

Concluding Remarks .................................................................. Transcending boundaries from below .................................. Policy implications ..................................................................

172 176 178

Glossary ...................................................................................... Glossary of place names ............................................................ References .................................................................................. Index ..........................................................................................

183 186 191 193

LIST OF MAPS

Map 1. The location of Zhejiangcun and other migrant communities in Beijing. Map 2. The expansion of Zhejiangcun (1984–1998). Map 3. Places in the migration trails and nationwide business networks of the Zhejiangcun migrant community.

AUTHOR’S PREFACE TO THE ABRIDGED ENGLISH VERSION

At the outset, I would like to state my debt of gratitude to Dr Frank Pieke at Oxford University. I met Dr Pieke for the ﬁrst time in 1995 in Beijing where he expressed a strong interest in my work on Zhejiangcun (Zhejiang ‘village’), the thriving business hub in Beijing’s Fengtai district, founded in 1984 by spontaneous migrants from Wenzhou in Zhejiang province. His insightful suggestions for further investigation greatly encouraged me to continue my research, which was published in 2000 under the title Kuayue Bianjie de Shequ (‘A Community Transcending Boundaries’). Dr Pieke immediately proposed an English translation, and without his extraordinarily generous assistance in making this happen, this present publication would not have materialised. In fact, many of the points raised here were developed through my interactions with him and inﬂuenced by his own work. *

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Spontaneous migrants in China today occupy a special position because they are ‘freed’ from a territorialised state control system, a system based on rigid divisions between the urban and the rural, and between provinces and cities. Underpinning these boundaries of state regulation is the unique household residency permit or hukou system, often seen as the key institutionalised obstacle to spontaneous migration in China. In this context, Zhejiancun is (by deﬁnition) a community of spontaneous migrants transcending the geographical, social, administrative and ideological boundaries of state regulation. Since writing up the original Chinese manuscript in 1998 much has changed, not just in Zhejiangcun but in my own perspectives as well as in migration policies in China. In light of all this, I feel it appropriate here to provide some comment on how my earlier ethnography and arguments may be read and how I myself now see the work, including its limitations. *

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author’s preface

On 1 October 2001, the Chinese government oﬃcially announced its intention to relax the hukou system. As a result, 20,000 smaller towns and cities across the country can now issue urban hukou to migrants provided they can show proof of having a legitimate address and stable source of income at the place of destination. This policy change was widely acclaimed as a breakthrough, and expected to have fundamental impacts on migration in China. In view of this development, is the case of Zhejiangcun still institutionally signiﬁcant and politically relevant? My provisional answer is yes. The social tensions engendered by migration that have shaped the experiences of those in Zhejiangcun and the relations between migrant populations and the State have not disappeared, but may even escalate with the relaxation of hukou. There are various reasons for this. First, it should be recognised that the hukou system is not the main cause of the social tensions per se since it cannot prevent people’s actual mobility in post-Reform China. The hukou was an essential instrument regulating everyday life prior to the market-oriented Reform of 1978 because it was linked to a quasi-ration system for necessities such as food, cloth and coal. With most commodities now available on the open market, migrants’ non-hukou status has much less inﬂuence on their daily needs. Most migrants to big cities look for work or run small businesses in the non-state sector, for which their hukou status is largely irrelevant. In the present context, hukou becomes an issue only when migrants want to settle permanently in cities and need access to formal education for their children, to opportunities in the public sector, or to ownership of land and houses. However, rural migrants in China are not as keen as may be assumed to settle down in big cities. Because of the collective ownership and household contract system of land in rural China, there is for example no landless class that might have no choice but to drift to metropolises. Instead, many migrants move back and forth between cities and villages to earn an income in both places. During my ﬁeldwork with peasant workers (min’gong) in the Pearl River Delta in south China, I had also noted a marked trend towards petty bourgeoisiﬁcation, in which migrants bettered their status as employees by becoming small-business owners. For them, the most attractive places to settle down are the small towns or newly developed cities close to their native villages. Not only are barriers to market entry lower and savings better utilised, government in these places also enthusiastically welcomes these

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migrants and issues a hukou for a fee (Xiang 1995). In the case of Zhejiangcun, the lack of hukou has not stopped the migrant Wenzhou businesspeople from creating their own national business networks or experimenting with community management. (It might even be argued that their lack of legitimate status encouraged them to develop their own system.) Thus, they have become de facto settlers in Beijing regardless. Given that the Reform has been in place for twenty years, the impact of the amendment in the hukou policy in lessening the social tensions arising from migration at this point should not be overstated. In my view, a more important determinant in the migration scenario in China in the coming years will be in the extent to which China can expand its economy, and with a balanced development in rural and urban areas. Second, the social tensions consequent to spontaneous migrations are at bottom a result of the overall administrative system in China, of which hukou is only a part. The distribution of political power and responsibility within the Chinese state is strictly deﬁned along lines of place (particularly at the province level). For example, in the 1995 clean-up and demolition of housing compounds in Zhejiangcun, the Beijing municipal government was so desperate to push the migrants out of its administrative boundary that it issued a special directive forbidding all the districts and counties in Beijing from taking in anyone from Zhejiangcun. Amazingly, this policy was backed by the state council. Even central government seemed to be blind to the fact that these migrants were still Chinese citizens, they would still be in China, and that this could not be changed simply by chasing them from one administratively deﬁned area to another! As a component of this place-embedded social control paradigm, regulation by hukou can only work eﬃciently if both economic and administrative systems are territorialised. It is precisely because of the erosion of the territorialised economic system with the emergence of a uniﬁed national market system in the 1980s that the hukou system started losing its force. For the same reason, relaxing or even abolishing hukou policy alone will not automatically eliminate the social tensions generated by population mobility under a territorialised administrative system. Behind the 1995 clean-up was not so much the migrants’ non-hukou status, but the government’s anxiety that the migrants could not be controlled by any existing conventional measures. Social problems in Zhejiangcun, such as the activities of criminal street gangs, semi-illegal construction and poor provision of

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amenities, cannot be solved as long as the urban administrative system remains as it is, even if all the Zhejiangcun migrants were given a Beijing hukou overnight. No matter what cities’ hukou that they might be given, since moving around the country has come to be seen as the way of doing business, Zhejiangcun migrants can never be fully covered by the place-embedded social control system. Third and more fundamentally, is the state’s deeply ingrained suspicion of society. In the territorialised system of governance, place and physical boundaries are not important per se; place is important because it is believed that conﬁning members of society to certain physical-administrative boundaries is the most eﬀective way to exercise social control. As long as this stance remains, amendments to the hukou will not diminish the social tensions arising from spontaneous migration. For instance, in Zhejiangcun itself, the dayuan (residence-cum-production compounds developed by the migrants) could be marked out as a special type of space and served as an intermediary between government and the migrants. This potential was recognised by the local Dahongmen police station in, for example, containing the criminal activities of street gangs in the precinct. However, eﬀorts to collaborate with the owners to use the compounds as a unit for social management were discouraged by higher levels of government. This was not because the compounds did not ﬁt into the larger place-based social control system, but because government feared that these migrant owners might turn around and bargain for more power. Any oﬃcial sanctioning of improved measures for self-governance that could lead to a reduction in the incidence of crime, could in the long term also lead to structural change in the relationship between state and society. When faced with a choice between repressions to cope with sporadic problems, no matter how severe, and potential structural change, government understandably preferred the former. The real issue, in other words, was about relations between state and society. In the present-day context of China’s accession to the World Trade Organization (WTO) and the consequent restructurings of the rural economy, it is safe to say that the relaxation of hukou will lead to an increase in the volume of migration. If the basic administrative paradigm of China remains unchanged, this will only deepen social tensions. The case of Zhejiangcun also shows that spontaneous migration presents challenges to the system because migrants not only cross boundaries, but they may also establish their own ‘rooted’ and ‘ter-

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ritorialised’ space in the new places. These two processes, the transregional ﬂows of people, money and information on the one hand, and the creation of tangible communities on the other, are in reality one and the same. It is because of this that Zhejiangcun cannot be completely ‘cleaned up’: the rooted community is only the tip of a large iceberg; below the surface lie Zhejiangcun’s nationwide networks and ﬂows. *

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During the time I was conducting my research on Zhejiangcun, I was a young student in China with little knowledge of Western social theories. Although I was aware of the term ‘transnational communities’, it was only after I went to Oxford to pursue a doctorate that I come across such books as Nations Unbound (Basch, Schiller and Blanc 1994) and learnt more about ‘transnationalism’. The commonality between this literature and my research is obvious (the title of my original book could be happily translated as ‘A Community Unbound’). However, implicit in the notion of ‘transnationalism’ is the presumed norm that citizens can move freely within a nation state but not internationally, making the focus on cross-border ﬂows and connections institutionally signiﬁcant. The story of Zhejiangcun raises the question of how far we can distinguish between international and internal migration simply on the basis of national boundaries. From the migrants’ point of view, transregional internal migration may not be that fundamentally distinct from international mobility. Indeed, in many cases, transnational connections cannot be fully comprehended without examining internal migrations. For example, there are two Xinjiang ‘villages’ in Beijing formed by Uygur (Muslim) migrants from Xinjiang province in northwest China that have become networking centres for Uygur migrants and businesspeople, both nationally and internationally. Whether providing assistance in applying for visas, getting through the paperwork required for international trade, or pulling strings with enterprises both in Beijing and elsewhere, these two communities facilitate fellow Uygurs going on pilgrimage to Mecca, exporting textiles and garments to west and central Asia and importing carpets from these countries, and in some cases smuggling drugs. In the state of Andhra Pradesh in south India, where I did ﬁeldwork for my doctoral thesis on global ﬂows of information technology (IT) professionals, young Kammas (the dominant caste in the state) moved from villages to cities to get a

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better education, and then went on to the West. The aims of their family strategy were: “have lands in Andhra [the most fertile area in the state], have a house in Hyderabad [the state capital, about 300 km away from Andhra], and have a job in America”. Indeed, the relationship between the national and the transnational seems to be a tricky issue in the literature of transnationalism. On one hand, it assumes that the nation state is the central unit of organisation in today’s world and, therefore, transnational ties deserve special attention, while on the other, it focuses only on groups who have transnational connections, which comprise only a very small fraction of the world population. How transnational processes inﬂuence the vast majority of people on the ground who live within nation states is far from clear. Linking internal and international migration may provide a fuller picture. For example, the collapse of the Soviet bloc at the end of the 1980s (itself a transnational phenomenon) led to signiﬁcant cross-border mobility of independent traders, particularly from Russia, into China to purchase consumer goods. Their orders for leather jackets gave Zhejiangcun a decisive boost and it soon became the centre of a nationwide network of factor markets. Some Zhejiangcun traders also moved to towns bordering Russia or Mongolia, or even into Russia, to do business. Similarly, globalisation in the IT industry led to massive ﬂows of IT professionals from Andhra Pradesh to the West. In response, rich farmers were more ready than before to abandon their businesses in the village and move to the city, hoping for their children to join the global IT labour force as soon as possible. IT professionals working overseas persuaded parents living in villages to move to the city for a better life and to make more proﬁtable investments in real estate rather than in agribusiness. Therefore, activities and connections that cross national borders are in many cases extensions of activities from within. Focusing only on phenomena cutting across national borders, as the concept ‘transnationalism’ has sometimes done, obscures the rich realities on the ground. Analyses of the connections between internal and international migrations can help reveal how transnational processes at the global level interact with social change in local contexts. Another theme related to the notion of ‘transnational community’ concerns the term ‘community’ and the approach of my study, which I dub a ‘guanxi perspective’. (Although I refer to Zhejiangcun as a ‘community’, I use the term only in its broadest sense, meaning noth-

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ing more than a group of people living in a particular place.) The key diﬀerence between the traditional community approach and the guanxi perspective (discussed at some length in the introduction) lies in diﬀerent understandings of ‘holism’. In the traditional ‘community’ approach, holism implies that diﬀerent parts work together to form a self-contained ‘whole’ or entity with a well-deﬁned boundary. From a guanxi perspective, it is far from inevitable that these relationships will form a bounded entity. On the contrary, a guanxi perspective focuses on mechanisms by which diﬀerent types of human relationships extend, shrink and alter through interacting with other relationships. For example, businesses in Zhejiangcun are deeply embedded in family relationships, yet the migrants consciously avoid long-term business partnerships based on family connections, and they are constantly seeking to establish new business relations in new places. This balance has been a major driving force in the expansion of their networks, both geographically and socially. Strategies of this kind and their structural consequences are the focus of my ethnography. Ultimately, Zhejiangcun is seen by its inhabitants as clusters of interactive relations rather than an entity, a process rather than a structure. It was long after I completed my study that I came to know that so-called ‘deterritorialised/multi-sited ethnography’ was an issue in current anthropology. It would be interesting to see whether the Chinese ‘holism without wholeness’ perspective could contribute towards new ethnographic narratives along this line. *

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Lastly, I wish to turn to some major limitations of the work and reﬂect on some of the biases in my own thinking. First, while my account details how the trading system of Zhejiangcun developed through the interaction between the networks internal to the community (not pre-existing but developed over time) and the state (from the outside), it falls sadly short in providing suﬃcient information on the production process: how workers were organised and controlled in workshops to transform their labour into material commodities. The account also suﬀers from the lack of a gender perspective. Despite some mention of the essential roles played by women in network-building (brokering business partnerships, running labour agencies and ﬁnance associations), more generally, given that women cultivate, nurture and maintain the social networks which form the basis for almost all trading activities, there is hardly any space devoted

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to the voices of women’s experiences and perceptions of the life of Zhejiangcun. And this neglect of ‘worker’ and ‘woman’ are inherently related. The production system in Zhejiangcun is maintained by two groups of women: the wives of household business owners who directly supervise production, and the female workers recruited from other provinces who serve as the major labour force. The wife takes charge of production because, as a woman, she is able to impose close surveillance on the female workers (direct, physical control) as well as set a model of the hardworking domestic partner to keep female workers in line (indirect, control through inﬂuence on mentality). In sum, while the business relations between households were described fully, the structure internal to the household was neglected. These shortfalls were in a way a surprise for me since in my subsequent ﬁeldwork on migrant Indian IT professionals I had ‘naturally’ (as I felt) placed much emphasis on production and gender. In fact, a key argument of my work on India was that unequal gender relations helped to mobilise local resources to produce an IT labour force for the global market at a low cost, which in turn enabled a highly ﬂexible labour market essential to globalisation. I was not following any particular theoretical framework when choosing my approach in either of my studies. What changed my perspective, I guess, was the social context and, consequently, motivation for doing the research. The Zhejiangcun study was carried out at the time (1992–1998) when Chinese society was dominated by an elitist ideology that subscribed to the free-market model (as developed in the West) as the ultimate and only goal for China, while regarding the poorly educated masses as the largest burden on development. To take issue with this discourse, I had to demonstrate the powerful development impetus within Zhejiangcun—a migrant business group made up of precisely such a ‘low-quality population’. Concerned over the simplistic views on the ‘market’ and goals for the Reform, I was eager to show that market was a social construct, and that the networks and reasonings deemed ‘backward’ could be conducive to and even crucial for building up a healthy market system. I was also driven by the desperate need for critiques of state policies and views. In other words, my ideological concerns may have made me more sensitive to Zhejiangcun’s dynamism and success in its overtly visible business activities and in handling the state,

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but it obscured the more silent businesses: the women and the workers turning out Zhejiangcun’s competitive products in cramped workshops behind the scenes. I was preoccupied with refuting idealised versions of market models, but I ignored the pains associated with the market, particularly the inequality between capital and labour, and between men and women. By comparison, the context of the study on Indian IT labour was somehow diﬀerent. Among the dominant discourses at the turn of the millennium are the notions that knowledge has became a key productive factor in itself, that labour relations are not an issue in the ‘New Economy’ and that a ﬂexible job market is necessary for a high levels of productivity. Against this background, I felt it necessary to examine the costs of that ﬂexibility and, thus, paid special attention to the questions of how the IT labour force is produced in the ﬁrst place, why and how one could be hired and ﬁred so ‘ﬂexibly’, who shouldered the cost and who enjoyed the beneﬁt. It may be signiﬁcant to note that my Indian research somehow gave me a more balanced perspective when I returned to look at Zhejiangcun. During a visit in May 2003, I was told that Daxing county, to the south of Zhejiangcun, had set up a special garment industry park and attracted at least 40 migrant businesspeople to set up factories there. This was in fact exactly what I had suggested to Beijing municipality just before the 1995 clean-up; but this time, to the surprise of my friends, my response was diﬀerent. Although it is a step forward that government breaks down administrative boundaries to accommodate Zhejiangcun businesspeople—who still had no Beijing or Daxing hukou—I was concerned with the fact that this is being done only for those who had accumulated enough resources. Indeed, in the same way that successful businesspeople are now welcomed everywhere in the world, the institutional barriers and social discrimination against ordinary migrant workers, including those employed in Zhejiangcun, remain high: the very fact of breaking down the boundaries for a few all too often erects new barriers for the rest. In China, for example, the freer and often government-facilitated mobility of those who succeed in the market has pushed up real-estate prices in big cities across the country, which may make poorer migrants’ lives much harder and may perpetuate their status as a ‘ﬂoating population’. Implicit in my original work too was a call for a more laissez faire policy, whereas I would now

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caution against the danger that the authorities may excessively cater for the business interests of the newly successful at the expense of the (labour) welfare of many others. Apart from all these, there are of course many other shortcomings in this work such as sometimes unclear and undeveloped arguments and a lack of references, which may be far more obvious to an international readership. It is important to mention that the present publication is one-quarter the length of the original Chinese work, and hence is more accurately described as an abridged version rather than a ‘translation’. That having been said, I would like to thank Jim Weldon, who took on the highly time-consuming task of translating sections of the original text and put up with my endless revisions almost as voluntary work. My friend Vani S. oﬀered extremely generous help and her editing gave new life to the manuscript. She also called my attention to problems in my original work, including those discussed above. Lee Li Kheng in Singapore very kindly prepared Map 3 and Huang Yuqin at Beijing University helped me correct the references. I thank Patricia Radder at Brill Publishers for her patience, understanding and support throughout the preparation of the manuscript and Mrs F. E. Derksen-Janssens who has made the excellent English versions of Map 1 and 2. Lastly, I am extremely grateful for the ﬁnancial support of this publication received from the Universities’ China Committee in London, the Oxford University Davis Fund and the Asia Research Institute at the National University of Singapore (where I was a postdoctoral fellow in 2003–2004). My Chinese publisher, Sanlian Shudian in Beijing kindly gave permission for the translation. Xiang Biao Singapore, 2004

ACKNOWLEDGEMENTS

It is no easier to write these acknowledgements than any of the other chapters in the book. Since 1992, my work on Zhejiangcun has been the most important part of my life. Many people have given me assistance through these years. Dr Zhou Yongping, then the head of China’s Social and Economic Survey Centre, was the ﬁrst to encourage me to conduct an investigation of Zhejiangcun. My uncle, Mr He Fengli, and his family oﬀered me crucial assistance in establishing connections with the community. My family gave me unconditional support from the very beginning. After reading my ﬁrst report on Zhejiangcun, Beijing you ge Zhejiang Cun (There is a Zhejiangcun in Beijing), in 1993, Professors Yuan Fang, Wang Sibin, Xiao Guoliang and Dr Liu Aiyu of the Department of Sociology at Beijing University gave me warm encouragement. That report also attracted the attention of Professor Wang Hansheng, who later became the supervisor of my Masters course. She integrated my work into a project sponsored by the Ford Foundation in China. Without her support and guidance, I would not have been able to continue the investigation for so long, let alone produce the present book. Professor Wang Hansheng introduced me to Professor Liu Shiding in the Institute of Sociology and Anthropology at Beijing University, Professor Sun Liping in the Department of Sociology there, and Professor Shen Yuan at the Chinese Academy of Social Sciences. I beneﬁted greatly from discussions with them. Professor Liu Shiding even oﬀered me his apartment for a short stay where I ﬁnished the book manuscript. I also deeply appreciate academic advice from Professor Zhou Qiren at the China Economic Research Centre, Professor Wang Mingming of the Institute of Sociology and Anthropology, Professor Zhu Suli of the Department of Law and Mr Li Meng of the Department of Sociology, all at Beijing University. I am indebted to Professors Ji Xianlin, Fei Xiaotong, Ma Rong, and Pan Nangu at Beijing University, Liqiang at the People’s University of China, Lu Xueyi at the Chinese Academy of Social Sciences, Dr Stephen McGurk of the Ford Foundation, Professor Roderick

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MacFarquhar at Harvard University; Dr Frank Pieke at Oxford University and Dr Wang Xiaoqiang at Hong Kong University for their support and encouragement. Mr Ren Yansheng, Zhu Shanlu and Liang Zhu, who were in charge of administrative aﬀairs at Beijing University; the whole Department of Sociology where I studied from 1991 to 1998; Mr Li Zhijian of the Beijing municipal government; Mr Qian Xingzhong and Wang Yunzheng of the Wenzhou municipal government, all oﬀered me generous support. I am also grateful to the Beijing Public Security Bureau, Fengtai district government, Yueqing municipal government (a county-level city under Wenzhou prefecture) and Yongjia county government for their assistance. Professor Huang Ping of the Chinese Academy of Social Sciences recommended my manuscript to the Sanlian Press for publication. Mr Ye Tong, my editor at Sanlian, read my manuscript closely and gave me detailed suggestions for revisions. I have been pleased to get to know Ms Zhang Li from Cornell University and Mr Jeong Jong-ho from Yale University. They have both also conducted in-depth investigations of Zhejiangcun. I enjoyed discussions with them and I am looking forward to their publications. Lastly, the word ‘gratitude’ is inadequate to express my feelings towards my friends in Zhejiangcun. I spent my Chinese New Year of 1997 with my friend Lin Youfu in his house in Zhejiangcun. He always thinks that I am too thin and insisted on feeding me American ginseng. He cut his ﬁnger when chopping the ginseng, blood spilling over the chopping board and on to the ﬂoor. Li Youfu was rushed to hospital for treatment on New Year’s Eve, while I was instructed to stay in his house to watch TV because Lin did not want my New Year to be spoiled by this. This is only one small example among many others of the kindness I found there. Migrants like the Zhejiangcuners are the people who are moving our society forward. I am only an incompetent recorder of their practice. It will be my life’s mission to become a better recorder of people like them. Xiang Biao Beijing, 1998

INTRODUCTION

Migrants in China whose mobility is not mandated by the state occupy a special position and are a particular source of anxiety to government: they are undergoing not just a change of residence, in doing so they are also disengaging from institutionalised state control and support. Because the administrative system in contemporary China is still highly territorialised—that is, it is delimited by rigid jurisdictional boundaries between urban and rural areas, and between provinces and municipalities—spontaneous transregional migration presents a serious challenge to the authorities. Spontaneous migrants are no longer integrated in the established social system and have therefore become a ‘ﬂoating population’,1 a special social category that now involves a major part of the population. Among various patterns of migration and settlement, squattersettlement style migrant communities are particularly worrying for Chinese urban authorities and society. Zhejiangcun (literally, ‘Zhejiang village’), a migrant community concentrated in Nanyuan township, ﬁve kilometres south of Tian’anmen Square in Beijing, is the biggest such settlement in China. It acquired this moniker when the pioneering groups had identiﬁed themselves as from Zhejiang province— few Beijingers had heard of Wenzhou prefecture where the majority of the migrants are from, about 1,600 kilometres away from Beijing, in Zhejiang province, southeast China. Originating with six peasant families who moved to Beijing in 1984, Zhejiangcun in 1998 was home to nearly 100,000 migrants, all specialising in garment production

1 Until recently, the term ‘ﬂoating population’ (liudong renkou), used principally in oﬃcial documents and research papers, referred to anyone making a journey. After a sudden shift in policy initiated by Premier Li Peng in the late 1980s to calm down the alleged overheating in the economy and strengthen government control over the private economy, many construction projects were put on hold and great numbers of migrant workers were laid oﬀ. Enormous ﬂows of jobless migrants then ‘journeyed’ from one city to another looking for work and the popular concern caused by these ‘ﬂoating populations’ gave the term a new meaning associated with this phenomenon. Central to the widespread anxiety regarding ﬂoating populations is the knowledge of the reality that there are no institutions or policies for their regulation.

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and trading. By the end of 1994, the locality boasted 16 large wholesale marketplaces developed by the migrants themselves, and had become (and still is) a supply centre for low- to medium-priced clothes for the whole of north and northeast China. Hardly surprising, then, that Zhejiangcun soon became something of a cause célèbre in Beijing, and later in China as a whole. As an internal report of the Beijing municipal authorities described: “Some Beijingers may not have heard of Nanyuan township, but there is hardly a single person who does not know of Zhejiangcun”. Indeed, regular migrant clean-up campaigns launched by the Beijing municipal and central governments could not eliminate the community, but only succeeded in normalising, if not improving, various survival tactics and arrangements for a quick escape and an equally prompt regrouping once the ‘typhoons’ died down. Without the beneﬁt of any formal administrative supports, this predominantly Wenzhou migrant community established a market niche, developed their own service networks and even mobilised collective actions to protect their business interests against state interference. This study oﬀers an ethnographic account of how all this happened. The study shows that Zhejiangcun, as a compact community, was the conspicuous peak of a much larger phenomenon of Wenzhou migrant business networks across the country. Garments produced in Zhejiangcun were sold all across China by Wenzhou migrant traders; leather and light textiles were imported from Wenzhou traders in Hebei and Zhejiang provinces; business capital was mobilised and often managed from hometowns in Wenzhou; labour was recruited from rural areas of neighbouring and other provinces including Hubei, Anhui and Hebei, mostly via specialised agents in Wenzhou; and business disputes, particularly those involving long-distance business deals, were often mediated through circles of family and friends centred in Wenzhou. Thus, Zhejiangcun was more than just a translocal migrant community linking Wenzhou as the sending place and Beijing as the receiving society. The common practice of many Wenzhou migrants to move on from Beijing—either to set up new outlets or in search of better returns elsewhere—also meant that they were constantly extending their own networks in all direction. Paradoxically, the nationwide expansion of business networks was accompanied by and achieved through a process of intensiﬁcation of networking within the community in Beijing. The relationship between these two processes threads the continuing story of Zhejiangcun together.

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This study outlines how the Wenzhou migrants’ spontaneously expanding and intensifying activities transcended the geographical, social, administrative and ideological boundaries that have served as a vital prop for the established social order in contemporary China. This is precisely why, in freeing Zhejiangcun from administrative interference and enabling the migrants to mobilise and manage resources across boundaries on a national scale, their business hub in Beijing had been able to persist and thrive. This aspect of ‘taking root’ by ‘transcending boundaries’ also exposed the severely fragmented jurisdictions of the various territorialised authorities within the Chinese system of government, and made the development of such a large migrant community in the capital city of some concern for the state. Within the ambit of its activities, Zhejiangcun had begun bringing about a new relationship between state and society in China. As an historical account of Zhejiangcun, this study is an ethnography of the interactions between the Wenzhou migrants, the state and urban society rather than that of a discrete community; of processes and changes in unbound and ever-evolving social relations rather than that of human connections within set limits or static structures. In sum, this is an ethnography of tension, of dynamism and of ﬂuidity. My immediate purpose in writing this account is to document the history of Zhejiangcun, but this also aims to address some larger popular concerns in today’s China. In the 1980s, a well-known reformist experimented unsuccessfully with a new management system in a famous university. He then proceeded to announce publicly that the failure was due to the low ‘suzhi’ (quality of person) of the university staﬀ. I remember his statement well because of its peculiar reasoning: a poorly received scheme for reform, unlike a work of art, could more likely be attributed to the policy makers’ inadequate understanding of the reality, and could hardly be blamed on the target group. However, this reformer’s logic was one that has come to dominate public perception in China. The alleged low suzhi of the Chinese population has continually been used as a convenient explanation for all sorts of problems and oﬃcial failures, engendering a sense of pessimism and even despair about our future. Against this discourse, my study of Zhejiangcun demonstrates that even a group of rural-urban migrants, the archetypical ‘low suzhi’ population, can create a vibrant economy against all the odds, armed with little more than perseverance and ingenuity. The creativity of such

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entrepreneurial migrant populations is surely a vital source of lessons for the development of the entire Chinese society. Of course there were many problems with Zhejiangcun, but the cause of most of those problems lay with the failure and inadequacy of state policies and authorities to recognise and accommodate the migrants’ eﬀorts and satisfy their needs for regulatory supports—rather than with their allegedly low suzhi. Pitted against the Chinese discourse of suzhi, there is the idealised vision of bringing about an ‘advanced society’ in China. It would seem critical to acknowledge that such a vision is modelled on the achievements and experiences of the most developed countries in the West. Therefore, it would be diﬃcult indeed to imagine that this alien ideal could be fulﬁlled anytime soon in China—so diﬃcult, in fact, that the entire population must be blamed for being the wrong quality of people. A central component of this vision of the future sees a ‘modern market system’ (xiandai shichang zhidu) as the panacea for almost all the problems in China. Such notions are appealing often because they are unrealistic: thus, a ‘modern market system’ is seen as the ﬁx-all solution, exactly because it is what China does not have. Moving away from this preoccupation, this study of Zhejiancun shows that the institutional arrangements for a market system can only emerge step by step, and will have to draw upon what China does have—a large population, low incomes, low levels of technology, complex state regulations and so on. Certainly, knowing what a modern market system should look like on paper would help, but understanding the processes of markets that are emerging from the soil of China is far more essential and urgent. Rather than coming about, as the market myth would have it, by the application of a series of abstract principles of production and trade, the case of Zhejiangcun forcefully demonstrates that the emergence of a market system may require a redeﬁnition of the relationship between state and society which will have far-reaching social and political implications. Along with these concerns, my study focuses on two groups of actors: the spontaneous migrants and the state. The interaction between the internal organisation patterns of the Zhejiangcun migrants and the actions of government frame the study. In the remaining part of the Introduction, I brieﬂy situate Zhejiangcun in Beijing with reference to two maps. Then I discuss the key analytical tool of this work, the guanxi (personal connections) perspective and the central

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concept of xi (clusters of connections), both of which I adopted from the migrants themselves in order to understand their internal relations. Following that, I describe how internal relations in Zhejiangcun changed over time, speciﬁcally in interaction with and inﬂuenced by the state. Lastly, I report on my research methodology and process.

The study area Zhejiangcun is situated in Fengtai district (qu), in the south of Beijing municipality. As shown in Map 1, Zhejiangcun is by no means the only concentration of migrant population in Beijing: there is an ‘Anhuicun’ to the north, a ‘Henancun’ to the east, several ‘Xinjiangcun’ to the west, and other mixed migrant communities scattered throughout the city. Nor is Zhejiangcun the only concentration of Wenzhou migrants in Beijing. Around 1990, apart from Zhejiangcun in Dahongmen, another four communities also involved in the apparel industry congregated in Beijing: at Shawo (to the west of Gongzhufen, around the Great Bell Temple) and at Wudaokou, both in Haidian district, and in the vicinity of Dajiaoting and Jinsong Dongkou in Chaoyang district. Another small community of Wenzhou migrants formed around Gucheng in Shijingshan district in 1993. There are also a number of Wenzhou migrants located outside of these communities all across the city, such as those trading in hardware and electrical goods in the area around Qianmen, Tianqiao, Dongdan and Xisi; those dealing in electrical components in Zhongguancun and the area around Xisi and Chongwenmen; and those selling shoes and children’s clothes around Shazikou in Chongwenmen. In fact, almost every city in China has a community of Wenzhou migrant traders and settlements known as ‘Zhejiangcun’ or ‘Wenzhoujie’ (‘Wenzhou street’), most notably in Lanzhou, Shijiazhuang, Taiyuan, Kunming, Chengdu and Shaoxing. Wenzhou communities engaged in related businesses across the country are known to foster close connections with each other, so while two Wenzhou natives living in Beijing and engaged in diﬀerent businesses may well have no direct links with one another, they would be likely to have close ties with compatriots dispersed across diﬀerent parts of the country. As we can see from Map 1, with the exception of the two Xinjiang communities, almost all the large migrant communities are located

Map 1. The location of Zhejiangcun and other migrant communities in Beijing

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at the boundaries between urban and rural Beijing. Zhejiangcun, for example, straddles the urban street divisions ( jiedao) of Dahongmen street committee and Yangqiao street committee and rural Nanyuan township (xiang or zhen). The reason for this is that in such transitional zones the state tends to be weakly deﬁned. In urban areas, administrative control is exercised by work units and street and residents committees; rural areas are constituted by towns/townships, administrative villages (or villagers committees) and natural villages, in descending order in the administrative hierarchy. People living in urban areas are oﬃcially registered as ‘residents’ ( jumin) and those in rural areas as ‘peasants’ (nongmin). Thus, ‘residents’ and ‘peasants’ become two distinct categories of social status that entail diﬀerent rights (for example, ‘residents’ were, in theory, guaranteed waged employment but ‘peasants’ were not). In the transitional areas, rural and urban administrative systems become confused and administrative functions are often blurred. For example, a Beijing resident at house Number 1 within a particular street area of Zhejiangcun may be employed in a work unit under the purview of the street committee, whilst his immediate neighbour may still be nominally a peasant (regardless of the fact that ‘peasants’ in such areas may have had no involvement in agriculture for many years) and hence come under the purview of the rural administrative authorities. Within the same family even, it is possible that the father could be classiﬁed as a peasant and his daughter as a resident. This ‘messiness’ has resulted in a situation where the respective authorities often attempt to pass oﬀ their responsibilities to each another. For example, when a local household comprising both residents and peasants took in a migrant family as tenants, neither the residents committee nor the village committee could be bothered to make a record of this. And when public order in Zhejiangcun deteriorated in the mid-1990s, neither Nanyuan township government nor Dahongmen street committee saw it as their responsibility to do anything about it. Even if the oﬃces of the residents and village committees are in the same compound (which is the case in a few village administrations in the area of Zhejiangcun), they would still have almost nothing whatsoever to do with one another. This would often lead to an administrative void in the rural–urban boundary zones that, of course, created much unfettered space for spontaneous migrants.

Map 2. The expansion of Zhejiangcun (1984–1998)

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Map 2 oﬀers detailed information about the compass of Zhejiangcun, and shows its expansion in four phases (Arrows 1–4) from 1984 to the period after 1995. By 1995, Zhejiangcun straddled approximately 26 natural villages with a local population totalling 14,000. The heart of Zhejiangcun was formed by the four natural villages of Shi, Deng, Ma and Hou, all falling under the jurisdiction of Shi administrative village. Between 1984 and 1988 (Arrow 1) when the ﬁrst Wenzhou migrants arrived in Beijing, they congregated in the area around Ma and Haihuisi villages; from there, the community expanded in the direction of urban Beijing. This expansion took place spontaneously as migrants moved to places within easy commuting distance of the central commercial areas, particularly after traders starting leasing retail counters in state-run shops downtown. The expansion of Zhejiangcun between 1988 and 1992 (Arrow 2) was, ironically, the result of government clean-up campaigns to drive the migrants away. ‘Running away’ each time, the migrants often moved southwards, away from the city, where some decided to stay put rather than return after a campaign blew over. The years between 1992 and 1995 (Arrow 3) saw the unparalleled expansions of Zhejiangcun, eastwards and southwards. There were three main reasons for this: the growth of the migrant population; the cumulative outcomes of moving south to evade the clean-ups; and the construction of a number of large residential-cum-production compounds in Jiujingzhuang village by some of Zhejiangcun’s ‘big players’ (darenwu). The expansion after 1995 (Arrow 4) occurred in the wake of Beijing government’s big clean-up (daqingli ) to demolish all residential compounds in Zhejiangcun. Yet again, instead of reducing the extent of Zhejiangcun, this became the impetus for further expansion, this time westwards, where Yangqiao street committee, in looking to open economic opportunities in its area of jurisdiction, had opened up a neighbourhood to accommodate the Zhejiangcun businesspeople ousted from Danghongmen street. With these expansions, the migrant population of Zhejiangcun no longer originated just from Zhejiang province. Of the nearly 100,000 migrants in 1998, I estimated that over 50,000 were business owners and their families from Zhejiang province: some 75 per cent from Yueqing county and a further 20 per cent from Yongjia county, both in Wenzhou prefecture, while the remaining 5 per cent came from other prefectures in Zhejiang. The other half of the population comprised their employees, who were mainly from Hubei, Anhui and Hebei provinces.

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The case of Zhejiangcun raised many questions: how had peasants with minimal resources been able to create such a robust economy, and in the midst of a hostile environment? How had they managed to mobilise resources and spawn business networks across the country? Why had the government’s repeated eﬀorts to eliminate Zhejiangcun failed? To address these questions, I set out to understand how the migrants in Zhejiangcun had developed their (social) relationships— of which their economic activities were a part and not something imposed from outside—by adopting a perspective intrinsic to their everyday life and the resilience of their community ‘system’.

‘Community’, ‘ boundaries’, guanxi and xi Informed by my training in anthropology at Beijing University, I had started to undertake my ﬁeldwork in Zhejiangcun in 1992 as an exercise in community research. This approach in Chinese social anthropology can be traced to the introduction in the 1930s of the concept ‘shequ’, a translation of the English word ‘community’. Prior to this, the term did not exist; it was coined by Fei Xiaotong and his fellow students in their translation of the lectures delivered by Robert Park in the early 1930s (Yanjing Daxue Shehui Xuehui 1933, see Beijing Daxue Shehuixue Renleixue Yanjiusuo 2002: 229). In 1936, Wu Wenzao, a leading Chinese sociologist and anthropologist, had told Malinowski that he wanted to found a ‘Chinese Social Studies School’ with functionalism as its theoretical basis and community research as its basic methodology. Wu (cited in Wang Mingming 1997: 30–31) explained: Society is an abstract concept that describes collective living, a general term that covers the entire system of complex social relationships. Community, on the other hand, is a speciﬁc term for the reality of the lives of the people in a particular location, it has a material basis and it can be observed.

Similarly, Fei Xiaotong (1985: 94) held that anthropology: takes the overall form of the social structure as the subject of its research, yet this subject cannot be something generic but must be a speciﬁc community, because what links up a social system are the lives of its people. Those lives have a deﬁnite location in time, and that is what a community is.

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Therefore, the concept of community carried four implied meanings: it is something that forms a structural whole; it is functionally selfsuﬃcient; it has deﬁnite boundaries; and it is a microcosm of the larger society. Following this research tradition, I had set myself two basic tasks at the early stage of my investigation. First, to sort out and classify diﬀerent types of social roles, stable relationships and social rules within Zhejiangcun; and second, to ﬁnd out how these various roles were interlinked through relationships and mediated by rules to make the community an organic and coherent ‘whole’. I took Fei Xiatong’s (1986) Jiangcun Jingji (‘Peasant Life in China’) and Whyte’s (1981) Street Corner Society as my main points of reference at the time. Whenever I met someone, I sought to ascertain what position s/he occupied in a system of roles within Zhejiangcun; what signiﬁcance his/her actions had in terms of the structure of the community (how it was determined by and in turn reinforced that structure). To begin with, this enabled me to quickly arrive at an overview of Zhejiangcun. But, as my relations with the migrants reached deeper levels—to the point that I was called upon to help resolve disputes—I came to the realisation that not only were the positions I had assigned to certain people often incorrect, but that it was in fact almost impossible to give them any simple places in a system. Assigning them a position based on some set criteria more often than not failed to accurately reﬂect their actual behaviour and motivations. My eﬀorts to work out how diﬀerent parts in the community formed a whole ran into even greater diﬃculties. I could doubtless have written papers claiming that the various parts of the community were tightly combined, but I could not prove that the integration between the parts was inevitable; in other words, I could not explain satisfactorily why these parts must integrate into a whole. A large part of the economy and everyday life of Zhejiangcun actually relied on the world outside the community. Rather than any inevitably occurring internal integrity, the feature of the community that stood out clearly was the necessity of its openness to the outside world. I then realised that the reason that neither the traditional concept of community in particular, nor the holistic approach of functionalism in general, could be usefully applied to my research in Zhejiangcun because, to a large degree, both relied on the delineation of boundaries. In order to demonstrate the integrated nature of culture, for example, Malinowski paid particular attention to the comprehensive

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description of small-scale societies with clear boundaries. The emphasis on boundaries—beyond merely physical extent—also reﬂects the basic idea that a particular group will form a closed, self-suﬃcient organic whole. But, as I found out, by merely observing Zhejiangcun itself as a bounded community, I was not able to discern its internal relationships clearly. Additionally, classical community research emphasises the description of stable structures within communities, but the social relationships in Zhejiangcun were highly ﬂuid and constantly changing. The idea that society is essentially a structure composed of a series of positions or roles was, thus, not helpful in understanding everyday life in Zhejiangcun. I ﬁnally resolved my perplexity by distancing myself from the concept of community and returning to some traditional Chinese perspectives. Traditional Chinese metaphysics, for instance, also held to a holistic perspective, with the signiﬁcant diﬀerence that the Chinese view emphasises that parts are universally related and interdependent. Most importantly in the Chinese perspective, while diﬀerent parts may form dialectic systems through interrelatedness, they do not necessarily constitute any real entity. For example, yin and yang or heat and cold are mutually related and derive their identities in opposition, without necessarily forming an entity within deﬁnite boundaries. The Chinese understanding of boundaries is inherent in conceptions of everyday life, as seen in such phrases as liwaiyoubie (distinguishing the inside from the outside). But the existence of a boundary between inside and outside does not mean that what is inside will form a distinct self-contained entity. Rather, it emphasises that inside and outside are diﬀerentiated from one another but exist in a context of interdependence. Fei Xiaotong’s (1985) concept of chaxu geju (a pattern of diﬀerentiation) makes clear how inside and outside are relative terms: if a circle representing this pattern of diﬀerentiation is extended, what is outside the boundary then becomes inside; likewise, if the circle contracts, what was inside may become outside. Most important to this understanding is the dynamic underpinning this expansion and contraction, not any sort of immutable boundary. Zhejiangcun ﬁts this perspective particularly well: a community that formed from nothing (that pre-existed), then grew from small to large, was driven in diﬀerent directions and dispersed by government campaigns, and successively regrouped. Seen thus, the history of Zhejiangcun is best conceptualised as a process whereby a dynamic system of relationships expands, contracts and constantly re-forms.

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In fact, the core perspectives in traditional Chinese thinking (which were also basic to the way my informants viewed their lives) urged me to go deeper into the internal dynamism of the migrants’ relationships and motivations ﬁrst, rather than take concepts such as community as my starting point. The guanxi perspective If we see Zhejiangcun as a dynamic system, what then are the fundamental factors determining how this system is formed and functions? When Zhejiangcun informants were asked to talk about their life histories—how they conducted their business, how they escaped from government clean-ups, how they left poverty for wealth and how some were wealthy but become poor—the core concept organising their narratives would be guanxi or connections.2 The emergence of the big players or darenwu, major ﬁgures that came to command respect and social prestige in Zhejiangcun, is one example of how relationships in Zhejiangcun were structured by the migrants’ management of guanxi and, how this in turn determined Zhejiangcun’s internal dynamism. Big players, for the most part, were the owners of marketplaces and residential compound developments, and, without exception, all men. These men were not necessarily the richest individuals in Zhejiangcun, nor did they have the best connections with government oﬃcials, compared, say, to many big traders who leased out large retail spaces in downtown department stores. The owners of the residential compounds and the markets were considered darenwu because of their wide connections within the community, and both had to be able to mobilise suﬃcient numbers of tenants to take up leases in their developments. Thus, only those with wide circles of

2 It is still a prevailing assumption that guanxi is a uniquely Chinese perspective. In line with this, in much existing literature, guanxi itself is made an object for analysis and attempts to make sense of it, for example, have seen it as a special social capital or attributed it to a special political environment. Guanxi, doubtless, embodies certain special features of the everyday behaviour of Chinese people, but more to the point, it is a discourse and social tool for understanding and interpreting social phenomena. It is Chinese folk social theory: should someone fail in an enterprise—regardless of what the real cause might be—their ﬁrst reaction will often be ‘there must have been some guanxi that I didn’t handle properly.’ I thank Dr Frank Pieke for bringing this point to my attention.

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inﬂuence and connections could venture into these businesses, and their success in these, in turn, consolidated their circles of inﬂuence in Zhejiangcun. The inﬂuence of big players was therefore built on the operation of social connections in everyday life rather than on the possession of particular special resources such as wealth or property, or connections with oﬃcials per se. By contrast, Chen Cunsheng, a major businessman, was well known as having the best connections with government oﬃcials, but lacked popular prestige. Even though the migrants frequently asked him for help in dealing with the authorities and paid him for his role, to many he was earning ‘black heart money’ (heixin qian). This guanxi- or connection-based authority of big players was inherently linked to the dynamic of expansion and contraction in the Zhejiangcun ‘system’. First, big players were beneﬁciaries of the expansion of the migrants’ business system, but also played a role in facilitating that expansion. Suppose a Zhejiangcun trader and a Wenzhou business person in Chengdu, Sichuan province, wanted to conclude a large business deal, they would often get one of the big players to act as middleman to avoid the possibility of any swindling. By so acting as a witness, and if necessary as an arbitrator in any disputes, the big player empowered the expansion of Zhejiangcun’s business networks and, at the same time, enhanced his own inﬂuence and standing. Second, during government clean-ups, Zhejiangcun often contracted, and sometimes nearly disappeared. In these instances, big players were not in a position to organise any collective resistance to prevent this or keep Zhejiangcun physically intact since their inﬂuence was based on their networks of connections, while their authority was not at all institutionalised. For example, during Beijing government’s big clean-up and demolition of the migrants’ residential compounds in 1995 and their subsequent comeback and re-population, the two decisive actors in that drama were the government and the ordinary Zhejiangcun migrants. The big players’ connection-based authority had not even enabled them to protect their own investments, but their status turned out to be resilient; even when the resource they controlled—the residence-cum-production compounds—was demolished, their standing in the community remained as it had been. Moreover, precisely because of their connections, they were able to quickly redevelop new residential compounds. So, what exactly are these guanxi connections? Put simply, the term refers to the personal connections between individuals. But guanxi

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should not be conﬂated or confused with what are commonly termed ‘networks’. The guanxi perspective emphasises individual actors’ understanding of their interpersonal relationships and their strategies for employing them. For example, one of the main reasons that the Zhejiangcun economy was able to drive and plug into the nationwide linkages between Wenzhou business networks is the belief of businesspeople that if you stay in a partnership for a long time “you’re bound to fall out”, which meant that they constantly sought out new partnerships in new locations. Another example concerns the big player, Liu Shiming. When the compounds were demolished and the migrants driven out in the big clean-up of NovemberDecember 1995, Liu Shiming had leased two apartment buildings in Yanjiao town, Hebei province, to rent out to those who had been tenants in his compound in Zhejiangcun. He had already planned to rebuild ‘Zhejiangcun’ in Yanjiao, but, unexpectedly, in early 1996, all the tenants moved back to Beijing once they received news that the crackdown had blown over. Liu Shiming accepted heavy ﬁnancial losses rather than persuade his family and friends to stay behind in the apartments. He believed that if he overdid his use of connections for a short-term beneﬁt, he would undermine his ability to sustain and employ those connections over the long term. A third example is how Liu Dong, the son of Liu Zebo, the ‘founder’ of Zhejiangcun, and himself a trader selling garments in various large stores, oﬀered his ‘Chinese New Year’s greetings’ of gifts and cash to individual Beijing shop managers and government oﬃcials. Liu Dong understood each connection diﬀerently in terms of advancing his business interests and, thus, made diﬀerent presentations as part of maintaining his business guanxi. These actors’ perceptions and strategies could not be approximated by using the conventional concept of networks. Guanxi should therefore be seen as a social tool created by people involved in the process of constructing their social life. From a guanxi perspective, structure is the emergent consequence of actors’ manipulations of connections as well as being subject to the connections. Such units as household or community, where the loci of certain relationships are concentrated, were themselves embedded in larger networks. Thus the guanxi perspective sees individuals inextricably set amidst their relationships with others. The Chinese word beijing, usually translated as background, may serve to illustrate this point. In the Chinese conception of beijing, a person’s history, including family origin, educational attainment and career track does

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not ﬁgure, nor is it held as important or relevant. The Chinese usage of the term refers to an individual’s set of guanxi. In Zhejiangcun, for example, those with close ties to big player Liu Shiming would be said to ‘have background’ ( you beijing). The same was believed of Fu Tianlang, another big player, who had connections with a deputy president in the Chinese people’s political consultative conference (CPPCC), as well as with the street gang that he formerly belonged to. Background is described in terms of its thickness (hou), so the common expression ‘mouren de beijing hou’ (‘so and so’s background is thick’) meant that that person has a lot of guanxi. In the Wenzhou dialect, it is often simply said that someone’s ‘back’ is thick (mouren de bei hou), as if beijing was something that grows onto the actor’s body: the person and their relationships made up the ‘whole’. In a certain sense, it could even be said that there are no clear boundaries between an individual and the collective—both are set within and are comprised of a series of relationships. Since the guanxi perspective takes interpersonal connections as the basic analytical unit, it is the relationship between diﬀerent connections that becomes a focus for examination and gauging motivation. It was self-evident to the Zhejiangcun migrants that their relationship with another person should always be carefully understood and managed in relation to their connections to many others. In other words, when one is interacting with another, one is not only facing that individual, but also dealing with their beijing in relation to one’s own connections. Relationships were not simple linear connections between two individuals; relationships were essentially viewed and acted upon as managing ‘clusters of relationships’. The concept of xi In Zhejiangcun, the key question for the migrants in their business dealings as well as everyday life was how to manage the relationships between their business contacts and their circles of family and friends. Each household or individual3 had a relatively stable social

3 Women in Zhejiangcun normally did not have their own xi because few had their own business circles. They were, however, instrumental in managing their husbands’ circles and cultivated, nurtured and maintained the social networks that formed the basis for almost all trading activities. Many cooperative business relationships worked through women, for example, between a woman’s husband and

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circle of family and friends (qinyouquan) and business circle (shengyiquan). These two circles were interlinked through that household or individual, and relationships in one circle were often managed through acting on the other. In this sense, the two circles formed a system of ties or ‘xi’, the basic unit through which migrants organised their everyday life and their business dealings, and where most conﬂicts likely generated. Among the Zhejiangcun migrants, the social circle in a xi consisted of four main types of connections: kinship; peer groups from the same native village or school; former comrades in arms during the factional ﬁghting of the Cultural Revolution; and friendships that grew out of longtime business dealings. The other sub-xi, the business circle, mainly comprised partners and customers in business. These two sub-xi, the social and business circle, overlapped where family and friends were also partners in business, and these constituted the most important relationships in a person’s life—I call them the ‘core xi’. At this point it must be emphasised that xi are not merely the overlapping of diﬀerent circles or connections, but are formed by the interaction of these diﬀerent connections. The importance of the ‘core xi’ stood in functioning to coordinate interactions between the circle of family and friends and the business circle to achieve a desired outcome in social relations and resolve conﬂicts. Much literature has emphasised how economic activities are related to broader social relationships, as represented by the notion of ‘embeddedness’ (following Polanyi 1944, 1957). What was seen in Zhejiangcun, however, is not just the ‘embedding’ of business exchanges in social relationships but, rather, a separation of spheres or circles associated with each of the two types of relationships as well. What is important, then, is the tension between the overlapping and separation of spheres, or between embedding and dis-embedding (deliberately distancing one type of relationship from others). There were two central aspects to this functioning of xi in Zhejiangcun. First, the migrants used their social circles to develop business relationships. For example, when the trader Yao Xin’an experimented with consignment

her brother; cooperation between two brothers was less common and usually far less stable. In general, women (and particularly married women in their forties and ﬁfties) were thought more trustworthy and more skilful in managing interpersonal relations than men and, in Wenzhou, they played crucial roles in the nationwide factor market networks for ﬁnance and labour.

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selling (daixiao), his business connections were drawn from his social circle. Only after he had enough experience trading in this way did he establish business connections with migrants outside his social circle. And when Russian traders came to Zhejiangcun workshops to place very large orders for leather jackets, producers developed new business connections by using their family and friends to subcontract work out to other producers. Circles of family and friends were also instrumental at the early emergent stage of the nationwide Wenzhou migrant business networks. The long-distance cooperation between the Lian brothers, one in Beijing and the other in northeast China, who in 1994 shifted a large volume of overstocked outdated jackets from Beijing in markets in the northeast, pointed out that this could not have been contemplated had they not been brothers. It is literally an everyday practice that people establish new business connections in the community through connections with family and friends. A second crucial aspect of the functioning of xi was in using circles of family and friends to ‘lock down’ business relationships, that is, as the means to penalise or redress the actions of other parties, if deemed necessary. This was how the trader Li Wenhu dealt with a business dispute. In 1996, Li Wenhu paid the JDQFC Cloth Market the rent for a pitch in a particular location when the shareholders were recruiting stallholders. He did not bother to ask for a receipt: “Gao Jianping’s [the market owner] brother-in-law is my cousin, what was there for me to worry about?” Later, however, Fu Jiatian, Gao’s partner, changed the location of Li’s stall. Li phoned all his friends to spread this news as widely as possible. “You know Fu Jiatian as well. If he really wants to be ‘unreasonable’ about this, there’s not a lot else I can do”, he told them, implying that he might have to take tough action against Fu. These friends called Fu, to point out that this was not right, and some even upbraided him for his wrongdoing. Fu Jiatian was quick to contact Li Wenhu and talk the matter over, and paid him a fair-sized sum in compensation. Those successful in business in Zhejiangcun often had many friends and relatives with whom they did not do business directly, but used as strategic support in their business dealings with other people. Thus, Liu Shiming was very particular about maintaining a balance between his social and his business circles. When he engaged in a new business, he would be sure to have his relatives involved to some extent. For example, when he was making leather jackets at the end of the 1980s, if ever he got hold of a new design, he would share it with

introduction

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some of his relatives; sometimes he would deliberately ask them to pick up a sample that he intended to copy, so allowing them to keep abreast of the latest fashions as well. He held strongly to the view that one’s circle of friends and family should share a broadly similar economic capacity in order to foster the internal solidarity of the circle, which, again, would be important for his success in engaging in large business deals with others in the future. Thus, Liu’s helping his relatives could be seen as an indirect investment in his own business prospects. It is precisely because people used their social circle to keep their business circle in check that the two circles needed to be separate. Too much overlap made family–friend relationships susceptible to business failures and therefore reduced the circle’s ability to ‘lock down’ business partners in the future. For the Zhejiangcun migrants, preventing business relations from jeopardising a priori relationships between friends and family was as important as using the relationships to open a path for business activities. As will be seen in the cases of money borrowing and ﬁnance associations, people very carefully calculated a balance between their family and friendship connections and their client relationships for an optimal combination of personal trust, rules and clout. Because the xi of individual households overlapped, thus linking households in Zhejiangcun to each other, Zhejiangcun functioned as an ever-expanding business system: newcomer households could join the garment business easily and new business connections could be established quickly through overlapping circles of family and friends; in turn, new business partners could bring in new connections of family and friends, and so on. Based on the overlapping of diﬀerent xi, the migrant community had evolved in a ‘horizontal’ manner, expanding rapidly in both physical extent and business reach, and without a concentration of wealth in a few hands or any obvious hierarchical structure. As a corollary to this, big players achieved their inﬂuence by drawing together diﬀerent xi, which made the scope of their connections wider than most people; they did not, and could not, however, exercise authority over any particular individual. Since business activities and everyday life were based on interlinking xi, the migrants were able to ‘run away’ from government clean-ups, and continued their business through mobile networks while they took refuge elsewhere. The guanxi perspective and the concept of xi may have more

20

introduction

general relevance in understanding other social phenomena where relationships are ﬂuid and activities transcend established boundaries, as is increasingly common in ﬂows of population and resources in the context of globalisation. When I say that the conventional concept of ‘community’ (or Marxist and functionalist analyses for that matter) is limited, I am not saying that it has no application for understanding everyday life in Zhejiangcun. For example, the fact that there were no strict lines of vertical authority in Zhejiangcun was, in the ﬁnal analysis, because the ownership of the means of production was highly dispersed, and because the vast majority of the migrants had easy access to capital through a range of active popular ﬁnancial institutions. This accords with Marxist analysis. But the concept of xi shows speciﬁcally why the ownership of those means of production had not become concentrated in a few hands; likewise the access to, or ﬂows of, capital. The guanxi perspective provides a clearer grasp of the conﬁguration of this ﬂuid society and the trajectory of its changes. To summarise, in opting to adopt and develop traditional Chinese notions such as ‘guanxi’ as academic tools in my study, I also hope that the rich and unique modes of practice and ways of understanding society in the course of 50 centuries of civilisation in China may enable analyses of other more general social realities, as well as therefore contributing to the theoretical resources of international anthropology.

Xi, the state and the history of Zhejiangcun The management of overlapping household xi central to the internal workings of Zhejiangcun was extremely responsive to external factors. Importantly, xi were managed in order to grasp business opportunities in the larger market, and in Zhejiangcun these had been developed largely in response to possibilities within formal institutional set-ups and policy regulations. The internal structuring of xi in response to various local-authority and government initiatives in this study could be summarised as evolving in ﬁve distinct phases. Although the ﬁrst Wenzhou families had arrived in Beijing in 1984, their spontaneous migration was a continuation of earlier migrations. In this sense, the ﬁrst stage in Zhejiangcun’s development, dating from the late period of the Cultural Revolution to 1986, had spanned a period that witnessed one of the most dramatic policy

introduction

21

changes in China after 1949: the ﬁnal ending of the Cultural Revolution with the beginning in 1978 of the era of ‘Reform and Opening’ (gaige kaifang). Nevertheless, they had not been signiﬁcant determinants of the migrants’ behaviour. Rather, it would seem the case that policy changes belatedly sanctioned what had already become the reality. When state policy allowed for the revival of markets in small towns, the Wenzhou migrants had already moved on to large cities to explore opportunities to do private business; they were always one step ahead and, hence, always ‘illegal’. Their key strategy in side-stepping the state was ‘evasion’ (taobi ), namely avoiding contact or confrontation with the state as far as possible, most vividly manifested by their roadside guerrilla tactics of hawking clothes from (unlicensed) makeshift street stalls, while always on the ready to run from the authorities. Strict state controls and their very limited resources at this initial stage made the migrants rely on, and conﬁne themselves to, their traditional household-based family and friendship circles in making migration choices and conducting business. There was no business circle or connections independent of those of family and friends. Within one circle of family and friends, all the households engaged in the same business in a similar manner, purchasing cloth together, producing the same kinds of garments and selling their products in the informal economy, by simply setting-up by the roadside. The second stage started in 1986 when Zhejiangcun migrants were able to enter the formal retailing economy by leasing counter space in state-run shops and department stores downtown. The policy measure that enabled them to do so was not designed for this purpose at all, but on contrary, was aimed at making state-owned stores more competitive in the face of the fast-growing private retail sector in post-Reform China. But when store managers were given more autonomy to source their goods independently, Zhejiangcun traders quickly formed alliances with them to exploit the new schemes to the beneﬁt of both parties. Selling garments in formal stores, including private shopping centres, was far more stable and proﬁtable, but also required larger production outputs and a higher quality of merchandise. This led to a division of labour between those leasing retail space (traders and their households) and those making clothes (producers and their households). These two groups were linked through arrangements for consignment selling, the earliest kind of business partnership within Zhejiangcun. Increasingly, as business partnerships were developed

22

introduction

outside the traditional networks of family and friends, there was a diﬀerentiation as well as overlap between the business and social circles; this was the earliest form of ‘xi’—separate yet interlinked business connections and family–friend relationships. Xi-based consignment selling was critical to the success of the migrant businesspeople at this early stage because it minimised the amount of cash outlay needed for both production and trade. Thus, garments from Zhejiangcun entered the market at extraordinarily low prices. Consignment selling also encouraged timely exchanges of information between traders and producers. The success in doing business in this way also prompted new migration chains, bringing large numbers of people from Wenzhou to Zhejiangcun. The consequent increase in the migrant population of Zhejiangcun was completely unexpected by government and, beginning from 1986, the local authorities (normally initiated and led by the district public security bureau) launched annual clean-up campaigns to oust the migrants. ‘Running away’ for the duration was the migrants’ coping strategy, but, compared to the ﬁrst stage, when they had to survive by their wits, by now they had a base—strong networks, production capacity and a niche in the formal market—to which they could return quickly once the crackdown was over. Guerrilla tactics gave way to seesaw battles with the state. The third stage began with a craze for leather jackets, for which Zhejiangcun came to hold something of a monopoly after 1988. Leather jackets linked Zhejiangcun to the international market (particularly Russia). The large wholesale and export orders for foreign markets extended business relationships further beyond the circle of family and friends and encouraged business partnerships with people with whom there were no shared connections, by both traders and producers. At the same time, the development of xi had also extended beyond Zhejiangcun. Traders started moving away to other cities to set up outlets selling garments produced in Beijing. Wenzhou migrant networks based in diﬀerent places catering to the expansion in related businesses also became interlinked. For example, Wenzhou migrants in Keqiao township in Shaoxing county, eastern Zhejiang province, became the major suppliers of textiles for Zhejiangcun. Home villages in Wenzhou gained new signiﬁcance in ﬁnancing, labour recruitment and dispute settlement. Indeed, circles of family and friends became so important that the home clan organisations, which had been aﬀected by the mass out-migration, were ‘reinvented’ so that the traditional bases of social relationships could be maintained.

introduction

23

But xi did not always work smoothly and successfully. As business circles both expanded and became more distinct from social circles, and long-distance trade became more important, business disputes too increased signiﬁcantly. Respected ﬁgures were often called upon to mediate, and their facilitating role in bringing diﬀerent circles together in fair settlements, combined with their other attributes such as success in business, led to some of them becoming big players in Zhejiangcun. These big players in turn provided a new mechanism for the integration of Zhejiangcun by bringing diﬀerent xi together. However, ﬁghting oﬀ rivals or getting even with ‘muscle’ promoted the formation of street gangs, but they too helped to conﬁrm the authority of the big players with whom they had connections. The fourth stage in the evolution of the Zhejiangcun system began in 1992 and turned on a central episode of a shift in government’s stance towards Zhejiangcun. Seeing the resources accumulated by Zhejiangcun, and encouraged by Deng Xiaoping’s ‘South Trip Speech’, which urged a push from the post-1989 conservative mood into a renewed round of rapid marketisation, the Beijing authorities invited the collaboration of the migrant businesspeople in building the wholesale Jingwen Market in Zhejiangcun. This had far-reaching ramiﬁcations. First, Jingwen Market, and the subsequently developed large wholesale marketplaces, provided new physical spaces for traders and producers to make deals directly. This diminished the overlap between business and social circles within a particular xi, to the extent that even a newcomer household with no family or friends in Zhejiangcun could make business deals directly with traders, something that was previously unthinkable; at the same time they increased the interaction between diﬀerent xi precisely because people now could establish new business relationships quickly. Second, the migrants interpreted the Jingwen project as a signal from government allowing for their long-term stay in Beijing; consequently, a considerable portion of the migrant capital began to ‘take root’ by way of investments in ﬁxed assets such as residential-cum-production compounds and marketplaces. These projects intensiﬁed the internal networking within the community. For example, after the building of the large wholesale marketplaces, many traders who had been leasing counters downtown returned to rent their own stalls in Zhejiangcun, where the proﬁts were higher. Through projects of compound and marketplace development, a group of big players consolidated their status. But the relationship between big players and the gangs also became more

24

introduction

complex, and public order in Zhejiangcun continued to deteriorate. Finally, the building of new marketplaces and compounds strengthened Zhejiangcun’s position as a national production as well as trading centre for garments. Compounds provided better conditions for the producers to expand production so more products were exported; at the same time, more goods were sent from all over China to be sold in the large wholesale marketplaces in Zhejiangcun. Taking root in Beijing therefore further spurred the development of the nationwide migrant business networks. Government collaboration with the migrant community, however, did not bring about smooth relations between the two parties. A series of traders’ strikes, the diﬃculties of the Yueqing government liaison oﬃce and the failed experiment of a Zhejiangcun militia all highlighted the complex relations between the migrants and the state, as well as the tension in government, between diﬀerent departments and between Beijing and Zhejiang. Following on this, the ﬁfth stage of Zhejiangcun’s development was characterised by intensiﬁed interaction between the community and the state, divided by three events: the establishment and demise of Jingwen Market concern group, the ﬁrst non-proﬁt popular organisation in Zhejiangcun; the experiment with a self-regulation system in JO Compound; and, almost climactically, the big clean-up of unprecedented scale in November–December 1995, in which almost all the compounds developed and managed by the migrants were demolished. But this hiatus lasted over only three months, before the migrants and their compounds made a comeback. These events indicated that Zhejiangcun had evolved to a stage that required selfgovernance and that had enabled them to confront the state directly. Leaving the precinct in an ambiguous and semi-illegal position or ousting the migrants by force had proven to be counter-productive: state policy frameworks must be adapted to accommodate Zhejiangcun and other social forces alike.

The structure of the study This study is structured to reﬂect the milestone developments in the history of the spontaneous migrant community of Zhejiangcun. I had decided to write it up as a chronicle of events partly because I believed that a detailed documentation of the process of how a mar-

Map 3. Places in the migration trails and nationwide business networks of the Zhejiangcun migrant community

introduction 25

26

introduction

ginalised, ‘illegal’ concentration of migrants had created a powerful market as well as a highly responsive social system would be valuable, and partly because I simply could not organise the account into neat, thematic sections. Probably due to my long and deep involvement in Zhejiangcun, whenever I touched on some particular point, countless stories started crowding into my head, and I could ﬁnd no way to take the vivid material and divide it into constituent parts within a conceptual framework. By structuring my ethnography following the general ﬂow of time, I could with relative ease trace the processes of the major changes in the migrants’ lives. Yet even this proved less than straightforward, as it was impossible to contain developments within speciﬁc timeframes. For example, the labour market in Zhejiangcun underwent several changes throughout the period of my study, but in my account was only touched upon in a few chapters simply because the most marked changes in the labour market occurred at the periods covered in those chapters. Similarly, other key developments within the community were also documented in speciﬁc chapters by looking both forward and retrospectively so that its linkages with other aspects of the migrants’ lives could be discerned in chapters where it was not the focus. Readers may notice a change in the narrative style as the study goes along: the ﬁrst two chapters are narrated mainly through individual migrant stories; the chapters following contain more aggregate description; and the ﬁnal chapter turns to speciﬁc events. I was not conscious of this when writing and it probably reﬂected my own perception of the evolution of Zhejiangcun from a small group to a complex structure, and then to a system engaged in speciﬁc episodes of intense interactions with the state. The change in narrative tone also mirrored my own involvement in the community. For example, while the ﬁrst two chapters are largely records of oral history dealing with the period prior to the beginning of my research, the middle section was based on my own observations and the ﬁnal section bears the imprint of my own presence and participation in the unfolding events. A brief account of my involvement with the Wenzhou migrants in Zhejiangcun will make this clearer.

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My involvement in Zhejiangcun This study is based on my six years of ﬁeldwork and continued involvement in Zhejiangcun between 1992 and 1998, throughout which I lived in the community from time to time. I assumed four diﬀerent roles in the course of my ﬁeldwork. From 1992–1993, I was ‘a student writing a thesis’ and had two points of entry into the life of Zhejiangcun. One was via then-emerging big players, in particular Liu Shiming, and through them, getting to know the people in their xi. The other was via the young people, and the fact that I was just into my twenties made it easy for me to immerse myself in their circles. More pertinently, they were as curious as I was about the workings of Zhejiangcun and just as enthusiastic about discussing questions such as how the successful businesspeople made their money, how big players became big players, how a gang was related to a big player and so on. Their fresh, open-eyed view of the world taking shape around them provided me with an exceptionally rich source of leads. After 1993, I was a volunteer member of the clerical staﬀ at the Yueqing government liaison oﬃce to Beijing. This not only gave me a broad overview of the business system of Zhejiangcun, but also aﬀorded many opportunities to widen my own connections, especially among businesspeople. One unexpected but signiﬁcant beneﬁt of this was that I then had a store of anecdotes to relate and hold the interest of my conversation partners, which made my information collection through chatting all the more eﬃcient. I suppose all ﬁeld investigators would agree that a session of ‘question and answer’ is qualitatively diﬀerent from being able to enter into a real conversation in understanding informants, though this seems not suﬃciently emphasised in current textbooks. Beginning in late 1994, I took a leading role in the Beijing University Zhejiangcun social work team, which assisted in setting up the migrants’ Jingwen Market concern group. This role allowed me insights into the migrant traders’ inner aspirations, such as their desire to have a ‘public sphere’ of their own and more autonomy in their public life; I could hardly have glimpsed this without such direct involvement. This made me realise that at any given time, society had the potential for change, which would have been very hard to deduce from theory alone and can only be sensed through deep personal involvement.

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introduction

During the year that I spent writing the original Chinese study (1997–1998), I was approached by some Zhejiangcun businesspeople to help them to devise business strategies. My role as consultant led me to discover yet other hidden relations and sensitivities in Zhejiangcun; for example, how one marketplace investor viewed the development of another market located right next to his and what strategies the two parties would adopt to balance competition and co-operation. At the same time, I was able to use this role as an opportunity to test out some of the views I had previously formed about Zhejiangcun. As I oﬀered the businesspeople suggestions based on my understanding, I observed how they reacted; when ‘our’ ideas were put into practice, I could assess how valid my understanding had been. As well as my work among the Wenzhou migrants in Beijing, I also visited Yueqing and Yongjia counties in Wenzhou every year between 1993 and 1998; in 1997 I carried out a weeklong study of the Wenzhou migrant population in Chengdu in my role as consultant to a Zhejiangcun company. Such deep involvement may raise concerns that my participatory roles would have interfered with the life of the Zhejiangcun community and, thus, prejudiced the ‘scientiﬁc nature’ of my observations. This is not a concern that I would share: life is a process of constant ‘disturbances’. As long as an investigator behaves appropriately, why should his/her stay be any more of a break in the natural life of a migrant informant than the visit of any other friend? Adopting a disinterested position and looking on from the sidelines would more likely make the subjects nervous. I fully admit that my participatory research in Zhejiangcun was a process full of emotional and ideological ‘disturbance’, and furthermore, that my account of Zhejiangcun is not entirely objective. But I trust the reader’s judgement as to whether research by a ‘detached and neutral’ outsider could completely substitute for the notes of someone who has had an intimate relationship with the subjects of his/her observations. Sensitive readers will be able to guess how deeply involved I became in particular instances. No real names are used for any of the migrants or their business enterprises. This book uses the abbreviations of the pinyin name to refer to enterprises.

CHAPTER ONE

1984: LET’S GO TO . . . BEIJING!

There are diﬀerent versions of the story recounting the founding of the migrant community in Beijing that came to be dubbed as Zhejiangcun. But in the story that had gained the widest currency among the community, Liu Zebo is universally regarded as the ‘Christopher Columbus’ of Zhejiangcun; even the Beijingers living in Zhejiangcun referred to him as ‘Liu laoda’ (‘elder brother Liu’). In fact, Liu Zebo, a middle-aged businessman from Shanggutou village in Furong township, Yueqing county, had moved to Beijing with a group of six families. The likely reason why the other pioneers are not so named is that Liu had established himself as one of the ‘big players’ in the community, a businessman whose inﬂuence encompassed large circles of friends and relatives. Furthermore, at Spring Festival in each of the years between 1994 and 1997, the Yueqing city government had invited Liu as “representative of entrepreneurs in business away from home” to participate in talks with local leaders. Just like many other Zhejiangcun veterans, Liu Zebo had moved between quite a few places before deciding in 1983 to lead the ‘stepup’ to Beijing. His experience, common to all the Zhejuangcun pioneer families, speaks of a long tradition of spontaneous out-migration from Wenzhou prefecture. Seen in this perspective, the ﬁrst stage of Zhejiangcun’s development in Beijing was a continuation of earlier migrations that began in the broader context of rural migration choices and behaviour during the Cultural Revolution.

The migration trail from Wenzhou Contrary to general opinion, the recent resumption of spontaneous migrations by peasants from Wenzhou did not start with the policies of the ‘Reform and Opening’ in the late 1970s, but as far back as during the decade of intense struggle between various political factions of the Cultural Revolution (1966–1976). This is also borne out by a survey conducted in October 1994 by the Beijing municipal

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chapter one

government (in which I participated) which found that over 60 per cent of male employers above the age of 30 in the Zhejiangcun community had experience of migration to provinces other than Zhejiang before coming to Beijing. Wang Chunguang (1995: 64) also reported that 80 per cent of male migrants above the age of 32 in Zhejiangcun had migration experiences before 1978. Peasants from Wenzhou were able to migrate long before the Reform by exploiting the opportunities created in the state control system by the radical political campaigns of the Cultural Revolution which, ironically, were aimed at eliminating all the so-called ‘capitalist tails’, including private business and spontaneous migration. As Yao Xin’an, another Zhejiangcun pioneer, who had ﬁrst left home for Dunhuang in Gansu province, northwest China in 1971 when he was 18, told me: We took advantage of the chaos at the time to get out. There was even a period of time when we didn’t have to pay for the railway tickets! Most of us from Wenzhou [until the late 1950s and the 1960s] used to go to places in or around Shanghai. But they were still fairly strict with outsiders there in those days, so we went to the northwestern cities instead, where no one was really running things though the [Cultural] Revolution was in full swing.

Zhou Niantao, who had left his native Qiansanfang village in Wuniu town, Yongjia county, for the ﬁrst time in 1975 and arrived in Beijing in 1986, described the state of aﬀairs that allowed people to leave their home communes so easily: Since our ancestors’ time, our family has believed that ‘peace brings wealth’ (heqi shengcai). When I was young, I lived through various political campaigns, but I managed not to get on the wrong side of anyone. At the time that I left home, the leader of the production team I belonged to was from my own clan. He did nothing to stop me, since there was nothing in it for him if he did and there wasn’t much work to do in the production team anyway.1 The leader of the production brigade pretended not to notice my departure, and the commune leaders too were turning a blind eye to such things. Of course, I could no longer earn any work points and had to pay 2.5 yuan to the team each month to help support the ‘ﬁve guarantees households’ (wubao hu). When I returned to the village to get married in 1978, I 1 During the period of collectivisation (roughly 1958–1982), the countryside was organized into communes or gongshe (which now are townships), production brigades or shengchan dadui (now usually administrative villages) and production teams or shengchan dui, now mostly defunct.

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31

was elected leader of the team because there were two factions ﬁghting it out in the team and they could only be made to agree on a person who was detached from the struggle.

During the Cultural Revolution and the early stage of the Reform, those who were to migrate to Beijing later on had, thus, already experienced one or more of three types of spontaneous migration. The ﬁrst type, in the latter period of the Cultural Revolution, was that of ‘apprentices following masters’, or ‘later migrants following earlier migrants’, and mainly to northwest China to make furniture, and to central China (such as Hubei province) to work as carpenters or cotton-ﬂuﬀers. The master—apprentice relationship of passing on or acquiring skills has a long history in China, but during the Cultural Revolution had an added dimension: to mobilise anew the resources (including experience, information and money) accumulated by the older generation prior to the period of the planned economy (from the late 1950s) as a means to support out-migration. In other words, it served as a means of pooling resources outside the ambit of state collectivisation. Yao Xin’an’s experience is an example of this wave of migrants with no legitimate status who lived in the underground economy: I didn’t take any money with me when I left. Just after Liberation in 1949, a paternal uncle had migrated with his master to make furniture. He had some tools and money. He talked with my father and asked father to let me go with him as an apprentice. My father agreed. Uncle would take care of my food and lodging, and I would be given 100–200 yuan at the end of the year. [. . .] We didn’t dare go to big cities, and generally went to county towns and villages in the outlying districts, going from house to house asking whether they wanted any furniture made. We stayed with whichever family we were working for, buying rice and coal [rationed necessities] through them. We were better craftsmen than the locals and had no trouble getting work. In the political climate at that time, we would be considered classic ‘proﬁteers’ (touji daoba). But ordinary people weren’t ﬁghting the class war every day, and had to have some cupboards and a bed made when their son or daughter got married. We were only informed against if the neighbours were on bad terms with our hosts, or when people were irritated with the noise we made. There were many times we had to hide in a pigsty or cowshed in the dead of night. I myself was picked up by the police and sent back to my hometown twice. But we didn’t care. We managed to carry on somehow.

Many Wenzhou migrants shared Yao’s attitude towards being picked up or sent back by the authorities. As another informant explained:

32

chapter one We didn’t care. Our relatives and the other villagers would never look down on anyone who had been sent back home. It was seen as justiﬁed for people to try to live by the sweat of their brow and go out into the world to seek their fortune. You could still hold your head up high. What people really disapproved of was being unable to make money and live a decent life.

Such aspirations sanctioned by folk values of local communities over the goals of state ideology were key factors propelling the spontaneous migration and early growth of a private economy in Wenzhou. Nevertheless, oﬃcial constraints together with the limitations placed on livelihoods reliant on an underground economy greatly circumscribed the extent of migration during the Cultural Revolution. Yao Xin’an recalled: It was forbidden for individuals to buy timber or to sell furniture. We could only charge for the work we did, and were only slightly better oﬀ than when living at home . . . The ﬁrst time, I went away with two others. We usually went in a group of two to ﬁve people. We had to keep on the move to avoid getting caught, which would be hard with a large group. In 1973, I became a master myself and took my cousin and my nephew with me. My own master and fellow senior apprentice decided to stay behind; they couldn’t take the hard life over long periods.

In Qianjiayang and Heshenqiao villages in Hongqiao township, Yueqing county, and in other villages in Yongjia county, as some of the villagers remembered it only about 5 per cent of the population went away for work on this basis during the Cultural Revolution, with a very slight increase through the 1970s. The second type of spontaneous migration, also during the Cultural Revolution, was that of production brigade members going away to work in the name of their commune’s ‘construction and repair cooperative’ (xiujian she). These co-ops engaged in small building and repair projects and were the main state-approved collective enterprises in the countryside. Chen A’zhao, a Zhejiangcun migrant who worked for the Donglian Construction and Repair Cooperative, recalled his experience: In the factional ﬁghting in 1971 and 1972, the Du faction2 got the upper hand—we were beaten. So I thought about getting out and

2

The Du and Lian factions ( pai ), named after their leaders, were the two major

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making a living for myself. I went away for the ﬁrst time in 1973 with the construction and repair co-operative of the Donglian commune. The head of the co-op would go out and get contracts; then he’d take us oﬀ to do the work. I had a friend working in the commune [as a cadre]; we’d both been in the Lian faction. I got into the co-op through my connections with him. I ﬁrst went to work in the ‘57’ Oilﬁeld up in Jingmen in Hubei province for two years. Then I went to Gansu [province] in 1975. The elder brother of someone from the commune had connections in Jiuquan [city], and he contracted for a project using the name of the co-op—he took over 30 people to do it. Later on, around a dozen out of those 30 people were sent to Dunhuang [city]. This was because the boss [of the Jiuquan team] had connections in Dunhuang too and had got a contract for a job there. But the boss passed the contract on to his relative in the co-op, who was the person who took the dozen of us up there. Everyone was like that: whenever they could do something for themselves, they’d be sure to do it! You had to have connections to get into the group going to Dunhuang. It was a small team and the wages were high. The foreman came from the village next to mine and we had been in the same faction. I was putting in 16-hour days up in Dunhuang, getting over 100 yuan a month [. . .] I came back [to Wenzhou] in 1976. Lots of the blokes in the co-op went out by themselves taking on contracts. In those days you could earn over 1,000 if you kept at it for a year, so I was really wrong to go back home that time.

As mentioned by Chen A’zhao, a characteristic feature of these construction and repair co-ops was the rapid proliferation of ‘new’ work teams that were formed by increasing numbers of co-op staﬀ using the name of the co-op, and often the connections that they established through it, to obtain their own contracts for various projects. By doing so, they brought new migrants to new places. For example, under contracts concluded between the respective local governments or co-ops in the early 1970s, some people moved from Wenzhou to Gezhouba in Hubei province, where a large dam project was underway. Soon afterwards, they made private arrangements, purportedly on behalf of those same local agencies, for bringing in work teams that would have included individuals who had nothing whatsoever to do with the dam project, such as carpenters or tailors. The third type of migration experience, beginning in the early days of the Reform, was that of supply and marketing persons of rivalling factions in Yueqing in the early 1970s period of ‘violent struggle’ (wudou) during the Cultural Revolution.

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commune and brigade enterprises, or what became well known as the ‘Wenzhou supply and marketing army’ ( gongxiao dajun). Xu Junming from Xiyang village in Wuniu town, Yongjia county, is one of the oldest residents of Zhejiangcun. Already into his sixties and a spirited speaker, his migration experience began even before Liberation in 1949: I went to Shanghai in 1946 with a couple of uncles and someone else from our village—I was only 15 at the time. And just like the Jiangxi people who come here these days, I ﬁrst went to work in a ﬂourmill. Then the factory owner ran oﬀ, so we went to work as porters at the docks. We were taken on by the new port authorities after Liberation. During the ‘three years of natural disasters’ [a euphemism for the famines of 1959–1961 that followed the Great Leap Forward], they sent me back home. I arrived back in the village in 1962, and worked as deputy head of the commune’s service co-operative ( fuwu she). The service co-operative came under the remit of the county handicrafts co-operative (shegongye she). We were in charge of handicrafts in the commune—for the most part, blacksmithing, hairdressing and shoemaking. If you wanted to go away to work, you’d come to us for a letter of introduction. If you’d be earning 100 yuan from your work away, we’d take a 2–3 yuan handling fee. In those days, people didn’t go far, mostly to the county town [seat of the county government] or Wenzhou city. In 1976, I started working as a supply and marketing person ( gongxiao yuan), selling valves and electrical goods on behalf of the commune and brigade enterprises (shedui qiye). There was a supply and marketing department [for all the commune and brigade enterprises] at county level. Before you went away, you had to go to the department and exchange your Zhejiang grain ration tickets for national ration tickets, and get them stamped by the [commune’s] production supervision command (shengchan zhihuibu). Then you’d take your letter of introduction from the county government and samples from the factories, and go selling the stuﬀ to the supply and marketing departments of big enterprises in the major cities. When you got an order from one of them, you’d come back and start production. We’d ﬁll the orders we could handle ourselves; for those we couldn’t, I’d buy the products in Shanghai to meet the orders. There was still some proﬁt to be made with this buying and selling. There was a total of about 30 or 40 supply and marketing persons in the county town at the time. A supply and marketing person could work for a particular factory earning wages as the factory’s employee, or work independently. The ﬁrst way was quite rare. It was expensive for one factory to hire a lot of salespersons, plus it was unreliable. There were quite a few people who took money from the factories, used it to buy themselves a good set of business connections, then, when they had that up and running

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they’d head oﬀ and sell the connections to other factories or set up their own business! For the ones you did independently, the factory would give you a letter of introduction. You paid all your own travel expenses, and the factory paid you commissions for the orders that you got. To begin with, the factories were under the direct control of the township or county government, so you had to have connections if you wanted to be a supply and marketing person—you needed permission from the government. Afterwards, anyone could do it. The policy tightened up for a while after 1981, which aﬀected me to some extent. It slackened oﬀ again in 1984, and there got to be a lot more people going away on business again. After 1990, everyone [who came] here was saying you could earn big money going to Beijing to make clothes, and my two daughters and one of my sons wanted to go. I still work with my son today.

Former supply and marketing workers, however, made up only a small proportion of the Zhejiangcun community, one reason being that their business mainly relied on external connections, i.e. connections with customers from places other than Wenzhou. Because of this orientation in developing their businesses and target markets, many former supply and marketing workers who did carry on in business away from home, including in Beijing, were not usually connected to Zhejiangcun. They did not venture into manufacturing work themselves, but acted as the designated representatives of Wenzhou enterprises in Beijing, and those who sold clothes had mostly started oﬀ dealing in middling-quality suits produced in Wenzhou (at the time when Zhejiangcun was producing low-quality clothes). Then, as Zhejiangcun enterprises upgraded and carved out a strong market for their products in Beijing (especially after 1992), they moved on to supply and market electrical goods, building materials and so forth, to avoid the increasing competition from Zhejiangcun. But for the majority who had migrated as apprentices following masters or as part of a co-op work team, it was the internal connections within their migration groups that both sustained their activities in Beijing and became the basis for the development of Zhejiangcun, particularly in the initial stages. Columbus’s journey Liu Zebo ﬁrst moved away from home after the end of the Cultural Revolution, but unlike the experiences of the preceding waves, his

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was the unexpected consequence of an earlier state-organised migration. Liu recalled: A young senior high school graduate from my village went to Wuhai city in Inner Mongolia in 1966 during the campaign to ‘Support The Construction Of The Border Areas’ (zhiyuan bianjiang jianshe, or zhibian), and later became the head of the supply and marketing co-operative there. When he came back to visit his family during Spring Festival in 1980, he told us that tailors in Wuhai could make 3 yuan more than the ones at home on each item of clothing!3 He asked us to give working in his co-op a go. He wasn’t doing this for any ﬁnancial reason. His father had been a landlord before 1949, and he therefore had, as they used to say in the 1950s and 1960s, a ‘bad background’ (chengfen buhao). However, we had never ill-treated him. At that time, his father and brother were still back in the village and needed looking after. He himself said he felt a sense of closeness to fellow villagers and felt he was one of us. Back in 1978 and 1979, he had suggested our village set up factories to supply his co-op with brooms and ropes. And later, when we worked in Wuhai, we would occasionally go to see him at festival times with some rapeseed oil and biscuits. But he wasn’t helping us because he wanted to get presents. So, we went to the township government to get our letters of introduction, as the director had suggested. There were four of us altogether—me, my wife, my second son and my younger sister. When we got to Wuhai, the supply and marketing co-operative allocated us a place to work and take orders from clients. The co-op also set the rate we were paid. Later, with the help of this director, I went through the necessary formalities and got transferred to make clothes and sell them on the open market, again run by the co-op. I bought my cloth from the co-op and paid tax and an administrative charge each month.

Nine other families from Shanggutou went to Wuhai along with Liu. Each family took with them between 800 to 1,200 yuan saved from tailoring in the home village or borrowed from fellow villagers. Clearly, this was not the traditional apprentice-following-master type of migration, in terms of the size of the group and the resources

3 The charges for making a jacket in Shanggutou were 0.5–1.5 yuan but 2.5–5 yuan in Wuhai, despite prices in Wenzhou city being only slightly lower than in Wuhai. Other Zhejiangcun migrants who went elsewhere instead told me later why they did not go to Wenzhou city: “People in the city know from our accent that we are country folk and do not like us. When we go to other provinces, we just say we are southerners”. Thus, in some sense, the urban-rural divide in China served as a push factor in people’s long-distance spontaneous migration.

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they could muster. The reason why so many people were willing to risk so much at the time, according to Liu Zebo, was that: “times were not what they had been in the 1970s. We couldn’t do any wrong: our director was a state oﬃcial in charge of administering the marketplaces!”. With more capital and labour, and access to the open market, Liu Zebo made over 10,000 yuan in the ﬁrst year, and much more money than either Yao Xin’an or Zhou Niantao, two other Zhejiangcun pioneers. But Liu wanted more: In Wuhai, we learned that there was a big city called Baotou nearby. I thought we could make more money in Baotou, and the 20,000 yuan I had at that time would enable me to make a new start.

So, in 1982, Liu Zebo and ﬁve other families moved to Baotou, a major city in the Inner Mongolia autonomous region, staying in a hostel and selling clothes in a marketplace run by a co-op. Liu urged another of his sisters in Wenzhou to join him by guaranteeing her 60 yuan a month. By the end of the year, his personal assets grew to almost 100,000 yuan. When he went back to his native Shanggutou in late 1982 he built a new house, and joined a popular credit society (taihui ), which, unfortunately, collapsed. Liu lost his entire share and had only 7,000 yuan in savings when he ﬁrst visited Beijing in 1983.

The origins of Zhejiangcun Liu Zebo ﬁrst visited Beijing to purchase cloth in 1983, when he was still working in Baotou. Having learnt, from chatting with a cadre from the Wuhai supply and marketing co-operative, that all the co-op’s cloth was bought wholesale from state-owned enterprises in Beijing, he discovered that individual traders were now allowed to do the same. Liu narrated the sequence of events that led to the ﬁrst six families from Shanggutou coming from Baotou to Beijing, and the origins of Zhejiangcun: When I went to Beijing to buy cloth, I thought to myself, there’re so many people coming and going here, I’m bound to be able to earn some money here. I went to the Xuanwu district bureau of industry and commerce (BIC) to ask whether we could come to do business there. I was told that we could, if my hometown could issue a letter of introduction for me addressed to Beijing. I went back to Wenzhou

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chapter one especially to obtain the required credentials for each of the six families. With the paperwork in order, we managed to get approval from the BIC for renting street stalls. But where would we live? I thought the capital’s always that much harder than anywhere else when it comes to letting us peasants live where we want. We should go and look for a room somewhere out of the way. So we just jumped on a number 17 bus, and got oﬀ after a few stops when we felt it looked suitable. After we got oﬀ the bus, we walked along asking about rooms for rent. The ﬁrst place we approached was Number 4, Haihutun Road. They said that they had no room, but the house at Number 9 had just built a new room ready for the son’s marriage and would maybe be willing to rent it out. So we rented the room at Number 9. Then Number 9 put the rest of us on to a room at Number 33.

Qian Rongguang, from Hongqiao township, Yueqing, another Zhejiangcun pioneer, arrived a year after Liu Zebo. Qian and his fellow Hongqiao friends had been making clothes in Zhongwei city, Gansu province. After 1983, there was a constant stream of stories getting back to Furong and Hongqiao townships about the money to be made in Beijing. A woman in Hongqiao whose husband was working with Qian up in Zhongwei heard these and came up to tell him to head for Beijing right away. The husband was not too keen, but she was insistent. The commotion she created made such an impression on the other Hongquiao families in Zhongwei that about 10 households ended up setting oﬀ for Beijing. After Qian’s circle arrived, they became known as the ‘Hongqiao band’, and Liu Zebo and his friends as the ‘Furong band’. Apart from the groups centred on Liu and Qian, another group of early arrivals from Hongqiao was the circle associated with Yao Xin’an. Yao told me: We left home in 1983 to make clothes. My wife was pretty good as a seamstress. I had two cousins who also weren’t bad at it either. In the beginning, it was the women [his wife and her cousins] who discussed the idea of going away to work. My wife’s cousin and her sister’s husband had gone away to work some years back. We joined them. One of my fellow carpentry apprentices came with us too. He found some of his relatives to work with him. We went to Lanzhou [the capital city of Gansu province] in 1983. Whilst there, we heard that people from Wenzhou were making a lot of money in Beijing. At ﬁrst, I didn’t really believe that they’d let you do this kind of thing in Beijing. When I went home at the end of that year, people were saying that everybody in the ﬁrst group of people

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from Furong to go to Beijing had made thousands already! So, after Spring Festival our lot decided: let’s go to Beijing! Two of us went up to Lanzhou and sold oﬀ the clothes we had left over from the year before, the rest of us headed straight to Beijing. We knew already that the Wenzhou people were concentrated around Muxiyuan, so we headed straight there as soon as we got oﬀ the train.

These three circles—Liu’s, Qian’s and Yao’s—laid the foundations for the Zhejiangcun community, and from them various other chains of ‘bringing people along’ (dai ren lai) developed. At least until 1986, all the migrants from Furong had connections of one kind or another with Liu Zebo. He himself reckoned that around 30 families had moved to Beijing because of connections with him. The early arrivals from the Hongqiao area in their turn moved to Beijing through connections with Qian Rongguang and Yao Xin’an. This was also reﬂected in residential patterns in Zhejiangcun. For example, in the early days, many migrants from Furong lived around Deng village; those from Hongqiao lived in Ma, Haihuisi and Hou villages. Those with connections to Qian Rongguang ended up living in Haihuisi, whereas those connected to Yao were mostly in Ma village. Two migration chains, one taut, one slack ‘Dai ren lai’—or the ﬁrst arrivals bringing along the later arrivals— is a phrase the migrants use repeatedly when recounting their migration stories. But when I asked Liu Zebo how ‘bringing along’ should be understood, he responded: It wasn’t ‘bringing’. How could it be ‘bringing’? Close relatives and people from my village asked me how things were in Beijing, so I told them how it was. Some of them wanted help renting a room, or wanted to know how to make the clothes, so I’d help. Most of them asked us about it during our visits home, and then they’d come back to Beijing with us. We never had any idea that because we were making money, we should take it upon ourselves to get other people to come here too. What if they came here and made nothing? I would not dare give advice on things like business—unless someone’s family was really hard up, then you’d really want to help out.

Zhou Jianrong’s family came to Beijing in the migration chain linking to Qian Rongguang. Zhou said: We went to Beijing in 1984 because all through 1983 we were hearing about how much money Rongguang was making. He was my ﬁrst

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chapter one cousin. But we didn’t really discuss going to Beijing with him . . . I just thought if we had any bother in Beijing we could ask him to help. We didn’t have any kind of business dealings with him after we got to Beijing . . . if you ask a relative for help, they’ll help you. If you don’t say anything, no-one’s going to help you out without a reason.

Therefore, the migration chain that functioned mainly via the transmission of information can be described as a slack chain. But there was also a taut ‘labour chain’, of pulling in new migrants to work as employees. Not long after coming to Beijing in the early 1980s, Zhejiangcun enterprises faced a shortage of labour. Migrants then either wrote home or went back to personally encourage their relatives and fellow villagers, particularly the young women with tailoring skills, to come to Beijing to work for them. The employer would be responsible for their travel expenses, food and lodging, and would pay part of their wages each month and the balance at the end of year. When Liu Zebo’s ﬁrst cousin, Liu Zeliang, heard that Zebo was making good money in Beijing, he made his eldest son and daughter learn tailoring. His son was not interested and almost ran away from home because of this pressure. His daughter was more compliant; she trained for two months then headed up to work for Liu Zebo. Zhejiangcun bosses even competed with Wenzhou township and village enterprises (TVEs) for skilled workers. Lian Aisong, for example, who had a cousin working in a factory in Hongqiao for 65 yuan a month, promised her a monthly wage of 200 yuan to get her to come to Beijing. As well as Liu Zeliang’s daughter, two of Liu Zebo’s sisters came to work for him in Beijing. The elder, a village teacher who had been earning just 30 yuan a month, was paid 60 yuan a month (which Liu felt was suﬃcient to motivate her), but the younger, who was a highly skilled seamstress, was paid double. It is clear that this taut migration chain, though often based on family connections, was underpinned by a hard-headed economic rationality and functioned primarily as a special labour market.

Doing it together and roadside guerrilla tactics ‘Doing it together’ ( yiqi gan) describes how the pioneering groups of Zhejiangcun migrants survived and organised their production soon after arriving in Beijing. Households that belonged to the same group,

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such as Liu Zebo’s or Qian Rongguang’s circle, worked with each other very closely. They were usually engaged in identical business activities and there was little division of labour between the households. As Liu Zebo described: Another ﬁve families came in 1984. We eleven families jointly rented the Haihuisi Hostel. One room was 85 yuan a month. We liked it like that; we weren’t comfortable living scattered around in the homes of Beijingers . . . At that time everyone was making pretty much the same stuﬀ, and we sold what we made ourselves. There was nothing to keep secret. If someone had a technical problem with their work, all they had to do was ask me and I’d sort it out for them. We bought our materials together. Mostly I, Yunsheng and Hongde [both from Liu’s group] would go to the suppliers or to shops to buy it. We’d divide it up after we’d bought it.

Yao Xin’an described even closer relationships between the families in his group: We four families from our hometown lived in two big courtyard houses. The Beijingers at the time were very stuck up. They didn’t like the noise we made making clothes at night and kept saying they wanted us to move out. All we could do was be polite. Once, out in the yard, my son wanted to play with the landlord’s kid’s toy windmill, and they started ﬁghting. The landlord came out, having a go at my son and shouting that he wanted us ‘to fuck oﬀ out of there’. All of us from my hometown came out to argue with him. We were pretty harsh that time and afterwards that bastard didn’t dare try anything. We few families were an interesting bunch, all relatively young, and we’d all come partly for the hell of it. The four families would sometimes eat together, and make clothes together too. Buying clothes and taking them apart to use as patterns was something that I hit upon. That was after I’d gone to Wangfujing [then Beijing’s main shopping street] and had seen a woman’s blouse that a lot of people were buying. I bought one and when I went back, I said to the others: if we could make one like this then we’d make a fortune. But none of us knew how to make it. I said, shouldn’t this be easy to do? Making clothes was just like carpentry; both involved cutting your materials into the required pieces and then putting them together. Couldn’t we just take this blouse apart and then use it as a guide? It didn’t work with the ﬁrst blouse, my wife ruined it taking it apart. So the next day I went to buy another one. The other three families copied us, and we earned a fair amount of money out of that one. The father of one family had just arrived from our hometown. He couldn’t make clothes; he was just cooking for his son. So he’d go to Xidan and Wangfujing between 6 and 9 every morning, especially to queue up and buy clothes. After he’d brought them back we’d take

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chapter one them apart to make patterns and then make them up as quickly as possible.

Chen A’zhao’s experience of turning a negative situation around in 1989 also demonstrates the signiﬁcance of doing it together among the early groups of migrants: In 1986 and 1987, I was making a right old mess of business. We were one family fumbling about working on our own. We didn’t really know the tricks of the trade. First, I went by myself to Shishi [a market selling smuggled goods from Taiwan and Hong Kong] to buy cloth, but everything got ‘conﬁscated’ (moshou) [at a government checkpoint]. I lost tens of thousands. In 1987, I borrowed money to make woollen overcoats, but we couldn’t sell them and I lost over 70,000. It was only in 1989, after I got to know some people from our hometown living in Zhejiangcun, that things started to settle down a bit. After talking it over with everyone, I found that doing computercontrolled embroidery had pretty good prospects. Zhejiangcun had already started out-sourcing embroidery work, but the costs were pretty high. A fair number of people couldn’t aﬀord it. By this time, I had a group of friends, ﬁve or six people. In 1991, four of us invested 600,000 yuan and bought several embroidery machines, and this turned around all the diﬃculties.

Displaying the ﬁnished garments on makeshift stalls or carts on the street (bai ditan) for sale to passers-by was how the Zhejiangcun migrants hawked their goods when they had just arrived in Beijing. Though Liu Zebo had in fact ﬁrst secured a proper stall in Changchun Street through the Xuanwu district BIC, it had not brought in the proﬁt that he hoped for—“governments always set up stalls in the wrong place”, he remarked. So, he had got his wife and his son, Liu Dong, to set up a street stall outside the Xiannongtan Stadium to sell the trousers they made. The business turned out to be excellent. In 1996, while driving in his new Audi past that exact spot over 10 years later, Liu Dong told me: Early every morning we rode a big old 28-inch frame bicycle with the clothes we’d made the previous night. I’d help push my mum along. Mum took the money; I’d stand to one side watching the customers to see if anyone was taking clothes without paying, and looking out for the police or oﬃcials from the BIC. The moment I spotted anything, we’d bundle up the stuﬀ and make a run for it. Then we’d wait until they were long gone before we’d come back again.

Zhou Zhuquan, who came to Beijing in 1985, and who had some connections with Qian Rongguang, shared his early experience:

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It wasn’t easy setting up streetside stalls in Qianmen [the main shopping area south of Tian’anmen square] in those days. If a cop came, you had to make a quick run for it. Sometimes you’d have no time to grab the stuﬀ on the ground—it was really heartbreaking. One time I saw a cop coming, so I ducked behind the counter of a shop—I’d just crawled in there when the Beijinger shop assistant stamped down on me really hard! So I had to creep oﬀ to a public toilet up the street and hung around in there for half an hour before I dared come out. The cop was gone, but I had no idea where my son was either! He was only twelve. That really had me panicking. When I got home my wife cried. That evening my son came home by himself. I gave him a good beating. The kid didn’t understand and asked why other people selling stuﬀ didn’t have to run. Him asking like that really had me in tears.

Evasion and remaking tradition When Zhejiangcun migrants recounted their life histories, the 1978 Reform does not stand out as the watershed that China specialists usually take it to be. The Wenzhou migrants’ ﬁrst steps away from their hometowns were neither triggered by the introduction of the household responsibility system in the countryside nor the policies for market trading in the cities. Their migration experiences started long before these government initiatives. Whatever opportunities or loopholes were presented in the formal system, they exploited to an extent far beyond what policy makers might have envisaged. For example, when the state allowed the revival of traditional markets in the countryside and in small cities, Liu Zebo and the others used these small cities as a springboard to move on to larger cities like Baotou and Beijing. When Beijing permitted private market stalls under the direct supervision of the BIC, the migrants took the initiative to experiment with running more proﬁtable roadside stalls of their own in the central parts of the capital. Viewed from a diﬀerent standpoint, the oﬃcial promulgation of the 1978 Reform was not the case of the elite opening up new avenues for gain with the masses following on behind. Rather, much earlier than this, grassroots society had already accumulated a great deal of momentum heading in those directions such that the opportunities resulting from oﬃcial policy reforms, in eﬀect, sparked oﬀ demands for still further changes. Racing one step ahead of policy, so to speak, the success of the migrants’ businesses, while aggressively seeking markets, rested on a

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seemingly passive strategy, namely evasion from state authorities, whether it be Yao Xin’an’s jumping into pigsties in the middle of the night or the hide-and-seek tactics of the roadside guerrillas. In fact, such evasion had underpinned the development of the private economy in Wenzhou from the late 1970s. A cadre who had served many years with the Yueqing district BIC summed up how private enterprises had ﬂourished in that area: Starting from the Cultural Revolution, there were quite a few underground workshops in Yueqing. The moment oﬃcials appeared, they’d run away, then start up again the minute we left. It was easier to control them in the Cultural Revolution, because you could arbitrarily hang political labels on anyone as you liked, or even have them locked up. But by the late 1970s and early 1980s you couldn’t go handing out criminal convictions where you liked any more, and we completely lost the initiative. The government couldn’t stop [the growth of private business] and in the end there was nothing we could do. Instead, we’d be making up stories and statistics to get ourselves oﬀ the hook!

The strategy of evasion, of simply avoiding any contacts with and not posing any direct challenge to the authority of the state, extricated migrants from the strictures of rigid regulations. While the numbers of small private manufacturing premises kept growing in the latter period of the Cultural Revolution, the Wenzhou natives migrating all across the country never got involved in the various political campaigns of that time and scrupulously avoided any kind of confrontation with government bodies. At the same time, although local government had no eﬀective way of controlling these slippery ‘transgressions’, these gave no cause that could not be explained away to the higher authorities, nor could any particular government department be held responsible for tracking these evasions on dayto-day basis. Ultimately, as will be seen the case at a later stage of the development of the Zhejiangcun community, all government could do was to periodically launch ad hoc crackdowns when a situation was deemed too obvious to ignore. More importantly, the formation of such thriving migrant business hubs as Zhejiangcun in Beijing cannot be explained merely as a restoration or revival of aspirations and activities that had been suppressed by the state after 1949. Superﬁcially, Wenzhou already had a tradition of out-migration, mostly to Shanghai to work as manual labourers or stevedores, as Yao Xin’an’s narrative conﬁrmed. But his later migration, like that of Liu Zebo’s, to the northwest and to

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other parts of China was something completely new, in both migration pattern and path. Moreover, their experiences also refute any conjecture that the Zhejiangcun migrant community specialised in clothing because that was a traditional hometown industry. Except for the few very earliest arrivals, the majority of the Wenzhou migrants in Zhejiangcun did not (and still do not) know how to make clothes; instead, they hired and trained workers to do so. Popular strategies for mobilising potential resources, rather than a pre-existing craft skill or industrial tradition, had accomplished the success of their specialised enterprises. Certainly, the Wenzhou migrants had used traditional connections as the foundation from which they built up their business networks: but without adhering to any particular tradition or traditional form, they were creating something altogether new and, ultimately, inventing tradition.

CHAPTER TWO

1986–1988: GETTING STREET-WISE

Faced with competition from a post-Reform burgeoning private sector, which included the migrants’ robust roadside trade, the Beijing municipal government moved to introduce measures to make stateowned stores more competitive, beginning in 1981 with schemes for ‘contracting out’ and in 1985, for ‘joint operation’. Under contracting out—or ‘run collectively under nationalised ownership’ (quanmin suoyou, jiti jingying), as the scheme was called—smaller state trading enterprises signed a contract with their parent agency to achieve a minimum target in earnings for the year; earnings above the target set would be split between the government and shop employees in an agreed ratio. Accordingly, shop managers were given a degree of autonomy to make improvements to the way they carried out their business, particularly in deciding what to sell, how to portion the retail space of their stores and conducting sales promotions (see Li Zonglin et al. 1990). However, to the complete surprise of government planners, this newly granted autonomy led instead to shop managers merely leasing out counter space in their shops under a variety of pretexts in order to get the best return from the ﬂoor area of their shops. An old hand at the Xidan branch of Xicheng district BIC described the developments of that period: The ﬁrst leasing out of counter space began in 1984. There was a debate in the Beijing Daily. In those days, leasing was seen as a threat to the system of public ownership. If we caught a shop leasing out space [chuzu], we would conﬁscate the rent money as illegal income [ feifa shouru], and ﬁne them heavily too. But then the regulation became unenforceable. There were more and more shops leasing out space on the quiet, underground as it were. In 1985, higher authorities began allowing shops to arrange ‘joint operation’ [lianying]. Joint operation wasn’t the same as leasing out space: leasing out meant handing over the running of counter space entirely to the lessee, with the shop merely collecting the rent; under joint operation, the shop was still the major player. All it meant was that production enterprises could have dedicated in-store counters sell-

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ing their products and send their sales promotion workers. We also called this ‘bringing the factories into the shops’ [ yinchangjindian]. This kind of joint operation was a real headache for us. To begin with, we weren’t sure whether the shops were really running their counter space themselves; now we weren’t even sure whether they’d leased out the space or were running it under joint operation. In 1987, the city authorities issued a directive permitting the leasing out of retail space, saying that it was one of the ‘new phenomena accompanying Reform’. The regulations ﬁrst stipulated that no more than 30 per cent of the total retail area of a shop could be leased out. By 1995, they were saying it couldn’t exceed 50 per cent, then after that, as long as it wasn’t 100 per cent you were OK! And the fact was that many of the smaller shops were completely leased out— this was entirely the result of the constant pressure for further ground from in-migrating businesspeople and our steady retreat. We had no choice but to back oﬀ, because [widespread leasing out] was already the reality!

A foot in the door For Zhou Zhuquan, who had had enough of the hardships that went with running a roadside stall, the joint operation scheme brought a big change in prospects in 1986: There was a row of four or ﬁve tin-roofed stalls by the door of the Hongmei Clothing Store, where I often set up my roadside stall. I thought they were run by the store. I asked one of the stallholders if he’d be willing to sell some of the clothes I’d made and he said he would. That was on 28 June. I handed over ﬁve pairs of trousers which he said he’d need two days to sell. When I went to see him on the third day, the stall was empty! I dashed into the Hongmei Store to ask about it. That’s when I found out that that stall had been rented out by the store to someone from Hebei and the lease had come up the day before—he’d already settled his rent and gone. The store didn’t have any sympathy for an out-of-towner like me, and asked me to leave immediately as I was disturbing their work. I walked out completely dejected, thinking as I went: I can’t just get cheated like this and forget about it. So I gritted my teeth and bought three packets of Zhonghua cigarettes [the most expensive Chinese brand] from a stall up the road, then headed back for the Hongmei Store oﬃce. This time there was another person in the oﬃce, an older chap of 50 or more. Three packets of cigarettes turned out to be just the right number—a packet each for the two men in the oﬃce, and

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chapter two one to open there and then to oﬀer them a smoke. I asked them what I should do; still they paid no attention to me. As I was talking with them, a delivery arrived for the store, so I quickly rolled up my sleeves and said: I’ll shift it! I worked up quite a sweat. Then the older guy sat me down, and after giving me a lecture on legal awareness and stuﬀ, told me the address of the bloke from Hebei. I caught him and got my money back. Two days later, I bought two cartons of cigarettes and went back to Hongmei—you could call it a thank-you visit. I asked if the stall the man from Hebei had been renting was already leased out again, and could I take it? They wanted to see the clothes I was making. So I took six items to show them the following day: one I’d bought from Xidan, three my wife had made, and two I’d borrowed from a friend. As soon as the people from the shop saw them, they all agreed they were pretty good. The manager said there’s some empty counter space inside the shop at the moment: why didn’t I just directly lease out the space in the shop? So we two parties signed a contract, but we didn’t send a copy to the BIC—in those days we avoided them as far as we could. I’d be using one of the store’s sales staﬀ. In the beginning, the store paid her wages, but that left me uneasy because that way the salesgirl had no particular relationship with me and my business. It wouldn’t make the slightest bit of diﬀerence to her how much she sold. I talked it over with the manager. I would pay 100 yuan less per month in rent, the shop would still be paying her basic wages, but I would pay her bonus. We tried it out for three months, but the other sales staﬀ complained because the bonus I was paying was too high. So, in the end, when I paid her bonus, I’d check it out with the store ﬁrst and discuss how much to give. In the last half of 1986, my personal earnings alone were around 40,000 yuan. I leased counter space at Hongmei right up until 1992.

The manager of a stationery shop in Xisi, a shopping area in central Beijing, described the changes introduced by joint operation in his store: Originally, our shop sold pens, ink brushes and other stationery, which didn’t earn much money. Already by 1986 or 1987, there was a fair amount of stuﬀ being sold from Hong Kong, Guangdong and from some of the southern TVEs, which was very popular, but we were still selling the same few old product lines. One time when I was eating in a restaurant, I got to know one of you Wenzhou people who ran a clothes stall not far from here. He said if we were selling clothes in our shop we’d do all right. I said we were an outlet for a stationery company, so we couldn’t just go selling any old thing. He said there were plenty of big state-run enterprises doing private trading nowadays, so what could be wrong with our stationery shop leasing out

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some counter space to sell clothes? I went back and had a reread of some of the municipal paperwork on trade and industry reform, and felt we could give it a try. I proposed an experiment in expanding into other product lines to our company. The company agreed, on the condition that we had to reserve 60 per cent of our counter space for the old junk that our company’s factories were turning out. I could decide what happened in what was left. So I went looking for the bloke from Wenzhou, thinking I’d get him to help me source goods, but he wanted to lease out the counter space for himself. I said that wasn’t possible. I was a full cadre in the company, I could contract out some business but I couldn’t behave like a landlord! I said we wanted to try ‘bringing the factories into the shops’ to bring in some quality goods from decent factories. He swore to me that his brother just so happened to be head of a collective clothes factory in Wenzhou and that he’d introduce me to him. A week or more later, he brought me a copy of a factory trading licence and a letter of introduction. The letter named him as their contact in Beijing. We started by leasing out half of one of the counters by the door for him to sell clothes. We were taking 3,000 yuan a month rent from him back then. Just that amount alone was just about enough for our company to fulﬁl its contracted earnings quota! I only found out later that all that stuﬀ about his brother’s enterprise was a pack of lies. Afterwards he leased even more space and sublet it to other people. He went oﬀ to Xidan later on, where he rented out an entire upstairs ﬂoor in a [privately-developed retail centre].

Migrant traders and Beijing stores in alliance The Zhejiangcun traders who sold clothing from in-store counters were in contravention of the regulations governing the policy of the joint operation scheme. The Provisional Regulations (zanxing guiding) on leasing out counters issued by the Beijing municipal BIC in May 1987, eﬀective from 1 June, clearly deﬁned the purpose of ‘bringing the factories into the shops’ as: “production enterprises establishing dedicated counter space in commercial enterprises in order to understand market demand and to report back information, and these counters to be run by the commercial enterprises”. More speciﬁcally, it stipulated four criteria: ﬁrst, that the factory ‘going into’ a shop must itself be a producer, and should hold a state or collective enterprise operating licence; second, that counters are to be managed by the shops, with the factories only able to assign ‘information personnel’ (xinxi yuan) as assistants; third, that the counter

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may only sell the factories’ products; and lastly, although the shop would set a monthly sales target, it should not impose any minimum ‘bottom-line fee’ (baodifei) to be collected from the tenant regardless of whether the target was met (Beijingshi Gongshang Ju 1987a). Both this document and the Supplementary Notice issued the Beijing BIC later on (Beijingshi Gongshang Ju 1987b) made it patent that what the Zhejiangcun traders were doing was ‘leasing retail space’ and not ‘bringing factories into shops’.1 However, many shop managers in Beijing felt that these regulations were unrealistic, and that it made no sense to ‘bring in factories’ without requiring a ‘bottom line fee’ since if there was an obvious market potential for a particular factory’s products, the shop would prefer to retail those products itself. Shops wanted to lease out their counters precisely because they were poorly equipped to respond to market information and yet needed to fulﬁl their contracted earnings quotas as set by their parent agencies. At the same time, leasing-out retail space was subject to much greater bureaucratic regulation and incurred higher tax than ‘bringing factories into shops’. Thus, by pretending what was in fact leasing out was ‘bringing in factories’, both the shops and their tenants were able to get round the regulations. Hence, an oﬃcial in the Xizhimen branch of the Xicheng district BIC told me that I might as well give up my research, because no matter what conclusions or suggestions for policy improvement I might produce, “the shops and their tenants are a single interest group and there’s nothing you can do about it!”. Tenants and the shops also formed alliances in dealing with tax issues. Prior to the introduction of value added tax (VAT) in China in 1994, leased-out counters were liable for two types of tax: a rent tax amounting to 5 per cent of the tenant’s turnover that the shop handed in to the district tax bureau, and a business tax set at 3.24 per cent of the turnover, paid directly by the tenant to the tax

1 The 1987 Supplementary Notice (Buchong tongzhi) stated: “Should a retail enterprise provide counter space or other business premises to be utilised by another party, where the enterprise has not itself invested, takes no part in nor jointly operates the running of business and does not directly undertake the proﬁt or loss of that business, also where it has not registered as a jointly operated enterprise with the BIC, but it in fact by one of any number of various means receives a income in the form of a ‘guaranteed lowest turnover’ from the other party, this in reality constitutes the leasing out of retail space”.

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authorities. The shops were responsible for reporting their tenants’ turnovers to the tax authorities. But since it would be diﬃcult to determine the veracity of these reports, the tax bureaux in some Beijing districts simply set a ﬁxed monthly tax of 600–700 yuan for each leased counter. Nevertheless, counter space came in all shapes and sizes, so it was entirely up to the shops to deﬁne what constituted ‘one counter’. Tenants and shops, therefore, often came to agreements whereby the shop would hide a certain part of the counter’s turnover from the tax authorities, or claim that several counters were in fact just one; in return, the tenants would give the shops a higher cut of their proﬁts. Furthermore, many shops required lessees to pay 1,000–3,000 yuan for each counter as ‘security’ when they began their lease. If the BIC found out the truth about the lease arrangements, the security would ﬁrst be used to bribe oﬃcials; if the oﬃcials refused the bribe and the BIC ﬁned the shop, the security would be used to pay the ﬁne. It can be seen that state-owned shops played an accomplice role in the way in which the regulations for joint operation were circumvented. Also, since shops dealt with the tax and administration fees on behalf of the counters’ tenants, government departments were in any case unable to keep track of the tenant traders. As one of the Zhejiangcun traders told me: The main thing in those days was to get on terms with the manager. Once you’d settled on a rent, and then made sure that he was doing all right for himself from the deal too, you could leave him to do the rest. Even now, I still don’t know anything about any of those government regulations you’ve been talking about. I took what the shops told me I could have.

Hooking a licence In order to lease counters under the guise of ‘bringing factories into shops’, Zhejiangcun traders needed a licence to certify themselves as a registered manufacturing enterprise. This meant setting up a genuine individually-run ( geti ) manufacturing business, for which the licences initially issued in Wenzhou could be used to obtain a temporary permit for trading activities, including leasing, in Beijing. But shop managers in Beijing were not keen on this as the BIC required much fuller documentation for individual business licences than it would for state-owned or collective factory licences.

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A more common ruse was to borrow or hire the duplicate copies of licences from legitimate collective enterprises in Wenzhou, a practice that was already prevalent in the early days of the development of private enterprise in Wenzhou. At that time, private enterprises were restricted through tight regulations for bank-loan applications and hiring workers (in line with orthodox Marxist theory, any private business hiring more than eight workers was ‘exploitative’ and disallowed). Borrowing or renting a licence allowed a private enterprise to be classiﬁed as a collective one and gain better access to the necessary resources. A collective or state-owned enterprise would have two or three duplicates of its licence, often rented out for rates of up to 5,000 yuan a year in Wenzhou. This practice was called ‘hooking up’ ( guakao), or ‘wearing a red hat’ (dai hongmaozi )—that is, pretending to be a collective enterprise. Another common practice was to borrow licences from factories in less-developed areas such as Jiangxi and Shanxi provinces. Mei Jianguang, a successful Zhejiangcun businessman, was particularly adept at this. In the 1970s, Mei’s father had worked in a commune factory in Yueqing that made horsewhips to be sold in northeast China from bamboo purchased from Jiangxi. Mei had sometimes accompanied his father on his trips to purchase the raw material and sell the ﬁnished product, and was thus well connected with several supply and marketing co-operatives in Jiangxi as well as Heilongjiang province. In 1987, he had heard there was good money to be made by selling clothes from leased counters in Beijing but that the lack of a licence held many people back. Thinking that his connections with collective enterprises in other provinces might be an asset, he decided to give it a try. In a single trip to Jiangxi he obtained three licences, paying the licence holders (factories or their parent government agency) respectively 3,000, 2,500 and 1,800 yuan per year. He used one of the licences himself to lease a few counters and the other two to help out friends and relatives. If they were just borrowing the licence to sort out their paperwork with the BIC, he did not ask for money; but if they wanted it for the long term, he asked for between 5,000 and 10,000 yuan per year. This facility won him considerable appreciation from his circle of friends and relatives, which set him on the way to becoming a ‘big player’ in Zhejiangcun. Sometimes the state shops would facilitate in hooking a licence for their tenants. Liu Qinghui, who used a licence from a factory in the northwest province of Qinghai in registration and the fac-

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tory’s brand label and address in the clothes that he made, described how this worked: I had no connections at all with that factory. They’d already leased out a counter in the shop selling their own stuﬀ before I arrived on the scene, but they couldn’t even make the guaranteed lowest turnover. I approached the shop management about leasing out a counter, but I hadn’t got a licence. So the manager said to the assistant from Qinghai, since they weren’t going to be selling their stuﬀ, why not lend their brand to someone else. So it was still the Qinghai factory that was leasing out a counter from the shop and I paid the factory 30,000 a year.

The consignment-selling model Leasing counters in downtown state shops brought about a new business co-operation model between Zhejiangcun enterprises in the community, namely consignment selling. Those who leased counters to sell their own garments would also display those of other producers, and either paid them after the garments were sold or returned without liability what they could not sell. Yao Xin’an recounted his ﬁrst experiences with consignment selling: To begin with, we were all making and selling our own clothes. In those days you could make 20 or 30 items of clothing in a day. But you couldn’t go putting out only 20 or 30 items in just one or two styles on your shop counter. That would be OK if you were running a street stall, but not if you were renting space in a proper shop. I started leasing my counter on ﬁrst April 1986, hoping to catch the First May holiday, and got the family to hurry up production. They were hard at it for four or ﬁve days and made 50 or 60 items a day. But the moment we got the goods on the counter, well, we sold about 30 items in the ﬁrst day and 28 on the second, taking 523 yuan. Now, that meant that relying on our family production we’d never keep up, so I had to go and borrow some clothes from friends and relatives. I went ﬁrst to an old friend with whom I’d served my carpentry apprenticeship. He was selling his clothes to a Beijing private trader. I told him I wanted to borrow some clothes from him. He just laughed and said, how could it be borrowing; why didn’t I simply sell his clothes on his behalf. I said OK: we’d have a go and see how it went. So I took 20 or so items from him, then I got a dozen or more from another relative. We ﬁxed on the price beforehand, for example, my old apprentice mate was selling his clothes to the private trader for 8 yuan each, so I gave him 9. After that, they both sold their

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chapter two clothes to me. When the relationship had matured a bit, I’d sell the clothes ﬁrst, then settle on a price with them. I would see what a fair price at market would be, take a percentage for myself as proﬁt and gave them the rest. Usually, for a 10-yuan item say, I’d keep 2 yuan. In the early days, I’d give them their money the very day the clothes were sold, but afterwards both sides found this too much trouble so we started keeping accounts. We didn’t set a deﬁnite date for settling accounts. After all, we were all good friends, so I’d just settle-up when I had the money. After that, I had more people making clothes for me. I settled on the price I was going to pay the producer when I took the clothes— it had nothing to do with them how much I could sell the clothes for when I got them to the shop. By doing this, my proﬁts were a lot bigger than before. I had started by taking 2–3 yuan out of a 10-yuan price, but now with decent stuﬀ I could earn 5 yuan out of every 10 yuan sold. I leased another two counters in 1989. My wife felt she didn’t have the energy to make clothes and do sales at the same time, so we stopped making clothes ourselves altogether after 1990.

The relationships between producers and traders underpinning consignment selling were characterised by strong mutual checks and restraints. Though it was mainly up to the trader to decide on the selling price of the clothes, the producer could have a say as well. Traders naturally wanted to maximise their proﬁt; but higher-priced clothes would sell more slowly than cheaper items, which was not in the interests of Zhejiancun producers targeting the low end of the market, for whom the key to higher proﬁts was to sell products quickly and in large volumes. A producer who found a trader pricing the clothes too high might take them back, so traders would accommodate their view on pricing to ensure a reliable and adequate supply of goods for themselves. Chen Zhengci, a producer with a reputation for producing garments that sold well, illustrated how this mutual give and take worked: “I mostly go by time: I go and check up on any seller who’s taking too long to shift the clothes. If they think my stuﬀ ’s selling well and really want to keep on selling it, then they won’t mind dropping the price a bit”. Given the reliance of consignment selling on deep trust and stable relations, it is not surprising that people started the practice with the circle of family and friends. But they soon expanded to business circle as well, and in turn developed new friendships in the process. Ma Linfa described the changes that occurred in his relationships with his clients:

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After I’d leased some counter space, I began by selling stuﬀ on behalf of three or four close friends and family. It was less of an eﬀort to deal with one’s own people than co-operate with others. If there were a few small mistakes in the accounts, it didn’t really matter. Once I lost the entire detailed accounts for a month’s business. All I knew was how much I’d sold in total, but as for how much of which particular families’ clothes I’d sold, or how much money I should give to whom, there was absolutely nothing to show for it! . . . My wife and I blamed each other and started rowing. My uncle came to drop oﬀ some clothes and asked what we were ﬁghting about. He went round to the families I owed and got them to put in for what they were owed based on their own accounts. When we ﬁnally checked all the ﬁgures, we were only 12 yuan short! If I hadn’t been working with my friends and family, I would have surely gone broke! After that, I slowly had more people collaborating with me, ten families by 1990; today I work with around twenty families. I don’t completely rely on being introduced through friends. Sometimes I go looking for myself around Zhejiancun and if I see something good I’ll get it from them there and then. Of those earlier ten families, there are two we get on pretty well with, and they’ve also become good friends with my younger brother and my cousin.

In my earlier report on Zhejiangcun (Xiang 1993:48–49), I summed up the economic system of the community in this way: Zhejiangcun is a big factory, and also a big co-operative. Zhejiangcun migrants can be divided into two groups: the producers (garment makers) and the traders (who rent counters from stores or at markets to sell the products). Each individual producer or trader has built up a network centred on him/herself. Based on these networks, each trader has close contacts with twenty or more producer households. Producers delivering products to their trading partners, or traders collecting garments from the producers, is the basic practice in the community. Producers and traders frequently call at each other’s homes to discuss the styles and prices of garments. In doing so, information about the outside market disseminates quickly and widely within the community. Such frequent interaction also makes it easier for producers and traders to come quite naturally to an agreement on the nature of their business partnership so that no time is wasted on bargaining.

The practice of consignment selling was crucial for the development of Zhejaingcun because it served as an informal system of ﬁnancing especially for traders, and kept the transaction costs in trading of Zhejiangcun garments low. Li Wenhu, who leased counters selling leather jackets in four downtown stores, estimated that he would have needed an extra 400,000 yuan to run his business if he was

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not selling on consignment. It was, he said, like getting a bank loan equivalent to the value of the clothes he was supplied. The story of Lian Shengde, a successful young businessman, provides a typical example of the tremendous beneﬁts that accrued to traders from consignment selling: Can you guess how much money I had when I came to Beijing in 1988? Exactly 4,800 yuan. I rented a room right by my relatives’ place and I had to pay the landlord 200 yuan right after I moved in. I’m lazy and I didn’t want to make clothes. I had about six or seven relatives in Beijing all making clothes, but no one was leasing counters. I thought, why don’t I lease counters and sell clothes for my relatives on consignment. But it wasn’t easy getting a counter. After staying in Beijing for a month, I still had nothing, but I’d already spent a few hundred having a good time. In the end, I found a counter in Dashila [a commercial district in central Beijing, near Wangfujing]. I spent more than 300 to take the managers out for dinner, paid 3,000 for rent and 1,000 as security. I was literally penniless after that! I couldn’t even buy a bus ticket on the way home after signing the contract. I borrowed 500 from my uncle to buy food and go to cinema for the next month. After that, I didn’t need to spend a cent on the business: I collected clothes from my relatives, paid them only after I sold the clothes, and returned the clothes if I found them hard to sell. There was really nothing to worry about and the only thing was to keep the store manager happy. In the ﬁrst month, I earned 8,452 yuan! That was exciting. I returned the 500 to my uncle and bought him a new suit from Xidan. By the end of 1988, I’d earned nearly 100,000 yuan . . . That’s why we always say that leasing counters is a no-cost business.

In addition to considerably reducing the traders’ ﬁnancial burden and therefore allowing their clothes to enter the market at extremely low prices, consignment selling also brought producers and traders in Zhejiangcun into closer relationships, which made for highly eﬃcient information exchange on the latest market trends. Wang Xiaoyong, a supply and marketing person for garment factories in Wenzhou working in Beijing, suggested that without the consignment-selling model, Zhejiangcun enterprises would have been forced out of the market by factory production from Zhejiang province. Through consignment selling and leasing counters from state-owned shops, proﬁts improved markedly. In 1983, for example, Liu Zebo’s year-end earnings were some eleven times his starting capital for that year. At the end of the 1980s, the usual starting capital for a family at the beginning of the year would be 5,000–10,000 yuan, and year-

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end proﬁts around 70,000–200,000 yuan, or a rate of return rising from between 15 to as high as 21:1.

Capable people, ‘one of our own’, and people from Yongjia Getting a foot in the door of downtown shops and consignment selling led to changes in the migration chains pulling people to Zhejiangcun. Xiang Yousheng outlined what could be described as a chain of bringing ‘capable people’ to Beijing: I rented a counter in a shop downtown in Wangfujing Street. I got some of my stock from other clothes makers as well as selling my own stuﬀ. But that wasn’t enough; I needed a sure and steady supply. I thought of getting a partner from my hometown, someone I got on well with, someone capable with enough capital to employ a lot of workers and make good garments. The tailors in and around Yueqing had practically all left, but a lot of girls had started learning to make clothes and there were some courses running to train new hands. Bosses don’t have to make garments themselves. What they need is a good head on their shoulders and enough capital. Later on, we needed to have partners when renting shop counters because shops liked to lease counters to a group of people. We preferred it that way too. Several counters with similar clothes would attract more attention. It’s easy to get people from home. I persuaded a distant cousin who was a purchasing agent from a farm tools factory and two of my primary school classmates from home to come to Beijing with me.

The chain of ‘capable people’ evolved with the need to ﬁnd able business partners in order to get the best possible share of the market. Consequently, a preference for bringing in relatives or fellow villagers surfaced again, sentiments summed up by Yao Xin’an: We all want good partners. But there are not many people who are both capable and willing to co-operate with you. Zhejiangcun had a lot of people then, and there were already some conﬂicts. In the end, I felt my own people would be more reliable. By ‘one of our own’ we mean close relatives and good friends who stand up for you when the situation demands it. I feel comfortable doing business with them.

It should be emphasised that while bringing friends and relatives to work in Beijing provided a more stable internal basis for migrant business community, it was expected that even ‘one of our own’ would eventually start his/her own businesses independently. Therefore,

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this chain also served the outward expansions of the migrant business community as a whole. Qian A’mu, a former head of Qianjiayang village in Hongqiao, who came to Beijing in November 1984, said: My cousin asked me to come to Beijing. He meant well; he knew my family was not making much of a living. Of course, he also had ideas about expanding his own inﬂuence here. I tried to rent a counter when I ﬁrst came. He told me where I could rent one and how to rent it, but didn’t give me leads to the shops in the good locations. We’re all in business, and it’s only natural that he should keep the better counters for himself. I managed to get a good place through my own eﬀorts.

Expansions into the formal retail market exerted a constant demand for more labour. By 1986, as Xiang Yousheng informed, when most of the younger labour force in Yueqing able to make clothes had left, people began looking for workers in Yongjia, where several of the townships bordering Yueqing are less economically developed mountain areas.2 Yao from Qiansanfang Village in Yongjia described himself as the ﬁrst person from his village to come to Beijing: When I went to work ﬂuﬃng cotton in Gansu during the Cultural Revolution, I got to know someone from Yueqing who was doing the same work. We always kept in touch afterwards. In 1986, he went to Beijing to make clothes, and when he wanted to ﬁnd some workers, he came to my house asking if we had anyone. So my two daughters went with him. They worked pretty well in the year they were away and said that I and the wife should come away too and that we could work for ourselves. In 1988, we took every bit of money we had saved, which came to 7,000–8,000 yuan, including what our daughters had earned in the year, and came to Beijing to make clothes. The other people from my village got their information from us before coming here themselves.

2 Migration chains were not limited to the needs of garment manufacture and trading. A whole world away from home sprung up in Zhejiangcun. Wenzhou-style trishaws were brought from home to negotiate the narrow lanes and the riders were mainly poorer migrants from Yongjia, and from Qingjiang and Dajing townships in Yuequing; these migrants also went into other ‘lower-ranked’ jobs like running Yueqing-style food-stalls that thronged the central areas of Zhejiangcun. Specialist migrants included doctors who lost their clients due to mass migration in some townships in Yueqing and decided to set up ‘illegal medical practice’ clinics (because they could not be licensed in Beijing) in the community; in 1995 there was almost one clinic for every 200 households.

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It was not uncommon for workers from Yongjia to set up their own businesses in Zhejiangcun after working for their Yueqing bosses for a few years. They generally maintained a close relationship with their former bosses, which were often crucial for their own business ventures, particularly when former bosses shifted from producing to trading, in which case the Yongjia families often became their suppliers.

“Inappropriate . . . to remain indeﬁnitely” Noting the increased incidence of spontaneous migration nationwide, in 1985, the public security ministry issued the Provisional Rules on Temporary Resident Population in Urban Areas (Guanyu chengzhen zanzhu renkou de zanxing guiding). The rules stipulated that people above the age of 16 intending to stay in a city longer than three months needed a ‘temporary residence permit’ (zanzhu zheng) and, further, that renting housing required permission from the migrant’s original work unit or hometown local government (Gong’an Bu 1987 [1985]: 459). But the new rules had little impact on the expansion of Zhejiancun. On the contrary, because of the formation of eﬃcient migration chains and networks, migrating to Beijing was, by this time, far simpler compared to the experiences of the earliest arrivals. The way Qian A’mu described it: “Most of us didn’t go through the bureaucratic formalities we should have in those days. People coming to make clothes usually only saw other folk from their home county: who else knew you were there?”. But when I pointed out the regulations about renting housing, Qian looked surprised: I didn’t know there were any such regulations. In 1987 and 1989, when the police came to throw us out, we were told that we were renting illegally. But once that had blown over, everything carried on as before and the only thing you had to do to get a room was pay the rent.

Liu Zebo’s special trip back to Yueqing to get the necessary papers for the initial six families in 1983 was, it would appear, already a memory of times long past. Liu Zebo recalled: Before 1986, there weren’t so many other people from Zhejiang here and we felt uneasy. Everywhere, you ran into Beijingers and ‘big peaks’ (dayanmao) [the police, tax oﬃcers and BIC staﬀ who wore a peaked cap as part of their uniform]. But there are so many of us here these days, and no one seems to bother about paperwork any more!

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By 1986, Zhejiangcun had become a well-established feature of Beijing urban life. By this time, the number of migrants had reached 12,000— almost equal to the number of registered local residents (interviews with oﬃcials at the Nanyuan township government and at the Muxiyuan branch of Fengtai district BIC, both in 1993). Hardly surprising, then, that the Beijing authorities conducted a brief investigation of Zhejiancun and arrived at a foregone conclusion. A cadre who had always worked in the Muxiyuan BIC provided more details: In 1986, the government came out with the policy decision ‘inappropriate to be allowed to remain indeﬁnitely, use expulsion as the main measure’ (buyi jiuliu, yihong weizhu). They felt that if more and more immigrants kept arriving, the government could end up forced just to passively accept the fact of Zhejiangcun’s existence. We began cleanup sweeps for illegal immigrants in 1987. We sent work teams to cooperate with residents committees in house-to-house checks, getting the migrants to move out as soon as possible. At that time, it was felt the migrants failed to meet three requirements, which made it impossible to process the paperwork that would make them legal here. First was renting housing. Previously we’d only dealt with out-of-towners coming to Beijing for short visits to see friends or family. If outsiders were living here long-term in rented accommodation, how would we supervise them? We didn’t know. Second, there was no department for overseeing their employment of workers. They were hiring workers elsewhere to come and work in Beijing, and the Beijing labour bureau had no way of controlling them. Third, in terms of us here at the BIC, their business practices didn’t meet requirements. If they didn’t have the proper certiﬁcation from their hometowns, we couldn’t process any paperwork for them here . . . We were always trying to persuade them to leave, but it had no noticeable eﬀect. So the conclusion [vis-à-vis Zhejiancun] was obvious: ‘inappropriate to be allowed to remain indeﬁnitely’.

CHAPTER THREE

1988–1992: A BREAKTHROUGH WITH LEATHER JACKETS

At the end of the 1980s, Zhejiangcun acquired another moniker among Beijingers—‘leather-jacket village’ ( pijakecun). Liu Shiming, arguably the most inﬂuential ﬁgure in Zhejiangcun whom I ﬁrst met in 1993, told me with some pride: Leather-jacket making in Zhejiangcun started here at my place. I moved to Beijing in 1988 because I’d disgraced myself back at home.1 I knew very few people in Beijing. I was wondering what to do with myself. People [in Beijing] had already started wearing leather jackets by then, but there were only two places selling them in the whole of Wangfujing and Xidan. Customers were competing to buy them—ﬁghts would break out at the shops on a Sunday. So I decided to make leather jackets. I didn’t know a thing about making clothes, didn’t understand fabrics and colours. But leather jackets were ﬁne, because they were all black! The sewing machine we’d bought at the time couldn’t be used for leather because the holes it punched were too small. My ﬁrst job was at a machine factory in Yueqing so I got a hammer and hit it a bit; then it was OK! It made me around 100,000 yuan in the ﬁrst year alone.

The big proﬁts he made from the leather-jacket business boosted Liu Shiming’s conﬁdence to make a go of it in Beijing. He started bringing in his friends and relatives from Yueqing in a big way to join his business, forming a large circle of inﬂuence which laid the basis for his later becoming a major big player in Zhejiangcun.

1 Liu Shiming was jailed in the 1980s for making money from showing pornographic videos at home and came to Beijing after serving his sentence. In 1986, worrying he would fall in to bad ways again in Beijing, his parents persuaded him to return to Yueqing to work in a factory. But the pay was low and he felt discriminated against so he returned to Beijing.

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Whereas the leasing of shop counters had given Zhejiangcun businesses a foothold in the low to medium end of the retail market, in the leather-jacket trade they came to hold a monopoly of a product that was the craze, not just in China but also in foreign markets, especially in the former Soviet Union and Eastern Europe. In the 1990s, it was estimated that 70–80 per cent of all the leather jackets retailed in Beijing were produced in Zhejiangcun. Foreign traders come to Zhejiangcun The collapse of state socialism in the Soviet bloc at the end of the 1980s saw large numbers of independent cross-border traders ( guoji daoye) travelling from those countries to China to buy consumer goods to sell back home. In Beijing, these foreign traders ﬁrst got to know of Zhejiangcun when they shopped at pedlars’ markets (ziyou shichang) such as Baihua Market and Quanyechang Market in Xidan. Baihua Market was divided into two sections at the time: the high-quality hall selling goods of a standard close to that in formal shops, and the medium-to low-quality hall, where most of the traders from formerly Communist countries did much of their buying and where Zhejiangcun jackets became a fast-selling item. Also in the Xidan commercial district, the newly established Yuda Market was almost entirely given over to wholesaling Zhejiangcun jackets and saw thousands of international traders everyday, to the point where the market was even renamed the ‘International Leather Goods Wholesale Department’. Zhejiangcun entrepreneurs who did not have their own leased shop counters or outlets in these markets would hang about outside, waiting to catch visiting foreigners and take them back to their workshops. In this way, Zhejiangcun soon became a major source of leather jackets among many foreign traders. In the early 1990s, some 50–100 Russian traders—a big bag slung over the shoulder in one hand and a beer in the other—went from door to door buying jackets every day. Language was no barrier as bargaining was conducted using pocket calculators. Most visiting traders were from the Commonwealth of Independent States, but also included Poles, Romanians, Mongolians and even South Africans. In response to foreign market preferences, Zhejiangcun jackets, originally almost all in black and

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made from horsehide or sheepskin, began to appear in cheaper brown suede.2 Pre-ordering and contracting out The boom in demand for leather jackets structured two new types of business practices in Zhejiangcun. First was the practice of traders pre-ordering supplies from producers. Zhou Zhuquan did this: In 1990 and 1991 our stuﬀ was selling really well—our biggest concern was running out of clothes, so some of us traders in the Zhejiangcun started paying deposits to producers. I pay you 20 per cent or half the total up front, and you guarantee to sell your clothes to me. I’d pay oﬀ the outstanding bill when I came to buy more next time.

Zhou made deals like this with several of his relatives to whom he would pay up to 30 per cent of the total cost up front, while to other producers he usually had to pay half; after Zhejiangcun traders began to engage directly in the cross-border trade, these average rates increased. The second new practice was subcontracting among producers. Previously, producers had concentrated on turning out garments and waiting for the traders with leased retail counters to sell them. With foreign traders now at their doorsteps, producers started to cut deals for themselves, but found that the size of the orders requested was often more than what they could fulﬁl individually and so work was contracted out to other producers. This was the experience of Lu Guifa: It ﬁrst started when someone from my hometown who was leasing counter space brought some Russians to my workshop to pick up clothes. A week or more later, their translator brought another Russian

2 Leather was brought in from Liushi county in Hebei, one of the largest leather processing and trading centres in China. Typically, a few producers from the same circle of family and friends hired a truck and took turns to go and stay overnight to purchase leather of varying colours and qualities from diﬀerent leather-processing households. Collective purchasing is necessary as leather is sold only by the roll and no single producer risked buying only one type in large volumes. When Zhejiangcun jackets made inroads into the downtown upmarket clientele, producers purchased high-quality leather from Xinji city in Hebei and Haining city in Zhejiang.

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over himself. The translator said he wanted to come to an arrangement with me: he’d bring me customers and I would pay him 3 yuan for every item sold. The Russian took an immediate fancy to the stuﬀ we were making and straight away ordered 300 pieces, wanting them ready for the following day. But in those days, the most we could produce in a day was 80 pieces. I didn’t think it would be right to just go and pick up completed stuﬀ from other producers because what you’d get wouldn’t be all of the same, either diﬀerently sized or styled. So I went to see three sets of relatives and got them to help make the clothes. I’d agreed a price of 90 yuan for each leather jacket with the Russian. The cost to make one jacket was about 50 yuan. I paid my relatives 82 yuan an item. If I’d gone to buy readymade, it would have cost me at most 70 yuan an item in those days.

Most of the contracting out went on within circles of family and friends and the middleman’s mark-up in these deals was usually similar to the rates mentioned above by Lu Guifa. With the diﬀerential so low, the general view was that the families helping to ﬁll the contracts were the real beneﬁciaries in these arrangements. Producers who subcontracted their orders directly made very little from this; their proﬁts were made from the clothes they were able to produce. Subcontracting allowed them to clinch a deal with the foreign traders to supply large volumes of jackets at short notice; in the longer run, it also improved their status amongst their circle of family and friends. Wholesaling leather jackets Another innovation in Zhejiangcun catering primarily to the foreign and export trade were the wholesale centres ( pifa dian). Stars Clothing Company was the ﬁrst wholesale centre in Zhejiangcun, set up in 1992 by Wan Tingguang in the premises of the former Haihuisi Guesthouse. The lobby was converted into a business-cum-exhibition hall displaying leather jackets on all the available wall space. The following deal between Wan and two brothers from Mongolia, which I observed ﬁrst hand in April 1994, gives an idea of how his operation worked. The Mongolian brothers had ﬁrst been brought to Stars Clothing Company by Wan’s younger brother, who was charged with hanging around the Xidan shopping district on the look out for foreign customers. This time they had come on their own, arriving at lunchtime accompanied by a translator, and were looking to buy 2,000

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black suede jackets. I was taken aback by the size of their order, but Wan looked very pleased. Company workers immediately placed a large wooden pallet in the middle of the store where the Mongolians sat, inspecting the items that were being brought out from the warehouse. There was a greater ﬂurry of activity by the main entrance where, within 20 minutes of the Mongolians arriving, Wenzhou-style trishaw carts loaded with leather jackets began pulling up, and armload after armload was carried into the shop: within two hours, eight cartloads had been emptied of some 1,200 items of clothing. Hence, Wan explained, the name ‘Stars’ for his business, because he relied on the small workshops scattered about Zhejiangcun ‘like the stars in the sky’. Nevertheless, despite keeping hard at it all afternoon, Wan could not locate 2,000 jackets all in the same style. The Mongolians kept asking if it was possible to get the order made up before 11 pm that same day as—Wan discovered from the translator—they had already booked a railway car at Erenhot, the border town standing between the Chinese province of Inner Mongolia and Mongolia proper. Wan realised they would not want it to leave half empty, so he told them that there was no chance of supplying the full order unless it could be made up with jackets of a diﬀerent style. The Mongolians accepted, and Wan used this opportunity to clear out the better part of his warehouse stock. The Mongolian traders’ ﬁnal market was actually Russia, but they made better money by transporting the goods through Mongolia, a route that would involve two border crossings but only a half to a third of the customs dues of Manzhouli, the Heilongjiang border town where many goods entered Russia directly. They made ﬁve business trips to Beijing each year. According to them, there were at least 200 Mongolian traders in Beijing at the time. Stars Clothing also had links to trading companies in Beijing. Once when I was living with his staﬀ at the centre, I was called in to help in negotiations with a state-owned trading company in Beijing. The company eventually purchased 6,000 jackets for export to Hungary, and the manager was very impressed not only by the price but the fact that he could get thousands of jackets in a matter of hours: “no Beijing companies can do this”. On average, Stars Clothing sold 2,000 jackets a day. Their busiestever day saw three diﬀerent foreign traders purchase 18,000 jackets. Wan was unwilling to reveal exactly how much he had made, but a calculation based on a conservative estimate of 60 yuan per jacket

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put that day’s turnover at 1,080,000 yuan, and Wan’s proﬁt at 60,000–100,000 yuan (his usual margin was 5–10 per cent, though it could sometimes be as high as 30 per cent). Wan Tingguang relied on two sets of networks to run his business. The ﬁrst comprised a group of shareholders made up of six friends and relatives (including his younger brother, that brother’s father-in-law, a cousin, his own brother-in-law and two friends) who worked together and divided the takings. In the second, members of his business circle were his suppliers, in particular two younger men with whom he worked closely and who had their own big clan networks in Zhejiangcun. They hung around Stars Clothing everyday, dashing oﬀ to collect clothes from their clan members when new orders came in. Wan explained the role of these two men in his business: I’m not short of friends here, but in my kind of business friends aren’t as reliable as relatives. A clan network can mobilise a whole lot of people; it doesn’t matter how close their relationships really are, you can always get the goods ﬁrst and sort out the details later. These two youngsters make as much as we do from their deals—not by taking a commission but straight from their mark-up on the price. We also get producers bringing their stuﬀ here themselves, but not very many. See, they don’t know what kind of stuﬀ I need or when I need it . . . And if it’s someone from the clan networks of these two young men we wouldn’t buy it direct from them, as that would cause trouble. I let them make some money in the middle.

The Russian border trade Now that individual foreign traders were streaming into Beijing to buy goods from Zhejiangcun, some traders saw a new business opportunity in the cross-border trade (bianmao) and decided to venture farther aﬁeld themselves, to border towns such as Manzhouli, Suifenhe or Heihe. Active cross-border trade between China and Russia was partly a result of the collapse of the Soviet Union; at one time the border trade ran on a barter system, typically, Russian merchants exchanging heavy industrial goods or raw material (such as steel) for consumer goods from China, though smaller deals were usually transacted in cash, either in Chinese renminbi or US dollars. Zhejiangcun traders engaged in the border trade in two ways. First, some had tried establishing trading companies in border towns, then sourcing their goods from Beijing. But this arrangement was

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soon abandoned because the bureaucratic procedures involved were too much trouble. Instead, traders began collaborating with established trading companies, letting them deal with the paperwork whilst they concentrated on their own core business. In 1990, for example, one trader partnered with the now infamous Mou Qizhong and his Land Economic Group,3 earning 150,000 yuan in two deals where he supplied them with goods to sell to the Russians. The second way was to directly transport goods from Zhejiangcun to the border towns, then strike up a deal. Lian Nanqing traded in this way: There were so many foreigners about in those days. I just asked their translators where the places with plenty of foreigners were, what kind of goods they liked and so on . . . I didn’t bother signing contracts with the Russians—they took the goods and I got the money. Nice and simple. I’d see what was selling well up there, and then come and collect it from the producers back here.

Bao Yongming, another trader involved in the cross-border business, described his experience in more detail: In 1991 I’d be hearing that you could earn upwards of 100,000 yuan in one deal at the border, so I decided to give it a go. The ﬁrst time me and a friend from my home village took four ﬁve-tonne trucks full of leather jackets. We were both making clothes, but our own stock wasn’t enough so we collected from other people too. You usually had to pay some money up front, sometimes 80 per cent of the full price, sometimes a half. When we set oﬀ, we were 200,000 yuan in debt to our suppliers. We’d invested about the same amount ourselves—counting the money that we’d paid up front, the hire of the trucks and the money spent during the journey. But we sold the stuﬀ for over 500,000 when we got to Erenhot, so we made better than 100,000 overall . . . When we went the second time, we made about the same kind of money. But the third time we ended up losing over 100,000—that was because we went too late, and all the foreigners had already left. The following year me and a couple of mates went to stay in Erenhot to do business.

3 Once described as China’s richest man, former Cultural Revolution political prisoner Mou made his ﬁrst fortune swapping surplus Chinese consumer goods for four mothballed Russian passenger aircraft. He was sentenced to life imprisonment in 2000 for foreign-exchange credit frauds, a scandal that cost Chinese banks over US$35 million.

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In a further progression from engaging in the border trade, some traders even went abroad themselves. In April 1994, Xu Gong’an, who did business both in Zhejiangcun and in Yueqing, caused something of a sensation when he and his associates went to Russia on a fact-ﬁnding tour at the invitation of a Byelorussian co-operative. Xu used the visit to hold talks on the possibilities of setting up businesses in Russia and opening up new markets. In the same year, Liu Zebo was actively making plans to set up a representative agency in Russia in partnership with a cousin, but the plans went awry when the cousin’s son became addicted to drugs and the cousin too preoccupied to continue the business. Another type of business that sprung up in Zhejiangcun as an extension of the cross-border trade was the practice of hiring hotels for trading in Beijing. In 1990, Zhao Yongbao, a young businessman just turned 30, hired a room in the Ritan Hotel located on Yabao Road, a street popular with the foreign wheeler-dealers. The notice he posted on the door read, in English, Russian and Chinese, ‘Leather jackets of all kinds available for sale from this room’, where, true enough, the walls were hung with samples of the migrants’ handiwork. Over the two months of August and September, he made over 100,000 yuan. By 1992, almost the entire Ritan Hotel had been leased out to Zhejiangcun businesses and a specialist team of packers had appeared right next-door. Migrants from Henan and Hebei would wait at the ready and rush forward to catch buyers on their way out, competing to oﬀer the best price to pack their purchases, sometimes even oﬀering to carry it to the shipping oﬃce as part of the deal. In 1996, Fu Tianlang, a former street-gang leader turned successful businessman, hired and refurbished a whole building on Yabao Road to serve as a specialist export trade centre.

Settling disputes: big players and gangs The rapidly expanding business opportunities that came from retailing from counters and stalls in downtown shops and pedlars’ markets and the sudden upsurge in production for both the national and export markets prompted both traders and producers to enter into business relationships with those beyond their immediate circles of friends and relatives. As these business circles expanded and became more distinct so too did the potential for disputes that could not be

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satisfactorily ‘locked down’ either by close mutual ties within Zhejiangcun or, equally common, relying on wider connections of families and friends between Beijing and Wenzhou. The increased competition, as well as disputes and the need to ensure the smooth conduct of business, led to the emergence of new roles and relationships within Zhejiangcun, namely the rise of big players (darenwu) and the formation of gangs (bangpai ). Those who became inﬂuential big players were respected ﬁgures who were held to ‘have the capacity’ ( you benshi) to help others ‘put matters level’ (ba shiqing baiping) and whose assistance was sought as mediators not only in settling disputes but also in cutting business deals. Gangs were mostly groups of young men who ‘ﬁxed’ problems or settled scores through coercive and violent means. Both big players and gangs owed their origins to the Wenzhou migrant community’s lack of access to any other disputesettlement mechanisms, including legal means. While the practice of calling in muscle helped create criminal gangs, calling in a mediator made a number of individuals, who won respect within their immediate circles, into big players, whose inﬂuence encompassed wide networks within Zhejiangcun. Four typical modes of coping with or settling disputes described below will illustrate how big players and gangs were commonly called into being in diﬀerent situations during this period. Mutual settlement Where disputes occurred within circles of family and friends, the parties involved would usually ﬁrst try to achieve an amicable resolution amongst themselves. Mei Jianguang’s brother and brother-inlaw had a business relationship; the brother-in-law made clothes in Zhejiangcun while the brother ran the sales counters up in Shenyang, the capital city of Liaoning province in northeast China. The investments in production came entirely from the brother-in-law and the cost of leasing the counters in Shenyang from the brother. Apart from that, they had not made the terms of the relationship clear. The brother was not very prompt about payments owed to the brother-in-law; by the end of 1994, the amount outstanding came to 40,000 yuan, a sum of some consequence for the brother-in-law’s business in the coming year. The brother-in-law came to Mei Jianguang because, though not the most senior family member, Mei had the most real authority. Mei found out his brother had been gambling

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up in Shenyang with a compatriot from Wenzhou, and had lost close to 30,000 yuan. It so happened that a relative of the other gambler was a friend of Mei’s who also had some inﬂuence in their family circle. Mei went to see his friend and asked him to get the gambler to wait a couple of days for his winnings, which he said he himself would pay. The moment he said this, his friend became embarrassed, saying that gambling debts were not real debts, so they could just sort it all out later. In the end, Mei got his brother to pay the gambler 10,000 yuan and he threw in another 10,000 while his brother promised to pay oﬀ the rest in the coming year. Mei also got his brother to give all his remaining money to the brother-in-law in Beijing, adding 6,000 yuan of his own money to make up the 40,000 the brother owed. He treated the 16,000 yuan he had put out as a no-interest loan to his brother, with no ﬁxed deadline for repayment. Next, he worked on the brother-in-law to ensure the business relationship with the brother could carry on, concerned that otherwise the brother might lose all his business opportunities and become more addicted to gambling. When I ran into the brother-in-law in 1996, he told me that the family relationships had been ﬁne that year and that everyone had made a bit of money. Mei’s ability to resolve this family problem earned him respect outside his family circle. The opinion was that he was not just capable, but also upright and loyal to his friends. This goodwill transcended his immediate circle and laid the foundation for his becoming one of the big players in the community. Naming and shaming Most serious disputes in Zhejiangcun involved parties outside the circle of family and friends. The most peaceable method for resolving these was for the aggrieved party to just put up with the situation. An auxiliary tactic often accompanied this state of aﬀairs: making sure the story got spread around. Jing You, a young producer from Hongqiao working with his brother Jing Peng, was involved in one such instance: The hard thing about doing business is dealing with people. That bloke Alin owed me 12,000 yuan. He ﬁrst paid me 5,000, then, ﬁve days later he gave me 4,000, and he still hasn’t paid me the rest nearly a year later. So I planned to get some friends together and go over to his place [back home] to have it out with him on New Year’s Eve:

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ﬁne; you’re not going to pay me—well, then I’ll make sure your name’s mud. I know a lot of his friends and family. I’ve been telling everyone who knows him: ‘This Alin’s Pole Star has gone south! No money and no shame either. I don’t want his money, he can just bugger oﬀ back to Wenzhou and we’ll forget it’.

Jing You’s purpose in getting friends back home to back him up in a face-to-face encounter was not so much in the hope of getting his money as to make a spectacle of Alin, cause him to lose face in front his neighbours and extended family. This ploy of naming and shaming was normally employed during the Spring Festival holiday because of the cultural and signiﬁcance attached to this homecoming occasion. In fact, so powerful was the eﬀect of such naming and shaming that the accused often feels they have become the aggrieved party and, in some cases, tried to get their own back too. One of the main extortion rackets for the gangs in Zhejiangcun after 1992 was collecting ‘compensation for damage to reputation’ (mingyu suishi fei). No matter what a person might have, or had not, said about someone, the gangs would come around charging that a good name had been damaged: “Blackening a young man’s name is like scarring him for life. He can’t get on afterwards”, and the person accosted would be ‘asked’ to pay up. Calling in some muscle In 1993, two families from Hongqiao who lived in diﬀerent areas of Zhejiangcun, that of A in Ma village and that of B in Deng village, were locked in a bitter feud that started over something trivial. In December 1992, when a friend of A’s moved out of Ma village, he wanted to take over the lease on the empty house to open up an embroidery workshop. Things were pretty much sewnup with the landlord when B approached the landlord oﬀering a higher rent for the place, further adding that A was not reliable. B got the house. A was furious, went looking for B to have it out and, unable to locate him, dumped a two-foot-high pile of garbage outside B’s front door instead. The alleys in Ma village were very narrow and the pile of garbage attracted complaints from passers-by. B took this as an opportunity to get the better of A. He went to see Liu Wenhua, who was well-regarded in Zhejiangcun with a status similar to Mei Jianguang’s, and asked him to tell A to behave himself. Liu thought going to reprimand A would be a bit too much and turned down the request. B changed tack and asked Liu to come

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to his house, where he hoped to bring A over by shovelling two piles of garbage with the help of his brother outside A’s door. Unfortunately, by the time A got back and fetched three friends over to the B’s house, Liu had already left. They gave B’s younger brother quite a beating and smashed some furniture. This time Liu Wenhua did intervene and asked A to pay 4,000 yuan compensation. In front of Liu, A neither agreed to pay nor said that he would not, so B thought he had won and even took a large group of friends out to dinner in a fancy hotel on the strength of the forthcoming compensation. But A never paid despite further promptings from B; ﬁnally, he said he would pay when they went back to Hongqiao for the New Year. When B went to A’s home in Hongqiao to collect his money, all the neighbours, who were also A’s relatives and fellow clan members, came out and beat him up. On returning home B found that his place had also been smashed up in the meantime. After this happened, the story goes, some of the street gangs that had formed in Zhejiangcun at about that time went to visit B in hospital in Hongqiao, oﬀering to get revenge on his behalf. B did not take up the oﬀer but instead got his cousin to ﬁnd ﬁve or six men to come up to Beijing with him after the New Year. A had not relaxed his guard either and took three clansmen up to Beijing with him. These two groups of ‘bodyguards’, who were the main participants in the subsequent ﬁght, afterwards went on to become major criminal gangs in Zhejiangcun. Wu Jin’an provided another story of ‘calling in muscle’. In 1989, a man from Yueqing came to Wu’s house in Zhejiangcun and ordered 15 leather jackets. He paid a deposit up front and settled the outstanding bill when he picked up the jackets. The second time, he ordered 40 jackets, again paying very promptly. The third time, he ordered 200 jackets, paid his deposit, but when he came to pick up the jackets said he was a bit strapped for cash and would send the money in a couple of days. Wu agreed to this, not suspecting the man was not planning to show up again; Wu lost over 200,000 yuan. After that, Wu became very close with a young man from his village called A’bao. In 1993, Wu told me quite frankly: A’bao told me a long time ago I should get some ‘backup’ of my own. We country folk aren’t the bravest people. I’d hardly dare think like that. But after I got swindled, I said to A’bao, ‘go ﬁnd this bastard,

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I’ll cover all your expenses’. In the end they couldn’t ﬁnd him, but it wasn’t for the want of trying. Now if I have any trouble, I can call on them when I like.

Although the gangs came into existence at this stage because of problems in settling business disputes, they soon came to rely on criminal activities to make a living. This is because few disputes in Zhejiangcun developed into the intractable long-running feuds often seen between rival clans in rural China (including rural Wenzhou), where calling on the ‘services’ of gangsters was common enough to provide them a steady income. The diﬀerence between the Zhejiangcun community and the typical rural Chinese society in this respect may be attributed to the diﬀerently structured xi. In traditional clan lineages, the various relationships (familial, economic and social) are closely overlapping and inwardly oriented; hence, conﬂicts between such groups are diﬃcult to resolve, and feuds are often carried on for generations. But in the Zhejiangcun community, the circles of family and friends and of business connections are diﬀerentiated (albeit overlapping) because the nature and purposes of business relationships tend towards being open, rather than inwardly oriented. Thus, members not only have more scope for manoeuvre but also have a strong stake in ﬁnding rational alternatives to remaining in conﬂict. In the escalating feud between A and B, both were eventually looking for a face-saving way out. As a close friend of B emphatically pointed out: “When does feuding ever stop if both sides keep retaliating? . . . You’ve got to get on with making your living, and even if you don’t want to, your friends and family have to get on with their business”. The feud was ﬁnally settled by calling in a mediator, as described below. Calling in a mediator After the conﬂicts between A and B had deteriorated to a bitter nowin impasse in 1993, B went again to see Liu Wenhua to say that A had not only failed to pay the 4,000 yuan, but also resorted to violence. The subtext, as Liu read it, was: A obviously didn’t think much of your authority, did he? Though Liu Wenhua was up to his eyeballs in business matters at the time, he obviously could not sit by in this aﬀair as his reputation was being challenged. So, he passed the case on to Liu Shiming. Liu Shiming ﬁrst made A pay the 4,000

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yuan, to protect Liu Wenhua’s reputation. At the same time, after weighing both incidents, he decided that B should pay A 1,000 yuan and this settled the issue. Liu Shiming was one of the most highly esteemed mediators in Zhejiangcun. One day in 1993, I was chatting with him in his house when a woman of about 50 rushed in sobbing, begging Liu to ‘save’ her. Liu ran back with her to her house where they found seven or eight people in a pitched battle. Liu shouted: “Everyone stop ﬁghting!” On seeing it was he, everyone indeed stopped. Liu told the two sides to ﬁrst take their injured to the hospital, then to each send a representative round to his house that night. It transpired that the ﬁght had started when, after one family had already concluded a deal with a Russian for 200 suede jackets, the woman had quietly caught up with the Russian outside and oﬀered to sell him the jackets for less. In Zhejiangcun, this ‘climbing on’ (ban) a customer was, of course, just not done. A nephew of the family who had seen the woman talking to the Russian in the alley had gone straight oﬀ to get some relatives to come and ﬁght it out. Liu Shiming settled the case like this: ﬁrst, the two families had to pay the hospital bills of the injured of the other side, based on the receipts. In addition, the woman’s family had to pay what could be considered a 5,000-yuan ‘introduction fee’, as if the ﬁrst family had subcontracted the deal to her family, though in reality the contracting-out rate would have been much lower. When all the injured had recovered, Liu invited the two sides to dinner and I went along too. At the dinner, Liu made the standard speech that he made at such reconciliation dinners to indicate that the matter was settled: I don’t know everyone here that well [in fact he did], but getting to know you this time I ﬁnd you’re all decent people. Let bygones be bygones. If anyone feels hard done by in this and still wants to ﬁght about it, I won’t have any more to do with it!

The other common expression that Liu Shiming had used when addressing the parties during the mediation was: ‘(please) eat my face’ (chi wo de mainzi), which roughly means ‘(please) show me some respect’. For example the mediator would say to the disputing parties: eat my face, accept this judgement. The parties would then respond: since you put it like this, I cannot refuse to eat your face, to convey their willingness or acquiescence. (In extreme circumstances, mediating big players would use the diﬀerently nuanced expression ‘give

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me face’ [ gei wo yige mainzi], which carries an undertone of contempt.) The greater the respect and authority a mediator or big player commands, the ‘bigger’ his/her face is said to be, so very diﬀerent settlements may be reached by diﬀerent persons being the mediator. For instance, in mediating between A and B above, it could be said that because Liu Shiming’s face was ‘bigger’ than Liu Wenhua’s, when Liu Shiming makes the request ‘eat my face’ of someone, they would feel more obliged to do so. In other words, settling a dispute through mediation depends not so much on proposing a fair settlement and/or upholding the business conventions of the community (like the imposition of the ‘introduction fee’ above), but on bringing the two parties together through the respect commanded by the mediator. Thus, mediating in disputes served as the most important means by which persons who were inﬂuential within limited circles became big players in the community.

‘Political typhoons’ and running away By 1992, migrants from Wenzhou had already far outnumbered oﬃcially registered Beijing natives in the (natural) villages of Shiliuzhuang, Deng and Haihutun, the precincts straddled by the Zhejiangcun community. Shiliuzhuang village, for example, comprised of 782 Wenzhou household and 282 native households; Deng village, of over 500 Wenzhou and 230 native households; and Haihutun village, of 280 Wenzhou and 125 native households (interview at Dahongmen police station, Fengtai district public security bureau [PSB], 1994). The dramatically increasing numbers of migrants signiﬁcantly altered the relationship between Zhejiangcun and the local authorities. Starting in 1986, the local authorities (normally led by the Fengtai PSB), conducted clean-up campaigns (qingli ) in August and September every year, as part of preparations in the run-up to National Day on 1 October. The police made house-to-house checks to round up migrants without a proper temporary residence permit and took them away to be ﬁned. The ﬁne ranged from 300 to 500 or 1,000, or even 2,000 yuan; furthermore, some would get sent back home at their own cost. In Zhejiangcun these campaigns were dubbed ‘political typhoons’ as they coincided with the typhoon season in Wenzhou, which also hit hard, but would soon pass.

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The strategy for coping with clean-ups was simple: run. Households quickly escaped, moving out in groups of ﬁve or six families, to the suburbs, or even to neighbouring Hebei province, for the duration. But even while on the run, they continued producing and shipping their goods to the city stores, and kept in touch and swapped market information with other runaways. The moment the atmosphere relaxed, they ﬂocked back en masse. Viewed in historical context, this strategy of ‘running away’, similar to the earlier strategy of evasion, has been a constituting dynamic in the persistence of spontaneous out-migration from Wenzhou. Though appearing to be a capitulation, this ‘weapon of the weak’ puts the state in an awkward position. By running away, migrants are disengaging from the state regulatory system but without posing any direct or concrete threat to the state. Therefore, unable to pin them down or smash them entirely, the authorities just keep up with actions to drive them away, each time a costly undertaking. Liu Zebo likened their situation to a marathon where “the winner is the one who holds out the longest”. The considerable resources deployed by government in a single clean-up campaign—which, at best, can be seen as a ‘commando raid’ with no hope of ‘holding out’ in enemy territory indeﬁnitely—achieve very little when migrants are prepared to run from government attacks and hold out for as these take, and return as soon as they pull out. In a curious twist, these government clean-ups to oust the Wenzhou migrant community compelled the geographical spread of Zhejiangcun and the deepening of relationship clusters. People always headed south to wait out the clean-ups because this took them further away from the city; and they kept on heading south if the campaign continued after them. But after each bout, a few would not bother to return. Liu Zebo, who ﬂed Haihuisi village during a clean-up in 1990, stayed on in Huangqiao village, south of Dahongmen district, and the house that he used to rent in Haihuisi was taken over by yet another new arrival from Yueqing. After living in Beijing for years, old hands like him were so well connected that it did not aﬀect their business if they lived a bit further out; for new arrivals, it was best to be in the thick of things, close to the busy markets. Shared experiences of running away had also helped to cement working relationships between family and friends. As Chen Jindao told me: I came to Beijing in 1987. That September the police launched a clean-up. I went to see a cousin of mine who’d been here longer to

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discuss what to do. He said there was no need to worry. With so many of us here, if the others didn’t run away, there was no need for you to run away either. You look out for me, I’ll look out for you; we’ll stick it out and not move—simple as that. By 1989, this didn’t work anymore. They sent the police, ‘work teams’ [ gongzuodui ] and people from the township government. You had a few days notice to leave. If you hadn’t gone when they came back, they took your stuﬀ and took you in a truck to the detention centre at Qinghe.4 I could see there was no way to stick this one out, so I went to see my cousin again. We sent my nephew up to Daxing [county, south of Fengtai district] to check out the lie of the land and ﬁnd a decent empty house ﬁrst, then four of us families moved over together. As refugees [nanmin], we were brought closer together than we’d been before. Usually everyone had their own channels for doing business, but now we mixed in together. We got the younger clan members to do the cloth buying and deliveries of ﬁnished goods for all of us.

Because of the resilience of xi networks like these, neither being driven out by clean-ups nor having to up and run impinged on Zhejiangcun businesses. Zhou Niantao told me how he set up in Liushi town, the main source of leather for Zhejiangcun, in Li county, Hebei, after the ‘daqingli’ (big clean-up) of 1995: When I ran away in 1995, I put up in a hotel in Liushi. I know Liushi pretty well, because I went there often to buy leather. We made 36 jackets on the same day we arrived in the town. We started producing in bulk from the second day. We got in touch with our customers . . . We knew where our friends and relatives had gone; we had a phone, right? Although we weren’t in Beijing we didn’t lose touch with market trends. When it had quietened down again, we went back and all our friends and family arrived back at the same time too.

It is important to note the diﬀerence between running away from Zhejiangcun and having to run away in the years of the Cultural Revolution and in the early 1980s. Then, running away was a guerrilla warfare tactic, where migrants often moved to a new place to start business from scratch without either a permanent base of operations to return to or any strong support networks allowing them to instantly regroup or resume their activities. By the late 1980s, however, the migrant community of Zhejiangcun in Beijing had staked

4 A town in the Beijing suburbs with a very large quarry where, in the past, migrants were often sent to shift rocks to pay oﬀ the cost of sending them back to their hometowns.

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out its own battlefront. Before running away, people even assured their landlords that they would be back to stay once the campaign blew over, and often left their sewing machines and larger items of furniture in the care of their landlords. Before the big clean-up of 1995, a local government oﬃcial summed up the situation like this: “The strength of the Zhejiangcun community has been tempered through guerrilla warfare and constant seesaw battles”. That last phrase—‘seesaw battles’—nicely captures the expansion and persistence of Zhejiangcun in this period.

CHAPTER FOUR

INTO THE 1990S: NETWORKS ACROSS THE COUNTRY

The 1990s ushered in the transformation of Zhejiangcun into a migrant business hub of enormous ﬂows of goods, capital, labour and information. Already the runaway success of leather jackets in the late 1980s had jump-started new linkages within Zhejiangcun as well as in the enlarged local market and domestic and export wholesale trade. But all this, together with the more spectacular rooting of the Zhejiancun ‘system’ that soon followed, could not have materialised without the contemporaneous activities of the Wenzhou migrant business networks sprouting up across the country. The broader context relating to how continuing streams of outmigrants from Wenzhou—of which Zhejiancun in Beijing was but one stream—spontaneously catalysed the formation of a nationwide Wenzhou migrants’ business network in the 1990s concerns the changes in their migration behaviour from the period of the Reform. Whereas the resumption of spontaneous migration from Wenzhou in the latter period of the Cultural Revolution had seen people moving in all directions, and mostly to remote areas where political control was relatively lax, beginning with the Reform era, migrants such as the pioneering families of Zhejiangcun had followed a ‘step-up migration’ path from remote and regional locations into big cities like Beijing. However, a new trend that began in the late 1980s and peaked in the mid 1990s—one that was paramount to the development of a nationwide network centring on Zhejiangcun—saw Wenzhou migrants moving out from the big metropolises to smaller cities and towns on a ‘diﬀusion migration’ path. Thus from the 1990s, the common out-migration path marked out a trail from Wenzhou to cities such as Beijing, Shijiazhuang or Chengdu, then on to regional cities like Wanxian in Sichuan province, or Yichang in Hubei province, before heading further out to county towns. This latter trend of downward diﬀusion, which has created a ‘Zhejiangcun’ and a ‘Wenzhoujie’ (‘Wenzhou Street’) in diverse locations throughout China, might seem at odds with the textbook assumption that rural migrants tend to move from less- to more-developed

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areas. But, as one Zhejiangcun informant succinctly spelt it out for me, in time-honoured idioms: “You book-learning types ought to know the rules for divining the Future; looking for Fortune [ yundao]—you’ll only be lucky if you keep on the move!”.1

Diﬀusion migration A 1997 survey of out-migration by the Yueqing CPPCC (Yueqingshi Zhengxie Bangongshi 1997: 4) had noted the signiﬁcance of diﬀusion migration from Wenzhou thus: Out-migrants living away [from Yueqing] for over a year at a time . . . number over 200,000 people. Since the main reason for out-migration is to trade, the population is not concentrated in any particular region but is spread out in every major, medium and small conurbation of every province in the country with the exception of Taiwan.

Indeed, among the Zhejiangcun community in Beijing, this spreadingout and moving around had always been rationalised as an entirely natural, if not essential way of doing business: if business was bad in one place, it may be better in the next; therefore, one just had to keep on the move. But one very real reason for continually having to look for someplace better resulted from a characteristic ‘crowding out’ in the core business of Wenzhou migrant communities. When Wenzhou migrants settled around a competitive advantage found in one location, they tended towards identical trades, which meant that growth was inevitably achieved through increasing competition within the community itself. To avoid the stiﬂing fall-out on proﬁt margins, there came a point at which some would feel the impulse to seek out new markets in other places. When I went to Chengdu in 1997 with a friend from Zhejiangcun, the Wenzhou businessman we had gone to visit was preparing to dismantle his operations in the city and move on to Fuling, a much smaller town in Sichuan province. When I expressed surprise, he elaborated: You don’t get it—the smaller the place, the better the business. The competition is way too hot in Chengdu. I can go to Fuling, set up a fancy brand name store, do discounts on one day and giveaways the

1

Yundao, literally the ‘motions of the Way’ (of Fortune or Luck).

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next—they still haven’t seen so much of that in such a small county town. I’ve got an excellent location, and with a little bit of redecorating I can be the number one retailer in town.

When he had left Wenzhou for Beijing in 1989, this businessman had 30,000 yuan as starting capital; this had grown to 120,000 by the time he came to Chengdu in 1992, and when we visited him in 1997 before his next move, to at least 200,000 yuan. His fortunes echoed the common reasoning in Zhejiangcun that the smaller the amount of capital one had, the bigger the city one should be trading in—or as the analogy was aptly drawn: “It’s like at the railway station when the crowd all push forward together, you don’t need to push too hard yourself, you just get carried along with them”. Following this logic, when someone had made a reasonable sum of money, then smaller places were thought to provide better opportunities for a higher proﬁt margin. Another critical factor explaining diﬀusion migration was the particular dynamic underpinning co-operative relationships between Wenzhou migrant businesspeople in pursuit of proﬁts. The general outlook in Zhejiangcun was that one cannot, perhaps even should not, keep business partnerships going for too long: thus everyone was constantly actively working on building new co-operative connections and pushing out to new places. Zhao Xuqiang, who still had close contacts in Zhejiangcun, narrated why he had moved on to Liaoning province in northeast China: I came to Beijing back in 1988 and went into business with a relative. I didn’t like it so I went back home again. At Spring Festival of 1992, I ran into the son of a good friend of my mother’s. He had relatives in business up in Shenyang. We got on well so we set oﬀ for Shenyang together. He ran the counters in Shenyang and I’d do the run to Beijing to get stock. We paid half the costs each and split the takings 50:50. After two years of this, I decided I wanted to do sheepskin jackets. I went oﬀ to Panjin [a medium-sized city in Liaoning] with another friend. I was still on good terms with the friend in Shenyang. No problems there. But you can’t be partners for too long: a year or two and time’s up. You need a change of scenery, a change of people. If you stay partners for a long time, it’s easy to start having problems.

There were, of course, some who left Beijing for smaller places because of problems with partners. Wan Jiayou, who later initiated the Zhejiangcun migrants’ concern group, told me of a friend who had fallen out with some partners so badly that knives were drawn

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in the ensuing dispute; because he felt he had lost face in Zhejiangcun he had left for Xi’an. Lastly, the ever-present fact of connections between friends and relatives scattered across the country itself facilitated a momentum in diﬀusion migration. Bao Yongming, who had an extensive network of contacts in the Wenzhou business diaspora, described the period after his border-trading experience in Erenhot in 1992: After working at it for over a year, the cross-border trade wasn’t doing so well and a relative of mine wanted me to go down to Chengdu. He wanted to increase his business there but he didn’t have enough money. In Chengdu you couldn’t do consignment selling like we did in Beijing and your overheads were that much more. So that’s how I came to Chengdu. This year me and Old Dai [another Yueqing businessman in Chengdu] have opened up in Pengzhou [a small city in Sichuan]. He heard from a friend of his that a shopping plaza there was up for rent. The pair of us went in together and rented out the whole second ﬂoor. It’s 300 square metres for only 200,000 a year— really cheap. Dai’s in charge of the shop and I look after sourcing the goods. We’ve got another couple of relatives in to help out too. You couldn’t call it a partnership, but it isn’t just waged work either. The more they do the more they’ll get. If business is bad, we’ll all take that bit less. They’re both youngsters; just brought them over from home . . . How long I’ll keep at it here is hard to say. If there’s a better place then I’d move on.

A nationwide Wenzhou migrants’ business network The Wenzhou migrants who had spread to every corner of China still kept their close links with one another. These active connections, in eﬀect, summoned to life, as it were, a nationwide Wenzhou migrants’ business network that centred on Zhejiangcun in Beijing as a major production centre and co-ordinating hub for the circulation of information, capital and raw materials. Among most Wenzhou clothing traders it was held that 80 per cent of all the leather jackets that dealers like them sold across China were made in Zhejiangcun. As its reach extended far beyond Beijing, businesspeople in Zhejiangcun were able to access markets on an unprecedented scale. Zhou Niantao’s experience in 1996 demonstrated the changed nature of doing business due to these spreading Wenzhou networks:

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Just before Spring Festival of 1996, I had over 200 leather jackets in stock in Beijing that I couldn’t shift. I phoned my cousin in Chongqing. Fashions in clothes change with each incoming tide. It starts in Hong Kong and Guangzhou, and then it reaches Beijing and Shanghai. A city like Chongqing is going to follow Beijing a month or two later. The moment I told my cousin about the style of jacket I had, he said it wouldn’t be a problem. I took the clothes to the airport the minute I put the phone down. Six hours later, my cousin called up to say he’d already sold the ﬁrst jacket! If you had to run around sorting every little thing out yourself, where would you ﬁnd time to do real business?

Co-operation between Zhejiangcun and Wenzhou traders in other parts of China took various forms. First, there were the collaborations between producers in Zhejiangcun and out-of-town traders, where both parties remained independent but maintained long-term relationships. Guo Shijin, a 33-year-old trader from Dajing township, Yueqing, ﬁrst went to Chengdu in 1990 to sell electrical goods, but later opened a leather-jacket business selling stock entirely sourced from Beijing. He described his relationship with his producer partners in Zhejiangcun: Mostly we have it made to order. I take them a sample of whatever clothes I think are selling well. I set the price. They mostly don’t like to haggle. If the price of the materials goes up, they’ll let you know soon enough. Sometimes they send me samples on their own to see how they sell. In the slack season when there aren’t many customers, they’ll come to me, pushing their stuﬀ, trying to get an order. They ask a price for the samples they give, which I can bargain over. On a single trip up to Beijing, I pick up about 100 jackets on average. You don’t have to wait. They can make 50 or 60 in an evening. You get there, a few families work at it together, and you can leave the following day. So it’s no good if the producers are too small-scale and can’t ﬁnish an order. If it’s a rushed job, that’s not good for business. The clothes shop next to mine was opened by a Chengdu local. He’s been in business for years and all his stock is from proper factories. His business is nowhere near as good as mine. If he’s got some good style, well I can be straight up to Beijing and get someone from the old town to copy it for me. He hates us lot from Wenzhou!

If two distant locations were involved in a big deal, the two sides would usually ﬁnd a middleman to hold things together. A friend of Liu Shiming’s, trading in Tianjin, needed a producer in Beijing to make him 3,000 leather jackets and asked Liu to sign the contract with the producer on his behalf. In this way, Liu could keep an eye

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on quality and delivery times in Beijing. In this case, asking Liu to sign the contract also saved the friend from having to put down a big deposit: Liu’s ‘big face’, as his status as a big player in Zhejiangcun was referred to, was a surer guarantee than even a large sum of money. Of course, Liu’s friend would have made it worth his while as well. The second type of co-operation was closer and involved expanding the core xi, the sphere where business and family/friendship circles overlap, to diﬀerent locations. The Lian brothers, Lian Dinglu living in Beijing and his younger brother in Changchun, the capital city of Jilin in northeast China, provided one such example. In 1994, two producers in Zhejiangcun found themselves overstocked with brown goatskin jackets in a slightly dated style and were very worried about their cash ﬂow. In Beijing, Lian Dinglu made them an oﬀer to buy the lot at 30–40 per cent of the cost price, which still amounted to nearly 600,000 yuan because of the volume involved. He shipped them up to Changchun, where his younger brother sold them helped by friends there and in towns across the northeast. Fashion in the northeast lagged behind Beijing, so the jackets sold well and the brothers earned over 300,000 yuan from this one deal. Lian Dinglu was quite clear that he would never have contemplated buying up so many overstocked jackets if he did not have someone as close as his brother that he could trust to sell them: This is the good thing about being brothers. You wouldn’t dare do business this way with anyone else. If it was someone else, even if you knew customers up there would like the jackets a lot, they’d tell you they were no good out of fear of taking the risk.

The third type of co-operation fell somewhere between the ﬁrst and second, where the two parties did not function completely independent of each other, nor as one uniﬁed business unit. Zhou Yueqiang, a producer who specialised in making sheepskin jackets, had partners who sold the jackets in Shijiazhuang, Chongqing and Chengdu on consignment. But Zhou would still visit Shijiazhuang at least once a month, and more distant Chongqing and Chengdu every two or three months, to keep himself in the picture: I want to get involved in how he’s selling them. For example, how he sets out the stock on any counter space he’s leased; whether we should cut prices when the market’s bad and by how much—these are all my decisions. If he’s not doing a good job of selling, it directly aﬀects

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me. We both know how much money the other one is making. If I knock them out here for 300 yuan each, his selling price ought to be about 580. If he’s selling for less than this, I’ll need to adjust my price on this end too. You can’t leave your friend with no room to make money. And my friend will do his best to sell the product for me.

This type of co-operation relied on good communications and timely exchanges of information between partners to work well. In 1997, Zhou sold 10 million yuan worth of products in Chongqing and a further half million in Shijiazhuang. Co-operation between diﬀerent or distant locations did not just occur between producers and traders, but also between producers themselves taking advantage of regional diﬀerences in market trends to turn a proﬁt. Jing Peng had an older brother working in Shijiazhuang and a cousin working in Beijing, and he himself travelled back and forth between the counters he leased in both cities. Unlike in Beijing, the Wenzhou migrant community in Shijiazhuang specialised in making suits. During the peak summer season for the suit trade, Jing Peng and his cousin would go up to help his brother. In autumn, all three came to Beijing to make leather jackets. Depending on the season, Jing Peng’s store counters in Shijiazhuang and Beijing sold either suits or leather jackets. But co-operation of this kind is rare and Jing Peng himself later on gave up this arrangement. Locked into working through only the core xi and total reliance on a few close relatives or friends restricts the eﬀectiveness of this business model for reading shifts in the overall market situation. Thus, cooperating with close relatives could be very eﬃcient in individual deals, as in the case of the Lian brothers, but not for conducting business on a regular basis.

Nationwide factor markets Meshed with the long-distance co-operation among Wenzhou migrants for the making and selling of clothes, a vital component of the nationwide migrants’ business network that had emerged in the ﬁrst half of the 1990s was the organisation of factor markets, speciﬁcally, cloth, labour, capital and services such as transport, all operating on a nationwide basis.

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The cloth market The earliest cloth market in Zhejiangcun was set up in 1993, in the northern part of the Muxiyuan Light Industrial Wholesale Market, as part of its second phase of development (discussed later). Cloth was brought in from three sources. Some was supplied directly from factories in places like Gaoyang in Hebei, Zhengzhou in Henan and various cities and towns in Jiangsu province. The fabrics for summer wear came from Liusha township in Shantou, Guangdong province, most of it ‘water goods’ (shuihuo) smuggled across from Hong Kong. The most important source, however, was the cloth market run by Wenzhou migrants in Keqiao township in Shaoxing county, Zhejiang, which was the largest marketplace for light textiles in China and otherwise known as ‘China’s Light Textile City’ (Zhongguo Qingfang Cheng). In 1994, the volume of all the transactions in cloth in Keqiao reached over 8 billion yuan (interview with Yueqing city oﬃcials, 1995), a ﬁgure commonly cited in Zhejiangcun. Any news from Keqiao quickly spread to all corners of Zhejiangcun for whom Keqiao had become a ‘sister community’ because of their close trade connections. One favourite topic of conversation in Zhejiangcun was to compare the state of public order in Beijing and Keqiao, with the general consensus much in favour of Keqiao because, so it was said, the Shaoxing government was more supportive of migrant businesses and understood the rules of the market better than the Beijing authorities did. The co-operative linkages spanning long distances between those in the cloth trade were more tightly knit than that in the clothing business. Luo Chengmei started out selling traditional medicines in Yunnan but went into the cloth trade because he had three brothers and a sister in the clothing business in Chengdu. Luo himself dispatched the goods from Keqiao and his wife sold them at Chengdu’s Hehuachi Wholesale Market. He also worked with a friend in Beijing; the friend decided on the kinds of cloth based on the demand in Zhejiangcun, Luo set a price when he dispatched the goods and left the friend to sell it on for whatever price he wanted and they ﬁnally settled the accounts for several outstanding debts in one go, at their convenience. If Luo had cash-ﬂow diﬃculties, his friend paid upfront; likewise, when the friend was strapped for cash. This kind of close co-operation, more unusual in the long-distance clothing business, was quite common in the cloth trade, in part because of the

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much larger sums of money involved and the greater stability of the relationships maintained between the traders. The close business ties between Zhejiangcun and Keqiao made things easy for businesses on both sides but also increased the associated risks. In the summer of 1996, a style of long linen skirt wholesaled in Zhejiangcun for 45 yuan each (after a mark-up of 20 yuan). Usually, the prices of seasonal items like skirts dropped by over 50 per cent after a month or so of coming on the market, but this fabric was so popular that a skirt made of it could still wholesale at 30 yuan or more even when the next season’s fashions had come in. So, at the start of the summer season of 1997, some producers were still keen to make skirts from this linen and Luo Chengmei, who also reckoned that the demand for the cloth would remain high, bought up a large volume in Keqiao at a relatively low price, hoping to sell it in batches at a high mark-up. Almost as soon, however, the retail price of the skirts plunged to only 30 yuan, and further within days. This falling price in Zhejiangcun had a knock on eﬀect in Keqiao; the price of the linen in both Keqiao and Beijing dropped heavily and Luo Chengmei lost tens of thousands. The labour market From around 1990, Zhejiangcun businesses began recruiting workers on a large scale from provinces other than Zhejiang, particularly Hubei, Jiangxi and Anhui. Private ‘labour introduction’ agencies (laowu jieshao suo) in Yueqing, most of them run by women, played a key role in this recruitment. The ﬁrst of these had appeared in the mid-1980s, essentially as underground operations, mostly recruiting workers from within Zhejiang province for the TVEs in Yueqing. Later, the scope of recruitment extended to the surrounding provinces like Anhui and Jiangxi and catered to the growing demand from out-migrating traders. The agencies were legalised in 1990. By Spring Festival of 1994, Hongqiao, a small town with a population of just 30,000, had at least 69 labour agencies supplying an estimated 30,000 workers a year (interview with Hongqiao township government oﬃcials, 1994).2 2

In 1994, the Hongqiao branch of Yueqing BIC initiated the setting up of a labour service centre where private labour agents were required to rent units, a

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Most labour agencies operated from premises commonly converted from the owner’s private house, with the business oﬃce on the ground ﬂoor and dormitories upstairs. Migrant workers stayed at the agency whilst waiting for to be recruited. In the case of businesses away from Wenzhou, recruitment took place during the Spring Festival holiday when the bosses returned to their hometowns. After being told where they were to be taken and what they would make (leather jackets, suits), interested workers came forward to be interviewed. To test their skill the boss would ask them to make a suit jacket collar there and then from scraps of cloth ready at the sewing machines in the agency oﬃce. After they discussed wages, the boss paid the agency an introduction fee, calculated roughly as a third of the monthly wage. (In 1996, wages usually went on a scale of between 1,000 and 2,000 yuan and the introduction fee ranged from 300–600 yuan.) The ﬁnal step was to sign a contract already completed by the labour agency; the employer and worker only had to add their thumbprints to the document. There were four copies of each contract, one each for the employer, worker, agency and local BIC. The contracts stipulated that wages would be made up in full at yearend, with 10 per cent paid each month to cover living expenses. This was acceptable to most workers since their bed and board were paid for and they would be busy all day in the workshop without much chance to spend any money. If workers saved a few hundred from their wages every month, they would have a decent lump sum at the end of the year. For the employers, this arrangement saved dispensing a large amount of cash throughout the year and allowed them to settle wages after the monies owed by their trader partners came in at the end of the year. Prospective workers from the various provinces were usually brought to the labour agencies by a ganger, typically, someone who had been a tailor in their hometown, often running tailoring classes for those from the surrounding countryside. After three to six months of training, they brought their students, between four and ten at a time, to

condition of renewing their licences. (Previously private agents had been located mainly along National Route 107.) The centre had an oﬃce to regulate good practice among agents, particularly concerning wage levels and working conditions; it also arbitrated in labour disputes and was very busy during the Spring Festival homecoming, when workers who had problems with their employers came in to seek assistance.

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the labour agencies. According to Hongqiao township BIC, at the time of Spring Festival 1997 there were about 100 of these gangers active in the region. The introduction fee paid by the recruiting bosses would be split 70:30 between the ganger and the agency. Many gangers were said to earn over 100,000 yuan a year. Among those who I met was one from Taishun county, a remote mountainous part of Wenzhou prefecture, who started out by bringing his family members to Yueqing and had expanded his operations into a multi-provincial enterprise, reportedly earning 240,000 yuan in 1995. (His name card identiﬁed him as “Director of the Wenzhou representative oﬃce of the Yueqing career development agency”, in fact an entirely ﬁctitious organisation.) Another ganger from Wuyi county, also in Zhejiang, had herself formerly gone to work in Beijing through a labour agency then, in 1995, started supplying workers and, in 1996, earned about 50,000 yuan. After 1996, a new form of labour market emerged in Zhejiangcun itself when groups of experienced workers began renting their own accommodation and waited to be hired, normally taking on shortterm employments of three or four months, sometimes just a few days when a rush order had to be ﬁlled. This labour model had its origins in the practice of ‘borrowing’ labour from within a circle of family and friends. Given that producer households in Zhejiangcun each had diﬀerent busy and idle periods, producers who had to ﬁll a big order at short notice could ‘borrow’ workers from among their circle of relatives as an alternative to subcontracting work to other households. A young woman from Hubei province who had worked in Zhejiangcun for three years and was the ‘leader’ of a group of nine workers living in Hou village was, as she tells it, the ﬁrst person to explore this employment arrangement in 1995: We thought it wasn’t fair when the boss got us to go and help his relatives out when they were busy. We signed our contract with the one boss and, of course, we’d do whatever work he had for us however much or little that was. But if he’s lending you out all over the place, well I won’t stand for that. When there’s no work to do the boss scowls and growls at you; he thinks you’re eating at his expense for nothing. [In 1995] me and some friends talked about it and decided not to go to Wenzhou at Spring Festival [to look for work] but come up to Beijing ourselves before National Day [the peak season in Zhejiangcun]. We’d work for whoever needed us and we’d set a piece rate for the work. . . . I had no problem renting the house or ﬁnding work. Some of my old bosses helped out.

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More recently, some businesspeople set up Yueqing-style labour agencies in Zhejiangcun to cater to the community’s needs. One, near the Muxiyuan roundabout, opened in 1994, using papers from suburban Tong county. Another, in Deng village, opened with support from the Fengtai district government, and a third, in Gaozhuang village, was a branch of an already established Beijing labour agency. These agencies did not necessarily fare better than those in Yueqing and were hampered by the tight restrictions on migration in Beijing that made it diﬃcult for them to have large numbers of workers ready and available for jobs. They were also more trouble to run, the owners complained, as they were ‘too close’ to their clients, and employers and workers in dispute would be straight over, wanting them to sort it out. The money market There were two levels of money lending and fund circulation relating to migrant businesses, short-term loans between friends and relatives at no interest, mostly within Zhejiangcun itself, and the informal ﬁnance societies connected with home communities in Wenzhou. In Zhejianchun, almost without exception when talking about the signiﬁcance of friends and relatives, businesspeople would emphasise the convenience and the enormous importance of being able to access interest-free loans at any time. Take the example of a producer due to go to Hebei to buy a large quantity of leather but short of cash. In this situation, he could simply get the trader selling his clothes on consignment to settle their outstanding accounts. But if he constantly chased others over debts, they might think of him as too much bother to work with. Conversely, if a trader was frequently unable to provide money when his producer partners needed their accounts settled, this might aﬀect his reputation in their business circles in the future. Therefore, for both producers and traders, friends and relatives were an important source of ready cash to ensure their relationships with business partners can carry on smoothly. In 1997, Li Wenhu, a successful trader, was thinking of leasing space in the recently completed Dong’an Market, a high-proﬁle department store in Beijing. In the time it took to pull the necessary strings to get hold of two of the main halls, the rent was almost due. Li was able to raise three loans of 200,000; 300,000; and 500,000 yuan from three friends within two days. According to the norms

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observed in Zhejiangcun, such loans should be repaid quickly, within a month or two, but Li was not the least concerned: I’ve got a lot of my own money out on loan to other people, also to friends to help their businesses, so I can start collecting the repayments during the next couple of months. Not only that, I only have to say the word to my [consignment] clients and I can be a bit less prompt settling my outstanding accounts. We usually never get behind in our payments, so if you let it happen on the odd occasion, they won’t mind.

If someone had lost money in business or wanted to expand their operations and needed to borrow money over a longer term, they turned to the second level of the money market: going back home to borrow either from friends and relatives, or through a ‘go-between’ or from informal ﬁnance societies. Loans from friends and relatives in Wenzhou were, however, always charged interest, unlike in Zhejiangcun; furthermore, if one borrowed from relatives in Wenzhou, one did not just owe them the money but was also in debt for a favour. This hometown option was, therefore, not very popular, and it was thought to be better to borrow from someone who was not related. ‘Go-betweens’ could be either professionals or friends. The professionals were mostly women who used their networks of contacts to lend and borrow, making their money from the diﬀerence in the interest rates. Though the loans raised were usually relatively small and the interest was high, for those who had lost money in business, this option was useful as it was easily arranged and available to anyone. Using friends as go-betweens—mostly men who relied on their prestige or ‘face’ to facilitate loans—was the more popular option for businesspeople looking to expand an already successful operation when, for example, they may have no security to oﬀer against the prospective loan. A friend acting as a go-between would need to have, ﬁrst, access to the prospective lender; second, enough money of his own so that the lender was conﬁdent of repayment if something went wrong; and lastly, suﬃcient standing in the community so that he could be depended upon to resolve any diﬃculties that may arise. A credible go-between would need to have the right balance of these prerequisites; for example, if the go-between was too close to the borrower, the prospective lender may well hesitate to get involved. In general, lenders preferred dealing with well-todo and reputedly honest go-betweens, though if a lender was already

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on close terms with the go-between, then his clout in taking action if the borrower defaulted would be a greater consideration than his ﬁnancial standing—the ‘harder’ the go-between, the better. The interest on loans raised through go-betweens had to be paid at the end of every year and the rates bore little relationship to the oﬃcial statebank rates, but were more linked to general perceptions of the prevailing climate—when business was good, rates were high; at times of social unrest (such as during 1989 and 1990) the rates were higher still because of the greater risk perceived. The third way of raising capital in the home community was by organising or participating in mutual or friendly ﬁnance societies, and there were a considerable number of ‘professional’ organisers in the Wenzhou area. These were people not in need of capital themselves, but who loaned out monies collected by the society to outmigrant businesses at higher rates of interest and would organise several societies simultaneously dealing with large sums of money, something the out-migrant businesspeople did not have the time or energy to do themselves. Of the diﬀerent kinds of friendly ﬁnance societies organised as a means of mutual borrowing (or saving), the most common form in the Wenzhou area was the chenghui, a type of revolving credit association with complex organisational arrangements. One such an initiative was the ‘50,000 Society’, organised by a certain Zhang in 1985, which ran for a ﬁve-year period (so named because the total amount pooled amounted to this sum). Zhang had lost money in business in Beijing in 1984, and when he next returned home for Spring Festival, got his wife to call together ten other people (families) to set up a chenghui. Those who took part were all also women. The basic principle of the chenghui, like most other friendly ﬁnance societies, was that every member deposits a set sum into the society’s pool every a few months and took turns to withdraw the entire sum of their contribution in rotating order, plus the interest accrued over the duration. Mrs Zhang visited the 10 families one by one; except for three of the members, most were not particularly bothered about the order in which they took their turn (every six months) to withdraw their money so this was eventually determined by drawing lots. The two members who wanted to be ﬁrst and second in the order needed the money to go into business and had helped Mrs Zhang to organise the society. The member who asked to be the last but one to make her withdrawal was a poor cousin of the Zhangs who planned to use the money to

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pay for her child’s college education a few years down the road. Withdrawing money later meant that one accrued more interest, doing so as a means of saving (the rate in Wenzhou was then about 2 per cent a month). Apart from the organiser, friendly ﬁnance societies usually consisted of three categories of members, again usually all women: those who wanted to raise money quickly to go into business; those like the Zhang’s cousin, and usually a relative of the organisers, who wanted to accumulate as much interest as possible from their savings to cover future expenses; and, lastly, those who took part mainly to help the organiser out, but still stood to gain from the interest that accrued monthly which was much better than the bank rate. Many of those taking part in these friendly societies in the Yueqing and Yongjia areas were those doing business away from home, usually getting someone to pay in and collect money on their behalf. In the example above, the Zhang’s poor cousin would be seen as a prime candidate to act as this kind of proxy since it was unlikely that the Zhangs would run oﬀ with the ﬁrst 50,000 yuan and leave the cousin in limbo—having the organiser’s relative as almost last in line to make a withdrawal increased everyone’s conﬁdence in the enterprise. In the early 1980s, another type of ﬁnance society evolved, the taihui or ‘raising societies’, a combination of the chenghui and gobetween networks. The organisers promised very high rates of interest to those who willing to lend money to them, sometimes as high as 10 per cent monthly. The ‘raising’ (tai ) part of the name indicated that they constantly raised the rates of interest they paid their members. The higher-level members of these organisations ran several societies at the same time, paying oﬀ members in one with the takings from another. However, if one of those at the top of the pyramid ran oﬀ with the money collected, the set-up collapsed, sometimes leaving members in dire circumstances (as was the experience of Liu Zebo in 1983, just before he ﬁrst visited Beijing). Transport services As the centre of a nationwide business network, Zhejiangcun naturally developed its own long-distance transport services: shipping agents and long-distance truck hauliers, as well as ticketing agencies for both rail and air. There were ﬁve or six shipping agents in

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Zhejiangcun, mostly joint ventures between Wenzhou migrants and Beijingers, like Bei’er Agency, a partnership between two businessmen from Wenzhou and two Beijingers. The Wenzhou partners took care of business within Zhejiangcun, such as getting clients, one of the Beijingers looked after the licensing, tax and other paperwork, and the other was responsible for ensuring the timely transport of the goods—a role facilitated by his being related to an employee of Beijing Railway Station. In 1992, six people from Yueqing formed a joint-stock company called Shengjin Automobile Services. They spent 950,000 yuan to buy luxury coaches and opened direct bus routes between Yueqing and Beijing (a distance of 1,953 kilometres by road) for transporting goods and passengers. Their shipping charges were more expensive than other companies, but because they oﬀered next-day delivery and operated nine major routes to cities with large communities of Wenzhou migrants, they were particularly popular given the increasing importance attached to timeliness in the national business networks. Aside from Shengjin, most of the other trucking teams never bothered to set up as formal businesses but posted advertisements all around Zhejiangcun, as well as in towns in Yueqing and Yongjia. By 1995, the competition from these road haulage companies caused several of the shipping agents, including Bei’er, to close down. Transport services were so proﬁtable that the competition sometimes turned nasty. One of the big stories of 1992 in Zhejiangcun was the ﬁerce war launched by Zhou Zhuohai and his Yueqing partner against a competitor in the cloth-transport business between Beijing and Keqiao, in which many of the gangs then taking shape got actively involved. In the end, the two sides came to a compromise, with Zhou taking charge of the Beijing end of business and the (former) competitor running things down in Keqiao. There was also money to be made in booking train and air tickets. With so many Wenzhou migrants in Beijing, even with the additional three extra daily ﬂights from Beijing to Wenzhou in the run-up to Spring Festival from the early 1990s, all tickets would be booked up over a month in advance at the oﬃcial outlets. But in Zhejiangcun, as long as one was prepared to pay 50–100 yuan extra over the ticket price, a seat could be got on pretty much any ﬂight. For Spring Festival of 1998, Chen Cunsheng and two others chartered a whole ﬂight from Tianjin, a large city east of Beijing, to Wenzhou and arranged buses to take passengers from Zhejiangcun to Tianjin air-

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port; with free passage for themselves, they made a proﬁt of 6,000 yuan each. The large number of Wenzhou migrant businesspeople travelling to Zhejiangcun created a new demand for temporary accommodation. Taoyuan Hotel, a simple hostel run by the Haihutun Longdistance Bus Station (a state-owned transport company) was the only hotel in Zhejiangcun for some time and was always fully booked. In 1996, several relatives of Liu Shiming converted what had been the hostel of the state aerospace department in Zhejiangcun into the Bangkelou Hotel, especially catering for businesspeople from Wenzhou. This hotel was of a higher standard than anything else in the entire Dahongmen area.

Reinventing the home clans Paradoxically, with the formation of the nationwide migrants’ business network and the mass out-migration of Wenzhou natives, home villages acquired even more, rather than less, signiﬁcance for their business. Home villages and towns were not only places where capital was mobilised, but also where the long-distance connections between diﬀerent migrant destinations were co-ordinated. Thus, despite, as well as because of, mass out-migration, businesspeople tried hard to ﬁnd new ways to maintain their home networks and re-invigorate traditional organisations and activities.3 One innovation reconciling tradition with contemporary purposes concerned the reinvention of hometown lineage organisations or clans. The Zhou clan of Xiyang village in Wuniu township, Yongjia, had three branches ( fang) totalling around 70 households; the ﬁrst and most numerous, with 28 households, the second branch with 25, whilst the third, whose members were also thought of as the least able, had only 15 households. The majority of the clan, particularly members from the ﬁrst branch, had out-migrated, and the consequent disparity between the branches posed serious challenges

3 It was not uncommon for the big houses built by migrants in the home village to remain unfurnished because their owners did not know when, or indeed if, they would return. One Zhejiangcun trader told me he would buy a ﬂat in Beijing when he earned a half million yuan, and that eventually he was prepared to live “anywhere”.

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to clan solidarity, apart from making it diﬃcult to carry out even the basic routine ritual functions. When the new Zhou clan hall was built in 1992, the clan elders decided to throw the three branches into confusion, so to speak, and reconstituted the entire clan into three ‘teams’ instead, in each team pairing oﬀ the more able with less successful members and, most importantly, pairing up families with many members working away with ones where most had stayed at home. The new Zhou teams were then responsible for hosting the three main activities that the clan organised over the year: the celebrations for the birthday of the local bodhisattva (on the 19th day of the tenth lunar month); the Tomb Sweeping Festival (Qingming jie) in April when oﬀerings are made to the clan ancestors; and the Dragon Boat Parade (hua longchuan) held on the ﬁfteenth day of the Spring Festival celebrations. Since the three teams were balanced in terms of resources and migrants versus stayers, all the activities were properly conducted, with a new element of competition between the teams. When I visited during the Spring Festival of 1996, an old man, formerly belonging to the second branch and assigned to the ﬁrst team, told me he was more than satisﬁed with the new arrangements: Everybody’s much more determined to be the best now . . . Last year at Tomb Sweeping, they gave free booze to all the old folk over 65— we didn’t have to pay a penny! You can bet the lot organising it this year will do the same, or they’ll be a laughing stock.

This same old man took me to visit the shrine to the local tutelary bodhisattva, which was very crowded. It used to be that the women would come to pray on the ﬁrst and ﬁfteenth of every lunar month, he said, but because so many people were now working away, the shrine was quiet through most of the year until they all came home for Spring Festival. I asked what he thought about this show of seasonal devotion after almost a year’s neglect. He seemed quite comfortable with it; since people now could make much better oﬀerings than before, he was sure that the bodhisattva was happy about this as well. I was later invited to watch an opera performance paid for by a producer in Beijing at the temple in the neighbouring village. Evidently, in 1995, he had been robbed by a gang, and when he returned for Spring Festival, had come to the shrine every day to pray for protection. Sure enough, his luck had turned. He had hired the opera troupe to give thanks to the bodhisattva and invited everyone to come and enjoy it too.

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Qiansanfang village, also in Wuniu township, also reinvented its clan in a similar fashion so that traditional community activities could be carried out properly, in particular the Dragon Boat Parade. The village, essentially one clan, had been divided into groups of twelve households each by drawing lots. Each group took turns hosting the Dragon Boat Parade, which entailed preparing the ritual items needed for the ceremony at the local shrine, paid for by collecting money from all the villagers, as well as keeping the parade in order. The hosting group was responsible for the upkeep of the shrine over the coming year; those remaining in Qiansanfang tended to the everyday maintenance throughout the year while those working away did their part during the Spring Festival holiday and gave more money. Besides maintaining customs and traditional forms, these ‘reinvented’ clans lessened the estrangement between the families staying behind and those working away in the changing times.

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Photo 1. A small lane in the heart of Ma village, where migrants came to chat, exchange information and settle deals, particularly in the evenings after the day’s trading (Zhejiangcun 1992).

Photo 2. Part of a household workshop-cum-residence in Haihuisi village, in a house rented from a local resident (Zhejiangcun 1994).

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Photo 3. Unloading collectively purchased leather at a producer’s premises in Gaozhuang village; the local owner had recently expanded his compound to take in more migrants (Zhejiangcun 1994).

Photo 4. Private labour agents in the local government-sponsored Labour Service Centre in Hongqiao (Yueqing 1997).

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Photo 5. The Yueqing headquarters of Shengjin Automobile Services, which served major destinations in the nationwide Wenzhou networks (Yueqing 1997).

Photo 6. An old clan house in Heshenqiao village, Hongqiao township, with new houses built by out-migrants towering behind (Yueqing 1996).

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Photo 7. An open-air market in Hou village specialising in seafood, a favourite among out-migrant Wenzhou natives (Zhejiangcun 1995).

Photo 8. Rushing garments from workshops to Muxiyuan Market, the ﬁrst government project in Zhejiangcun (Zhejiangcun 1992).

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Photo 9. Jingwen Market under construction and a row of Yueqing-style restaurants, among the many migrant businesses that rushed into Nanyuan Road when the project got underway (Zhejiangcun 1993).

Photo 10. JO Compound, Liu Shiming’s model development in Jiujinzhuang village before the 1995 demolitions (Zhejiangcun 1995).

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Photo 11. HQ Leather Centre, one of the migrants’ residential-cum-production compounds developed after the 1995 demolitions, was converted from the premises of the state-run HQ Rubber Factory (Zhejiangcun 1997).

Photo 12. Local public utilities including rubbish and sewage disposal were unable to cope with the growing migrant population, which made for a sadly degraded environment with some lanes impassable—except by the ubiquitous Wenzhou-style red trishaws (Zhejiangcun 1995).

CHAPTER FIVE

1992–1994: GOVERNMENT COMES TO ZHEJIANGCUN

The vastly widened scope of operations with the creation of a nationwide migrants’ business network centred on Zhejiangcun in the early 1990s did not by any means dampen the desire of traders for further penetration into the state-controlled retail sector in Beijing. Soon after making inroads into the formal retailing sector, Zhejiangcun traders saw new opportunities downtown when the large state-run department stores could also make arrangements to ‘bring the factories to the shops’, though these were far more tightly regulated than the small state-owned shops that were the ﬁrst to be given the autonomy to operate such schemes. In the early 1990s, these large state enterprises implemented a multi-layered system of contracting out: the enterprise signed a contract with its parent agency (usually industry or commerce bureaux); the various individual department or ﬂoor managers signed contracts with the enterprise; and individual counter managers signed contracts with their respective department/ ﬂoor managers. The terms of the contracts at each level were similar, namely, the party of the lower level guaranteed a targeted turnover to the party of the higher level and could retain a high proportion of anything that exceeded that quota as their own proﬁts. Again, counter and ﬂoor managers could decide how retail space was run but—in theory—were not permitted to lease it out to a third party. Nevertheless, Zhejiangcun businesspeople set their sights on getting a foot in the door, and once again, personal connections with the relevant managers were seen as the key.

Retailing in big state stores When I ﬁrst got to know Zhou Hongqiu in 1993, he had just leased a counter space in Beijing’s large Xidan Shopping Plaza—having expended a great deal more eﬀort than Zhou Zhuquan did in 1986 to get into the Hongmei Clothing Store, but showing the same persistence in chasing a connection:

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I went straight to talk to the manager of that ﬂoor in the Plaza. The moment he heard I was a migrant private businessman, he told me that it would be ‘absolutely impossible’ to rent out space to me. I went back two days later, fetching them cups of tea and handing out the cigarettes. When they sat down, I’d sit down with them; if they started chatting I’d join in whenever I got the chance; and if the management had had enough of me, then I’d chat to the cleaners or other oﬃce workers. I did this on seven diﬀerent days—I’d had enough of it myself in the end! But I thought I’d give it one last go—try to ﬁnd a way to visit the manager at home. But I didn’t know the address. So I hung around the exit of the Plaza, and when he came out after work I followed him. When he looked back and asked me where I was going, so I just pointed in the direction he was walking and said: up ahead. When we got to his building, I asked if I could come in for a bit and he replied: no way! Still I didn’t let it go. I went to their oﬃce again the next day. Somehow, I managed to get some sympathy out of one of the older accountants who said to the manager, ‘It’s not easy for him either you know’. The manager told me to leave my pager number and to get out immediately. I’d just got to Liubukou when the pager went oﬀ. I found a phone, rang the number and asked who it was. A ferocious sounding voice says, ‘It’s me! Come to the Plaza tomorrow and we’ll check that your paperwork’s in order!’. It was the bleeding manager! Later on he said to me: ‘You’re like a lump of sticky putty, you—get it onto your ﬁngers and you can’t throw it away if you try!’ When I went to show them my permits I took some of my clothes along with me. The procedure after that was to give them a copy of the factory licence, the trading licence, an original tax registration certiﬁcate, my trademark registration and then the price list, both factory-gate price and retail. Arranging all that was no problem, what mattered was getting round the people.

On Chinese New Year’s Eve of 1996, I accompanied Liu Dong when he went to oﬀer his ‘season’s greetings’ to the managers of the various state department stores where he sold his clothes. He made two diﬀerent gift presentations. If the manager was a recent acquaintance, he visited him at home with cigarettes and alcohol worth about 300 yuan, plus 5,000 yuan in cash. If the relationship was already quite well established, he brought between 5,000 and 10,000 yuan in cash to the oﬃce to be shared amongst all the staﬀ in the department. Liu explained his reasoning: If your relationship is already pretty good, it doesn’t really matter how much money you give, the point is to make a bit of a splash. It’s not just the manager that we have to deal with, you have to look after the others too. But if you’re new to the shop, you have to target just one or two managers.

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Having covered all the managers that afternoon, in the evening Liu Dong turned his attention to government oﬃcials. To them, however, he gave only gifts: You can’t give cash to the BIC, the tax oﬃce or the police. They all want to keep up appearances, don’t they? If they take your money without a particular reason, they’re afraid that you may think they’re corrupt and look down on them. Face, money, understanding and respect are all important.

Larger state-owned department stores leasing counters to migrant businesspeople brought about a blurring of the distinctions in oﬃcially sanctioned practices and terminology for such arrangements. In 1985, the government had tried hard to distinguish the scheme for ‘joint operation’ or ‘bringing the factories into the shops’ (lianying or yinchangjindian) from simply collecting rent by leasing out space (chuzu). By 1992, however, most of the larger stores were no longer concerned with such distinctions, terming all leasing arrangements as ‘joint operation’ and disregarding all other prohibited criteria. In practice, the term ‘joint operation’ became synonymous with simply collecting rent, which clearly indicated that leasing out space had become the norm. Ironically, then, it was the practices of large department stores in the state sector that made state regulations ultimately unworkable. The involvement of large state enterprises in leasing out retail spaces also contributed to a sharp rise in the traders’ overheads because they charged much higher rates than the small shops. In the mid-1990s, the standard rate was set at 15–20 per cent of turnover, varying with the location of the store and of the space leased within the store. The Town and Country Trading Centre (Chengxiang Maoyi Zhongxin), a large department store, set a high-water mark for this in 1995 by charging a rate of 28 per cent of turnover plus a guaranteed minimum payment that rose year on year. Between 1986 and 1988, the monthly minimum payment had averaged around 4,000 yuan for each counter, but in the 1990s, when open shelving allowing customers to browse themselves became the vogue, Town and Country stipulated a monthly turnover in the range of 200,000–400,000 yuan from a 20-metre-square ﬂoor space, and in the month running up to Chinese New Year, required each counter to make at least 300,000 yuan. Tenants who could not manage that would be in danger of losing their lease.

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Arranging the paper trail Another paper requirement that needed circumventing and ingenuity on the part of Zhejiangcun traders arose with the introduction of VAT in January 1994. This required furnishing receipts showing the costs of all goods coming into shops for the calculation of tax after the necessary deductions. The traders selling goods on consignment naturally had no such documentation, but quickly found a way to obtain receipts—by buying them. The ﬁrst option was to buy receipts from licensed factories, especially from manufacturers in Shanghai’s Pudong district and certain factories in Guangdong. Because of the tax concessions they enjoyed, these manufactures only had to pay an income tax amounting to 4 per cent of the value of their sales, which was calculated from the receipts they issued to customers. Zhejiangcun traders bought receipts from them at a mark-up of 4.5–6 per cent of face value, which left the manufactures a proﬁt of 0.5–2 per cent of the face value of the receipts that they were selling. Many traders also bought receipts through friends in TVEs back home in Wenzhou. The second, more popular option was to buy receipts from the cloth market at Keqiao. Many textile buyers such as the Zhejiangcun producers and specialist cloth traders (like Lou Chenmeng and his partner in Beijing) had no need of receipts and were not bothered to collect them. But as the textile factories in Keqiao, or those with sale outlets in Keqiao, were proper businesses that could issue receipts, these surplus (uncollected) receipts were sold for between 1.2 per cent and 5 per cent of their face value. Lastly, there was the option of buying fake receipts for between 10 and 50 yuan each from Baigou town in Hebei province, which hosted a large market famous for all manner of cheap, or fake, goods. Whichever option the traders chose to buy the receipts they used to satisfy the VAT requirements entailed co-operation between knowing parties that, in turn, strengthen the scope of the nationwide network of connections spreading out from Zhejiangcun.

Large-scale leasing in the private sector Around 1992, large non-state-owned retail centres aimed at a highincome clientele began to appear in Beijing. Most companies investing

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in these projects were private, including foreign investments, spin-oﬀ companies of state-owned enterprises or even government departments. As real-estate developers, they were not interested in running the retail space themselves, preferring instead to sign one-oﬀ leases for large amounts of space, which allowed them to recoup their initial investment in the shortest possible time. The operation of these centres had a greater impact on the fortunes of Zhejiangcun than the business generated through retailing in the state sector. First, these real-estate ventures invested heavily in advertising and interior design and display, which provided a better positioning for Zhejiangcun products among an upmarket clientele. Second, these retail spaces were let by public tender with clear permission to accept outside private traders and were easily accessible to migrant businesspeople. Third, with the operation of large-scale leasing, the subsequent business of subletting required a far bigger capital outlay than taking on or subletting modest counter spaces in the state-sector shops, which dramatically changed the role and connections of some traders within the Zhejiangcun community. Probably the earliest to experiment with leasing out for large-scale subletting was HW Plaza, situated opposite Xidan Shopping Plaza, at the beginning of 1991. The property owners laid out clear regulations that they would not rent to individual traders. One of the managers explained the thinking behind this: An individual trader will rent maybe just one counter or one display shelf, which is hard for us to manage. And they’re all migrants, they might run oﬀ at any time. We only deal with a few proper, decentsized companies. They can sublet the space we rent to them. We don’t get involved in how they choose to deal with the individual traders, but we keep a strict watch on how the bigger companies behave. We let the companies beneﬁt from any price diﬀerence between what they rent from us and what they sublet for. That motivates them to run it properly.

Some Zhejiangcun businesspeople quickly claimed to be ‘decent-sized companies’ to secure leasing deals in such centres. Posing as middleman companies leasing large ﬂoor areas for subletting naturally required a large amount of cash. The HW Plaza management charged US$5 (then around 40 yuan) per square metre per day for retail space on the third ﬂoor. Zhejiangcun middlemen then sublet whole counters or shelving racks (rather than space by the metre), collecting at least 6,000 yuan for a 1.5-square-metre shelf, or four times

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the Plaza rates. But HW Plaza required the rent to be paid in one go, which amounted to 900,000 yuan for a six-month lease on one ﬂoor (calculated on a basis of 3,000 yuan monthly per counter, and 50 counters per ﬂoor). But the traders did not see ﬁnance as a major problem, as Yao Xin’an explained with obvious satisfaction: Look—say I pay 900,000 up front; I make 300,000 back from the ﬁrst month’s rents. And we all take deposits now, in case the tenants choose to leave suddenly. The deposit for one counter is 15,000 yuan, even 17,000 in some places. That comes to about the same as I paid the store. There’s just a short time gap between the paying and the collecting, but as long as you can balance your cash ﬂow you’re OK.

More critical than money in the longer run was for these leasing middlemen to muster the trust and support of enough individual traders to sublet counters from them. And with this, the ability to mobilise business ‘followers’ became increasingly important for the big players in Zhejiangcun. Large-scale leasing led to a more clear-cut specialisation in business in Zhejiangcun. Most of those who had formerly engaged in both trading and production now tended to concentrate exclusively in one core activity. For producers, retailing through big department stores and the upmarket retail centres, there was a higher quality requirement for their goods. For traders, paying such high rents to the middlemen for retail premises meant much greater pressure to run their businesses proﬁtably. With specialisation, producers and traders naturally become more interdependent, and business circles expanded, with more overlapping between diﬀerent circles. The entry of Zhejiangcun businesses into the mainstream downtown retail sector, compounded by other factors, also dealt a blow to many state-run garment factories in Beijing. The Xuanwu District Clothing Company of Beijing (Beijingshi Xuanwuqu Fuzhuang Gongsi, 1995) reported that, due to the competition from Zhejiangcun, its output in 1991 went down 30 per cent on the previous year and had continued to fall by 59.2 per cent in 1992, then 77 per cent in 1993 and by 80.6 per cent in 1994. Employing sales assistants Unlike their counters manned by shop employees in the state-owned department stores, for their counters in some small state-owned and

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collective shops as well as in the large private retail centres, Zhejiangcun traders hired their own sales assistants. Sales savvy was seen as critical to business in these upmarket retail ventures, and whenever a group of traders got together, the performance of their sales assistants often came into the conversation. These employees (almost all female) were usually either Beijingers or Hebei, Jiangsu or Anhui migrants in Zhejiangcun, but not young women from Wenzhou who, apart from expecting higher wages, would reveal to customers the Zhejiangcun (migrant workshop) origins of the merchandise with their heavy Wenzhou accent. The Beijingers were mainly laid-oﬀ workers from state-owned or collective factories and often recruited from among those previously assigned to the traders’ counter spaces. Assistants from the same hometowns but working for diﬀerent bosses kept in close touch and their networks were so close-knit as to sometimes function as an informal trade union: if one employer raised wages, soon all the employers would face similar demands from their staﬀ. Eventually, Zhejiangcun employers forbade their staﬀ discussing their wages or asking about others, and would automatically dismiss any arguments for pay increases citing a comparison with other counters. When traders began throwing their energies into the major downtown stores, or the wholesale pedlars’ markets that were developed in Zhejiancun (like Muxiyuan and Jingwen markets), the running of their smaller retail outlets in the older shopping districts of Qianmen and Wangfujing were taken over by their former counter staﬀ, who continued to buy their stock from Zhejiangcun or sometimes managed to convince producers to let them have goods on consignment. It was generally believed that the Anhui women, in particular, did much better sales, and that the Zhejiangcun traders who remained leasing counters in Qianmen and Wangfujing were being forced out by them. The relationship between the former bosses and their assistants was not always about competition and business. Liu Liande’s wife, from Anhui, had formerly worked as a sales assistant in his Wangfujing outlet; now the couple run a high-proﬁle beauty salon in Zhejiangcun, employing trained hairdressers from Guangdong, Shanghai and Beijing.

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The ‘ Jing-Wen’ Market collaborative project One of the most signiﬁcant milestones in the history of Zhejiangcun was the building in 1992 of Jingwen Clothing Wholesale Centre ( Jingwen Fuzhuang Pifa Zhongxin)—known in short as Jingwen Market— a collective investment project between the Fengtai district BIC in Beijing and Wenzhou BIC, which invited overt collaboration from the migrant businesspeople. Standing on Nanyuan Road,1 away from the central Dahongmen Road running through Zhejiangcun, Jingwen Market was envisaged as a government-owned pedlars’ market ( jimao shichang), earning revenue from renting out stalls to be run as independent businesses, possibly with some degree of regulation. The project was ﬁnally completed in 1994, and after a tortuous series of snags and frustrations suﬀered by all parties ﬁnally opened for business. An oﬃcial from the Fengtai district BIC who had participated in the building project before working at Jingwen Market told me the background: We lower-level oﬃcials had learnt over the years that you weren’t going to be able to get rid of Zhejiangcun. We’d been thinking for a long time: why not then just develop it into a proper clothing market? But the attitude of the higher authorities to Zhejiangcun wasn’t clear. In 1990, Chen Xitong [the mayor of Beijing later purged for corruption] had said, ‘buy from the whole country, sell to the whole country’, then more importantly there came the speech by Deng Xiaoping on his southern tour in 1992—so when we proposed the idea for the market the higher authorities gave their permission. We decided to raise the funding for the project by collective investment ( jizi ), but it wasn’t something we’d ever done before. So we went through the Wenzhou liaison oﬃce2 [in Beijing] to ask Wenzhou BIC to assist us. Starting in March 1992, the leadership from our oﬃce went to Wenzhou several times, and comrades from there visited Beijing too. By August or September we’d reached an agreement. We would call the market the ‘Jingwen’ to show that it was the result of cooperation between Beijing—‘Jing’—and Wenzhou—‘Wen’.

1 Until the construction of Jingwen Market, there were hardly any commercial activities on Nanyuan Road; immediately, of course, the project attracted new clothes stalls, Yueqing-style restaurants and a host of other Wenzhou migrant businesses. 2 Provinces and regional cities in China commonly set up liaison oﬃces in major cities, particularly in Beijing. The main functions of these oﬃces include receiving their visiting oﬃcials, collecting and sending information to both government and other institutes back home, and establishing contacts for those institutes (particularly companies).

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chapter five The building was designed to have ﬁve storeys, with 1,600 stalls in all. We raised funds by selling the rights to run a pitch for four years at 13,000 yuan each, plus an extra 500 to pay for advertising. During those four years you would pay nothing except the management fee of the BIC. We would reallocate the stalls after four years, giving priority to the original stallholders. The [Fengtai and Wenzhou] BICs set up a special team to raise the funds. The majority of the team members were comrades from the BICs of Yueqing and Yongjia [sent by their parent Wenzhou BIC]; about 20 people in all. They each had lots of friends and relatives in Zhejiangcun. But the work was a lot harder than we’d expected. Since we were collecting the funds ﬁrst before starting on the construction, the businesspeople from [Zhejiangcun] had doubts about the project. Nor were they sure about their long-term prospects in Beijing, asking: ‘Would we be ousted [from Beijing] at some point?’; ‘You’ll take our money, but exactly when will this market get built?’. Since this was the situation, we decided to get a simpler version of the market built within a couple of months—everyone who’d paid their fee could have a stall at this temporary market for the time being, then move into the Jingwen when it was ﬁnished. That temporary market was what is now Muxiyuan Light Industrial Wholesale Market.

The building and fundraising phase of the Jingwen Market project could be seen as the initial stage marking a change in the nature of interactions between the Beijing government and the migrant business hub of Zhejiangcun, with the authorities signalling a moving away from the oﬃcial stance of ousting and denial, to one of acknowledging, intervening and even collaborating with the migrants. Still, those in Zhejiangcun were wary of getting involved. However, Fengtai BIC’s overture, of inviting a stake by ﬁrst setting up the temporary market—Muxiyuan Light Industrial Wholesale Market—turned out to be a very successful ﬁrst round and even producers were drawn to rent stalls to sell their own clothes. By November 1992, Muxiyuan Market, one block away from Jingwen Market and on the main Dahongmen Road running through Zhejiangcun, was doing a roaring business. Zhejiangcun traders began queuing up to be allocated stalls in Jingwen Market. At the point when there were 5,000 interested traders approaching the BIC for the 300 stalls left to be taken up, the allocation was decided by drawing lots. Even then, many who were lucky enough turned around to sell theirs on for a tidy proﬁt, with prices in this ‘secondary market’ going up to as high as 80,000 yuan, for stalls originally costing 13,500 yuan. Some traders even bought treasury bonds (guokuquan) under their own names from

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the quota allotted to Fengtai BIC to help the bureau meet its target3 in order to get a lease on a stall. Thus began the ‘market-stall craze’ (tanweire) that swept across Zhejiangcun.

Contradictions and confrontations The market-stall craze signiﬁed that interactions between local government and Zhejiangcun businesses had entered a second round, where the traders were no longer wary and the authorities had an upper hand, a situation that continued until well after Jingwen Market was completed. It is worth noting that the Fengtai district BIC accorded so much importance to the management of Jingwen Market that a special Jingwen Market branch of the BIC ( Jingwen Shichang Gongshangsuo) was set up exclusively for this enterprise (BIC branches usually regulate the enterprises within one street area, comparable to the jurisdictions of police stations). The Fengtai district BIC oﬃcial quoted above described the state of aﬀairs when the ﬁve-storey Jingwen Market was opened for business in 1994: We still had about 190 stalls left, mostly on the ground and ﬁrst ﬂoors, very good locations. After looking into it, we decided to give the stalls on the ground ﬂoor to other work units who were important for the market like the public security bureau (PSB), the procuratorate, the court, the judiciary, the labour bureau, planning oﬃce, ﬁre department and electricity board. In the end their stalls all ended up in the hands of those Wenzhou traders too. These work units weren’t going to run them themselves, so we agreed to let the Wenzhou traders that they introduced to us run the stalls instead . . . There were another 20 stalls that were kept back for the traders who helped us by buying treasury bonds back at the start of the project. [In 1992] we’d been set a quota for the purchase of bonds of about 100,000 yuan. We couldn’t meet that ourselves, so we got the traders to help. These traders had bought 5,000 yuan worth of bonds each on behalf of the BIC. We’d promised that whoever bought bonds would get well looked after in future.

3 The People’s Bank of China issued treasury bonds as a way to channel savings into productive investments, particularly in infrastructure, and the government often gave work units, particularly government institutes, a target quota of how much they should buy. This was met basically by persuading their employees to buy more.

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The growing interactions between the Wenzhou businesspeople and the authorities, it would seem, conformed to the view that the state in contemporary China still controlled scarce resources and the society had little autonomy for independent access. In other words, that ordinary people have almost no choice but to depend on government oﬃcials and to cultivate connections with ‘gatekeepers’ to access resources (see Pieke 1995; Solinger 1992, 1993, 1995; Wank 1995). In the case illustrated by Jingwen Market, however, there was— simultaneous to this round in the initial stage of growing interactions—a third round, characterised by a series of confrontations and stand-oﬀs between the Wenzhou traders and the authorities, even before the completion of the market. The Muxiyuan Market traders’ strike The ﬁrst major episode of confrontation was the ‘strike’ by the traders at Muxiyuan Market in March 1993, sparked oﬀ by the levy of a management fee. Although there had been no clear stipulations for any such fee due at the temporary market, the stallholders’ contracts had stated that when Jingwen Market was open for business, they would be charged a 60-yuan monthly management fee. When this temporary market ﬁrst opened, no such fee was charged to stallholders, but when business picked up after a few months, a monthly 30-yuan fee was charged. This soon rose to 60 yuan, and in February 1993, suddenly leapt up to 200–400 yuan, varying with the location of the stall. The traders at the market refused to accept this, arguing that since this was just a transitional set-up, its management fee should, if anything, be lower than 60 yuan a month. By the end of February, only 100 stallholders had paid the newly increased fee and over 700 refused. On the morning of 1 March 1993, the market management sealed the main entrance and management employees stood guard at a small side door armed with electric batons, only allowing in those who had paid their fees. The traders were infuriated. Some, including Qu Xiangqi and Chen Songmu, were particularly agitated, and strode back and forth around the side door, addressing and urging their fellow traders not to go into the market to conduct business. Later, they posted notices declaring: “Resolutely resist the arbitrary imposition of fees! ( jianjue dizhi luan shoufei)”. Seeing the situation getting out of control, the management changed their minds and quickly

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opened the main entrance. The majority of the traders still refused to enter, whereupon the management appealed for traders to open their stalls and, armed with their electric batons, warned the activists to stop their agitation. Flanked by a crowd of a dozen or so colleagues for protection, Chen and Qu moved about the market, stopping any stallholder who appeared to be opening for business. Frustrated, the market management contacted the Dahongmen police station and took nine of the stallholders into custody (though they were released soon after). In the days immediately following, the stallholders continued their strike, demanding that the management drop its new fee policy. At the same time, in order to carry on with their business, the traders had pitched temporary roadside stalls outside the marketplace and along nearby Dahongmen South Road. By 7 March, the numbers trading on the roadside was causing serious traﬃc congestion at the top of Dahongmen Road. An added cause for anxiety for the local authorities was the meeting of the Eighth National People’s Congress scheduled for the following day at the Great Hall of the People in Tian’anmen Square, not far from Dahongmen Road. Fengtai BIC immediately arranged a meeting with ﬁve representatives of the stallholders through the recently opened Yueqing liaison oﬃce to Beijing. The BIC director attended the meeting in person. The meeting resulted in three main outcomes: ﬁrst, a recognition from Fengtai BIC that certain actions of Muxiyuan Market’s management, such as repeatedly raising the fees and detaining some traders, were “incorrect”; second, an undertaking to consider lowering the management fee; and third, an agreement from the traders’ representatives to get the market open again at once. With the main issues resolved, on the evening of 7 March the two strike organisers, Chen Songmu and Qu Xiangqi posted a notice by the entrance to Muxiyuan Market that declared: “Open for business tomorrow”. A few days later, Fengtai BIC appointed a new director to run the market; the monthly management fee was later reduced to around 50 yuan and there were no further repercussions from this aﬀair. The Sixth-Month Revolution The second incident, the ‘Second Revolution’ (the traders’ strike being the ﬁrst), was also jokingly referred to in Zhejiangcun as the

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‘Sixth-Month Revolution’ since it took place in the sixth month of the lunar calendar (between July and August) in 1994. The cause of this also lay in the fee system. In July 1994, Jingwen BIC branch suddenly announced that it expected all stallholders to pay a oneoﬀ ‘stall decoration fee’ of 4,000 yuan when they moved to the completed Jingwen Market. This was in contravention of the contracts that stallholders had signed when the BIC was fundraising for the market, which clearly stipulated, “no other fee of any kind will be levied” over and above the 13,500 yuan they had already paid. Several of the stallholders organised the collection of about 20,000 yuan to fund a special trip to Hangzhou, the capital city of Zhejiang province, where they hoped to get the Zhejiang provincial court to intervene in the case on their behalf. At this point, Jingwen BIC abandoned the idea of charging the fee as suddenly as they had brought it up and, once again, the traders claimed victory. The ﬁnal confrontation occurred in October 1997, when the ﬁrst four-year lease period at Jingwen Market ended and Jingwen BIC branch announced a big hike in rents. Zhang Annan, a trader in Jingwen, organised the Wenzhou traders to take the management to court, even though this time they did not seem to have a strong legal case. Zhang told me: “I’m not looking for any direct beneﬁt from this myself; if I can do this successfully, then at least my children and grandchildren will be able to say it was me who sorted out the problem at Jingwen Market”. Each stallholder put down 100 yuan to hire a lawyer, whom they asked to come and stay in the Bangkelou Hotel in Zhejiangcun and work full time. In the end, they did manage to get the rents reduced: from 60,000 to 40,000 yuan and from 28,000 to less than 10,000 yuan a year, depending on the location of the stall. As mentioned above, enthusiastic collaboration and confrontation had simultaneously infused the intense interactions between the Wenzhou traders and the local authorities. To understand these two apparently contradictory stances we must apprehend the internal fragmentation of local government positions. A trader in Jingwen Market with good connections with the Fengtai government complained to me about the problems within Fengtai BIC. After listing the various things wrong with the bureau, he went on to tell me: “I’ve got a friend in one department who tells me that Jingwen BIC branch are rotten to the core. He says X [the ﬁrst director] is famous for being on the take”. Another trader, Wan Jiayou, had once lent

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Jingwen BIC branch 200,000 yuan when they were having cash-ﬂow diﬃculties and, in return, was allocated one of the best stalls in the market. But he too intensely disliked the director in question, having heard a lot of stories about him from other oﬃcials. (And when the migrants’ concern group set up later, which Wan led, organised an anti-corruption campaign targeting this director, it even got the tacit support of some oﬃcials within Jingwen BIC.) Thus, the relationships of Zhejiangcun businesspeople to individual oﬃcials were not necessarily the same as their relationships with government departments as institutions. While they may have needed good personal connections with some oﬃcials in order to access scarce resources, they could well, at the same time, be opposed to policies implemented by the department that were, perhaps, attributed to other individual oﬃcers. Similarly, the fragmentation and even contradictions within government departments also inclined some individual oﬃcials to keep cosy relations with traders, even while these same traders opposed the policies of their departments. The fragmentation within the state system was more clearly seen in the relations between the Wenzhou and Beijing governments. For the Jingwen Market collaborative building project, Fengtai BIC contributed 1 million yuan, the Wenzhou authorities invested 1.2 million, and Zhejiangcun businesspeople raised 1.5 million. After the project was completed, however, the Fengtai authorities denied that the market was a joint construction project with the Wenzhou government, describing their southern counterparts as only having ‘assisted’. Over the ﬁrst four years of operation, Fengtai government paid the Wenzhou authorities an annual fee of around 45 million yuan, based on their initial share of the investment. At the end of the four years, it transpired, Wenzhou government was supposed to withdraw from the project entirely. One Wenzhou BIC oﬃcial involved in the initial fundraising told me: Now Fengtai has total control of the property rights and management rights to Jingwen—this really makes us angry . . . [Now] when they want us to help sort out any problems in the market, we don’t even bother going.

Diﬀerent sections within and between government in Beijing and in diﬀerent regions were no less estranged from one another than the authorities were from the traders.

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chapter five The Yueqing liaison oﬃce

I see the building of Jingwen Market as a critical watershed because it mirrored the ambivalence in the attitudes of government in Beijing that set in motion further involvements in the Zhejiangcun community. In March 1992, Fengtai district government for the ﬁrst time proposed a ‘Plan for Imposing Order’ (zhili fang’an) in Zhejiangcun. According to this plan, a special management oﬃce was set up, with a director from Fengtai district PSB and two deputy directors respectively from the district BIC and the tax oﬃce, but this proved to be ineﬀective and was disbanded in April. The three departments were instructed to work separately but with enhanced co-ordination, though according to the local oﬃcials exactly how this would be achieved was never clearly stipulated. At the same time, seeing the change in the attitudes of the authorities in Beijing, the Wenzhou authorities also looked into getting involved in the aﬀairs of the migrant community. In December 1992, Yueqing party committee arranged for 10 cadres drawn from six diﬀerent townships to go to Beijing and conduct a week-long investigation in Zhejiangcun. The team made three main recommendations: ﬁrst, for Yueqing government to set up a liaison oﬃce in Beijing; second, for the setting up of a temporary party committee amongst Yueqing party members in Beijing; and third, for the setting up of a company owned by the Yueqing government. The proposal was that these three bodies would be run by the same people and be under the direct command of the Yueqing government leadership. The main functions of the liaison oﬃce were to facilitate information exchange between Beijing and Yueqing, and to strengthen the administrative control over the Yueqing natives now residing in the capital. The role of the government company was to earn the money necessary to fund the liaison oﬃce and act as a bridge between businesses in Yueqing and Beijing. The investigation further recommended that the cadres assigned to the liaison oﬃce should have excellent personal qualities and a “strong spirit of struggle” (Yueqing Xianwei Zuzhi Bu, 1992). The Yueqing government accepted these recommendations and the Yueqing liaison oﬃce to Beijing opened its doors at the end of 1992. (It is unclear whether the temporary party committee was ever set up, but it certainly did not do much work when I was in Zhejiangcun.) The Yueqing government covered the full costs of the liai-

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son oﬃce for the ﬁrst year and part of the expenditure for the second and third years; by the fourth year the oﬃce was supposed to become fully self-ﬁnancing with the proﬁts from the company it would set up. The liaison oﬃce, however, faced a series of diﬃculties in its work from the very start. First, it was unable to establish working links within the operational set-up of the Beijing local authorities. Between 1993 and 1994, the director described his diﬃculties to me on many occasions: Since coming to Beijing, we’ve been to visit each and every one of [the diﬀerent departments of the local government]. But up till now, except for setting up the [Muxiyuan] Light Industrial Market, it’s been us going to them—they never come to us. We don’t even exist as far as they’re concerned!

The proposal to set up a Yueqing government company4 in co-ordination with Fengtai BIC was rejected, the Fengtai authorities probably fearing that this would give the traders a completely legal status and, thus, push government into a passive role in their supervision. For the local BICs, following instructions from their higher leadership was the ﬁrst and foremost task, and ‘horizontal’ collaborations with the liaison oﬃce, while helpful in managing Zhejiangcun, was not a priority. This failure to enmesh in the local government system badly aﬀected the prestige of the liaison oﬃce among the migrant community. Not long after it opened, a Zhejiangcun trader had reiterated: “What problems can this liaison oﬃce sort out? If I have problems in Beijing, I’m still going to carry on getting Beijing friends to sort them out for me”—indeed, it was more often the case that even the director of the liaison oﬃce had to turn to the migrants for help if he wanted something done! Another problem for the liaison oﬃce was that it had no institutional network through which to eﬀect its instructions. As the director complained to me: “In Yueqing, I’ve got various ‘legs’ [township government and village committees] under me. If something turns out to be diﬃcult to get done, I can give a direct order to make it

4 The idea had been to get all the traders at Muxiyuan, who would also be traders at Jingwen later on, to register as its branches; the company would provide oﬃcial documents and other requisite services for working with outside business partners and charge the individual traders ‘membership fees’. This clearly smacked of the common practice in Wenzhou in the early days of the Reform whereby private enterprises ‘wear the red hat’, pretending to be part of a collective enterprise.

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happen. But who is there for me to order about here?”. Because of this, the liaison oﬃce employed the same strategy as that of the migrant traders in its daily work—relying on the connections of friends and family. The very ﬁrst director appointed by Yueqing government gave up in frustration almost immediately after arriving in Beijing; the next two appointees, a Qingjiang native and a Hongqiao native, were willing to come to Beijing mainly because they both had many relatives and friends in Zhejiangcun and could get work underway as soon as they took oﬃce. For example, one of the daily activities of the liaison oﬃce was getting the traders to come in for a chat. When they were about to leave after such a meeting, they would be reminded: “Don’t forget to bring along any friends or relatives you have to meet us”. The second director, who had succeeded the ﬁrst at the end of 1992, was a relative of Liu Shiming, and Liu was one of the main facilitators in the early work of the oﬃce. Once, Liu Shiming and some of his partners were short of 40,000 yuan in their accounts that could not be clearly apportioned. Liu suggested they let the liaison oﬃce decide how it should be settled: “the oﬃce is the fairest judge”. It was decided they all bore some responsibility and should share the loss. After everyone agreed to this, Liu Shiming then proposed to pay up the missing 40,000 yuan himself. This tacit understanding between Liu and the liaison oﬃce showed both parties in the best possible light: Lui Shiming promoted their authority in Zhejiangcun, and at the same time, used this opportunity to highlight his own generosity. In 1995, however, a distinct breach occurred between Liu Shiming and the liaison oﬃce when the director, in his personal capacity, went in as an investing partner in Liu’s JO Compound development. As a relative, he was hoping for a ‘special understanding’ between himself and Liu, but Liu insisted that he treated all partners equally. More fundamentally, Liu felt that the director relied on him too much for money and ended up breakingoﬀ relations with the liaison oﬃce, a severe blow to their eﬀectiveness. Liu Shiming oﬀered me his decided opinion: This liaison oﬃce won’t last long. They haven’t got their own people up here. Like yesterday, there was a robbery in Gaozhuang [village]. I’d heard about it by this morning, how much was stolen and how they stole it—the whole business. By lunchtime, I knew who did it and where he is now. Could they do that? Not a chance!

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Liu’s prediction came true for the most part—thereafter, the liaison oﬃce had no real eﬀect on life in Zhejiangcun. The Zhejiangcun militia Whereas the Yueqing liaison oﬃce could not work eﬀectively due to the lack of collaboration from the Beijing side, a cross-regional government co-operation experiment, the Zhejiangcun militia (lianfangdui), jointly sponsored by the Wenzhou and Beijing governments, turned out to be disastrous. In early 1993, some Wenzhou migrants involved in a ﬁght mistakenly killed a cadre from Beijing’s Number One Reform Through Labour Camp who lived in Zhejiangcun. This sent shock waves through Fengtai PSB, which dispatched a special team to Yueqing to arrest the ﬂeeing perpetrators, and at the same time requesting that Wenzhou PSB permanently station its oﬃcers in Beijing to assist in handling any future incidents. At this time, the Wenzhou side had also recognised the worsening state of aﬀairs with respect to public order in Zhejiangcun. The same earlier report submitted by the organisation department of Yueqing county party committee (Yueqing Xianwei Zuzhi Bu, 1992: 3) had noted that, between October and December 1992, four or ﬁve homes were robbed every night and that the total value of stolen property in that period was over 1 million yuan. In light of this, Wenzhou PSB selected two oﬃcers, one from Yueqing, the other Yongjia, to go to Beijing where, as agreed with Fengtai PSB, they would organise a militia. Apart from these two Wenzhou police oﬃcers serving as leader and deputy, the militia consisted of young men recruited from Zhejiangcun itself. From an administrative point of view, Zhejiangcun was a long way from the purview of the Wenzhou authorities. The very act of sending two oﬃcers to Beijing and paying their wages whilst they were there was a break with precedent, and Wenzhou government made no further investment in this enterprise. For Fengtai government, Zhejiangcun was a community of ‘outsiders’ and not their responsibility. Though had made the request, they were not going to put either the oﬃcers or the militia on their payroll, and provided the oﬃcers with nothing but two police uniforms with the word ‘militia’ instead of ‘police’ on the sleeves. As a result, the militia had to collect money from each of the Wenzhou migrant households to keep running.

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Even worse, the Zhejiangcun militia soon found itself in friction with Dahongmen police station. The police were adamant that the militia was not a ‘proper’ organisation and should not be allowed to handle major cases or deal with any cases independently. But the militia felt that since Beijing government was not paying a cent for their upkeep, the Beijing police should stay out of the internal business of the Wenzhou community. Both parties were looking to give each other a warning-oﬀ. One afternoon in December 1993, the militia caught four gamblers in a house in Ma village, three Wenzhou migrants together with their Beijing landlord. The landlord immediately called a friend in Dahongmen police station. Just as the militia had conﬁscated their gambling paraphernalia, two police oﬃcers arrived from the station and ordered the militia to let everyone go, while one tried to grab the gambling apparatus oﬀ the militia. Unable to contain their anger, the militia grabbed the two oﬃcers, dragged them back to militia headquarters and proceeded to give them a beating. The Dahongmen station commander went over as soon as he heard the news, but could not stop them; the beating lasted for about two hours. Dahongmen police station sent urgent reports to their superiors and threatened to strike en masse if the militia were not dealt with severely. This incident shocked Beijing government and the state ministry of public security. The militia was promptly disbanded; those involved in the beatings were arrested and sentenced to prison. The seconded police oﬃcers escaped back to Wenzhou via Tianjin, and what happened to them is not known. Dahongmen police station swore never again to get involved in any such co-operation with other jurisdictions. Once more, this incident clearly pointed up the capabilities of the Zhejiangcun migrants, a community that successfully formed nationwide business networks and had the wherewithal to put down roots in Beijing, in sharp contrast to the inability of government authorities to operate around the rigid boundaries imposed on their duties, failing to either initiate or engage adequate regulating methodologies responding to the reality on the ground.

CHAPTER SIX

1994: TAKING ROOT IN BEIJING

After Jingwen Market opened for business, a stall in a good location, such as close to the main entrance on the ground ﬂoor, could be sublet at 200,000 yuan per year—or 60 times the original paid (3,250 yuan per year). Stalls had fast become a tradeable commodity and were increasingly bought or rented for their resale/subletting value rather than with any plans for trading. This craze for market stalls fuelled the craze for building more marketplaces in Zhejiangcun. Between the beginning of 1993 and the end of 1994, 16 large-scale marketplaces were completed, mostly along Dahongmen Road. At the same time, the building of residential compounds became another big business craze in Zhejiangcun. Up until the early 1990s, most of the migrant community had lived and worked in spare houses or rooms rented from Beijingers and, with the ever-increasing migrant population, rents in Zhejiangcun were rising all the time. In the central part of Zhejiangcun around Ma village, the rate was about 37 yuan per square metre in 1996, more than 12 times as high as the rents of 1985. This created a huge potential for housing developments. By November 1995, there were at least 46 residential compounds in Zhejiangcun, the vast majority developed by migrant investors and on land leased from local village committees, each accommodating between 30 and 600 households. Some 30,000 migrants, particularly the better-oﬀ, had moved to the compounds where their workshops were also housed. The real-estate business had the consequence of Zhejiangcun physically taking root in Beijing, which understandably engendered a series of changes in business relations, residential patterns and social stratiﬁcation in the community. What is special was that ﬁnancial capital did not play a big role in these big businesses; instead, guanxi in the community determined successful developments. Again, it was through manipulating of xi, rather than in redistributing material wealth, that these projects had the most signiﬁcant social implications.

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The key to success in the business of building marketplaces was to mobilise an eﬀective ‘circle of co-operation’ (hezuoquan), which generally consisted of three types of people: the managing or controlling shareholders, who would have a hand in the management and day-to-day running of the market; sleeping partners, who were not involved in any decision-making; and non-shareholding managers, who were quite often outsiders. Usually there were only three or four managing shareholders; too many, it was felt, might make joint management decisions too diﬃcult. For example, when Fu Tianlang, a gang-leader-turned-big-player, initiated the building of LQ Market and assembled a group of six joint shareholders, reaching a consensus had proved too diﬃcult and the group was reduced to four, with only two in active management. One innovative measure to eﬀect such a pruning of ‘unwanted’ managing shareholders was to transfer some of the shares to a diﬀerent property development (often a housing project) and send them oﬀ to manage that instead. The option of simply buying up another’s shares was not seen desirable or politic since major shareholders were usually friends to begin with. An important characteristic of the circles of co-operation mobilised for marketplace development in Zhejiangcun was the two-tiered share arrangement that distinguished controlling shareholders from their sleeping partners, yet linked them together, a practice known as ‘spreading shares’ (san’gu) among friends and relatives. The marketplace built by a group led by Shan Jinjia, a 26-year-old migrant who had come to Beijing in 1986 at age 18, had only three managing shareholders: Shan took charge of accounts, including fundraising; another co-ordinated relations with the wider community in Zhejiangcun, including resolving disputes with neighbouring markets; and the third was responsible for the day-to-day running of the market. But the total investment in Shan Jinjia’s market reached 2 million yuan, which Shan had raised by selling the shares in seven tranches to the three investors. Shan took four of the tranches for 1.2 million yuan, then ‘spread’ shares by inviting investments of between 20,000 and 50,000 yuan from amongst his friends and relatives. Controlling shareholders normally set a limit on the size of shares held by individual sleeping partners because anyone with large holdings would want a say in the running of the market; instead they preferred to spread out the investments among a large number of shareholders.

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The information on how shares were split or spread and with whom was not generally shared; each shareholder was responsible for their own sleeping partners, who, likewise, were not supposed to approach the other shareholders with their problems or complaints. Related to this, controlling shareholders in market-development projects necessarily had large circles of family and friends and a reputation for reliability in the community, so friends and family were happy to invest in their projects. Shareholders often employed a manager to oversee the day-to-day management of their completed marketplace, quite often former government oﬃcials from outside of Zhejiangcun. One such oﬃcial had been seconded from Wenzhou BIC to work on the construction of Jingwen Market. He had come up for retirement just as it was completed but wanted to keep on working in Beijing for a few more years and so he approached Shan Jinjia with the idea for building another market, oﬀering his experience; that was how Shan had ﬁrst started out in the market-building business in 1994. Similarly, as the director of TS Market told me, their four controlling shareholders had good reason to employ as manager a former Yueqing government oﬃcial, a certain Fang: We should have been earning over 11 million yuan a year in rents from the stalls at the market, but when we did the accounts at the end of 1995, we found we were only taking about 9 million. We didn’t normally audit our accounts on a regular basis. Any of the shareholders could come and get cash from the market funds anytime they had a need. The accountant never kept clear records of who took what when, and why they needed the money. And when it came to collecting the rent, if a shareholder ran into one of his relatives running a stall, he’d give them a couple more days before collecting the money but then forgot about it. I’d known Mr Fang for many years. We paid him 100,000 a year. He runs things very well. Now the rent we can charge for a stall is getting ever higher.

An obvious reason for hiring former government oﬃcials as managers was their familiarity in dealing with and getting around the various government departments in Beijing. The investors in Fu Tianlang’s LQ Market were very satisﬁed with their manager, a former party secretary of the Dahongmen workers’ committee and a member of the Fengtai district party committee who had served in the seventh and eighth Beijing municipality people’s congress; he kept things running smoothly for both investors and tenants “without putting on bureaucratic airs”.

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Employing an outsider as the manager could also be a way of resolving diﬀerences amongst shareholders. XS Market, completed in 1997, was originally a project initiated by a certain Xie. Halfway through, he found he had insuﬃcient money to ﬁnish the project alone, so invited a joint investment from XSJ Corporation in Wenzhou. When the building was completed, Xie wanted to repay XSJ and run the whole thing by himself but they had rejected the idea. The deadlock was ﬁnally resolved when they hired as manager a Beijinger who had formerly worked for Fengtai district PSB. They paid him a basic salary of 80,000 yuan a year, plus a bonus linked to the market’s turnover. Neither Xie nor XSJ took any part in the dayto-day running of the market. The business of guanxi Developing marketplaces1 was sometimes referred to as ‘doing the business of guanxi’ (zuo guanxi de shengyi ) because ultimately it was about ‘recruiting traders’ (zhaoshang) to take up suﬃcient numbers of stalls, using the market owners’ guanxi, and of course ingenuity. Few shareholders engaged in trading and stood to make huge losses if they did not continually come up with new ways and gimmicks in the competition to drum-up support from traders. Managing xi served as the key means. AMJ Market began recruiting traders as soon as construction work had started in early 1994. The market was divided into three zones with 240 stalls for rent; the best pitches were in zone 2, the worst in zone 3. AMJ’s three managing shareholders could have either set a single price for all the stalls regardless of location then have the tenants draw lots for the allocation when the market was ready to open for business, or set diﬀerent prices for pitches in diﬀerent zones; they eventually decided on the latter. After only half a day of recruitment, AMJ’s shareholders announced that all the pitches in zone 2

1 Although the story of Zhejiancun here focuses on the community’s clothing business, other marketplace developments included, for example, three large indoor food markets in 1995, which were managed much like the wholesale clothes marketplaces. Traders teamed up with others in their circles of kin and friend and hired refrigerated trucks to transport seafood from Tianjin, which is near the coast to the southeast of Beijing; other specialist foods were imported directly from Wenzhou. In addition, there were about six open-air food marketplaces that emerged spontaneously on empty plots of land leased from local village committees.

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were already taken, when in fact about half still remained (and hardly any in zone 3 had moved). This ploy made it look like there was a strong demand for stalls at AMJ and, sure enough, about 80 per cent of the pitches in zone 1 and 60 per cent of those in zone 3 were taken up during the rest of the day. The initial asking price for a stall in zone 2 was 50,000 yuan for three years, paid in three instalments: within two days, this had risen to 100,000 yuan (to be paid in one go!) in the secondary market as people traded on their stalls. After this open bidding for diﬀerent stalls ended, the AMJ shareholders collaborated among their own friends and relatives to resell the leases on many of the stalls. For example, the friend of one shareholder would sell on his/her lease to a relative of another shareholder for 80,000 yuan, which in turn would be sold on for 120,000 yuan, further reinforcing the impression in Zhejiangcun that AMJ pitches were selling like hot chestnuts at big proﬁts. When the shareholders felt that the demand had peaked enough, they started releasing the remaining unallocated stalls, particularly those in zone 2, through the secondary market. About 100 stalls were leased in this way. It was estimated by my informants that AMJ managed to add 30,000 yuan to the rent for each pitch, which means the shareholders had made an extra 3 million yuan from this second round of allocations. Another trick of the guanxi business was seen in early 1995 when the ﬁve controlling partners of WXY Market found themselves facing a big problem in attracting takers for the 500 or so available stalls. After three days of recruitment, only half had been allocated. Experience in Zhejiangcun suggested that if a market could not ﬁnd takers for all its pitches in one or two days, then the moment had been lost. The ﬁve shareholders decided to stop the allocation, announcing that all WXY pitches had been taken. They could not try any of the ‘reselling’ tricks that AMJ Market had used; there were too many stalls left empty and by then the craze for stalls in Zhejiangcun had passed. They decided instead to ‘contract out’ the remaining stalls amongst themselves, each taking a share of the pitches to sell on to friends and family. They set a minimum number of leases that each should sell with rewards for every stall in excess of that target; there was no decision on what would happen if someone failed to meet the target since, as the major WXY investor told me, this was a small group of shareholders and everyone was simply

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trusted to do their best. The shareholders also promised similar rewards to their friends and relatives for any leases that they managed to sell. This set up a three-tier selling chain: the shareholders, their friends and relatives and the ﬁnal holders of the leases. When I became aware of this story about one month after they had started recruiting traders, they had already succeeded in leasing out about 80 per cent of the pitches in this way. Clearly, in the cases of the AMJ and WXY shareholders, having a group of relatives and friends who could be called upon to co-operate closely when needed was crucial to success. Similar to marketplace development were two other kinds of garment trading businesses—organising regional sales fairs and demolition sales—that relied more on guanxi than on capital. Running regional sales fairs involved the organiser going to a provincial city such as Ji’nan in Shandong province or Harbin in Heilongjiang province, renting a venue and setting up stalls, putting up signage—for example, ‘Top Brand Zhejiang Clothing Factory Sales Fair’—and then advertising the event in that locality. The event organiser would then recruit Zhejiangcun traders and the fairs would run for between three to four days and up to two weeks. As Zhejiang province is well-known for its cheap light industry products, which were especially popular in cities dominated by heavy industries such as Harbin, the turnovers of fairs in such locations were usually very good and the organiser charged high rents for the stalls. Organising these sales fairs required little investment; paramount was the promoter’s ability to enlist a critical mass of traders and convince them of the prospects in a particular regional city. The other special sales business was holding demolition sales. For example, in early 1997, when part of Chongwenmen Street in south Beijing was oﬃcially earmarked for redevelopment, a number of Zhejiangcun businesspeople were able to take short-term leases on these shop spaces at very low rates and then sublet counter spaces to other traders. The prominent signage declared ‘closing down sale’, and ‘big price reductions’ due to ‘impending demolition’, made all the more genuine when customers saw that the premises were, indeed, already marked with the Chinese character for ‘demolition’ (‘chai’) by government; but in fact traders often charged normal prices or even higher in such sales. Demolition sales would last only a few days but, again, the key to pulling it oﬀ was the ability to quickly recruit traders within the time available.

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Arranging the formalities Unlike making clothes, the business of developing marketplaces involved dealing with a host of complex issues from land leasing to approvals, in particular from the departments of urban planning, transport, environment and public security. Surprisingly, these did not seem to pose diﬃculties for Zhejiangcun investors. The land used in all the marketplace developments along Dahongmen Road was held by government or public institutions that included a national-level judiciary oﬃce, a Beijing municipality grain bureau, a municipal aquatic products company, Haihuisi village guesthouse, Guoyuan village committee and Haihutun Long-Distance Bus Station among others. In China, ownership of land in cities rests with the state and public institutes are given usufruct in lands allocated for their use. In the 1980s, the adoption of the work-unit-based responsibility system for ﬁnancing (caizheng baogan) allowed, even encouraged, some government and public institutes to conduct sideline businesses as a source of ﬁnancing over and above their ﬁxed government budgets (normally less than what they needed). Thus, the institutes with land allocations in Zhejiangcun were only too happy to lease out part of their land, which was often unused anyway. Furthermore, leasing, usually for a three to four-year period, was not a permanent arrangement, so the institutions did not have to consider the matter too deeply and were ever ready to assist migrant investors to get around the red tape.2 One formal constraint in the market-building business was that the controlling investors had to be registered economic entities with proper legal status. This fostered the emergence of the ﬁrst formally registered limited liability companies in Zhejiangcun. The ﬁrst registered company run entirely by Wenzhou migrants was TPY Apparel Development Limited, set up in 1994 with the help from the Yueqing

2

It has been said that the denial of private ownership over land and the lack of a land market prevent the development of a mature private sector in China. While private ownership might beneﬁt the established private sector (in any case often comprised of government-linked enterprises), it would make little diﬀerence to livelihoods in the major part of the emergent private sector, which is comprised of the eﬀorts of marginalised businesspeople, including migrants and independent traders. Thus, the existing land policy in fact allows greater access to small players and a degree of ﬂexibility given to state-run institutes who hold the land to constitute an alternative land market.

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liaison oﬃce; Liu Shiming was chairman of the board. A point to note is that the company was registered not in Fengtai but in neighbouring Chongwen district, where a Yueqing native was an inﬂuential member of the local government; more importantly, Liu Shiming and his partners believed that registering in Chongwen while operating in Fengtai gave them more room for evasion, so to speak, and shade them from oﬃcial scrutiny. The actual formalities involved in setting-up a company were simple and a number of companies in Beijing charged between 1,000 and 5,000 yuan to handle all the necessary paperwork. The only diﬃculty, fulﬁlling the capital requirements, little concerned investors in Zhejiangcun who could club friends and family together to deposit the required amount in a bank account—to be retrieved the moment the oﬃcial checking process was over. Dealing with various government departments during the actual construction was, ironically, made less of a problem because the complex political relationships in Beijing left the Wenzhou businesspeople with greater spaces for manoeuvre—between diﬀerent levels of oﬃcialdom as well as jurisdictions (whereas in regional set-ups, demarcations would be much more straightforward). In 1993, when Fu Tianlang’s LQ Market was half built, Fengtai government stopped the project on grounds that not all the necessary approvals from the relevant government departments had been obtained. Within two months, however, it ‘had to’ rescind this decision. It turned out that Fu had some connection with a certain deputy president of the national CPPCC, who had in turn used his inﬂuence in a Beijing municipality government department, which then contacted the Fengtai authorities and stopped them from further intervention. In most cases, the institutions that held the rights to the land helped the Wenzhou investors with legalities and permissions; it was in their interests that the markets got built and operated successfully so that they could collect higher land rents. Sometimes marketplace owners turned to specialised political brokers for help with bureaucratic procedures, usually former or current government oﬃcials from Wenzhou working in Beijing who claimed to be able pull strings in the right place for a fee. These brokers did not reside in Zhejiangcun, but targeted the migrant businesspeople as clients and visited the neighbourhood from time to time. By cultivating the people immediately surrounding senior politicians, such as their drivers, secretaries and bodyguards, they could also arrange,

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say, for the politician to provide a sample of their brush calligraphy celebrating the opening of a marketplace or to attend the opening ceremony.

Expanding business circles and hot competition The advent of large wholesale marketplaces brought about notable developments in the livelihoods and national migrant networks centred on Zhejiangcun enterprises. Most importantly, these marketplaces deﬁned Zhejiangcun as not only an important site of garment production, but also an important trading and sales centre. Prices in Zhejiangcun were at least 30 per cent cheaper than in any of the other wholesale markets in Beijing and drew in large numbers of traders from all over China, particularly from the north. From within Beijing itself, as soon as Muxiyuan Market opened for business in 1992, Zhejiangcun attracted not only independent retailers, but even stallholders from the wholesale markets elsewhere in the city, such as Ganjiakou Market and Dongwuyuan Market beside Beijing Zoo. Some Beijingers who mainly sourced their goods in Zhejiangcun came to replenish their stocks every two or three days when business was good. One arrangement unique to the Zhejiangcun markets was that stallholders allowed traders from outside to exchange clothes they had been unable to sell for items that were more fashionable. A private trader from Baoding city in Hebei province told me that this was the biggest attraction for him: Usually you can change it with the person you ﬁrst bought it from. But if you’ve been doing business together for a long time and have a good relationship, they may even help you exchange the clothes that you’d bought from somewhere else. They can send the goods on. What’s gone out of fashion here could still be popular somewhere else. They’re good at adapting like this.

The construction of marketplaces at the site of production made it much easier for producers to quickly establish relationships with traders and build up their own business circles. I witnessed such transactions when I was staying with the Zhou family in Zhejiangcun in early 1993. The Zhous had just arrived from Shandong and did not have a stall of their own, nor did they have many friends in Beijing. In the mornings, I helped two of the Zhou brothers to carry

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the bundles of clothes they had made the previous night down to Muxiyuan Market. At the market, they would survey the goods on sale at the various stalls and approach one whose clothes they felt was compatible with theirs. If the stallholder agreed to take their clothes on consignment, s/he noted the style and unit price under columns in an account book and the elder of the brothers signed for the delivery and was given one of the three copies of the account note; when the clothes sold and the brothers were paid, the stallholder then destroyed one of the two copies s/he retained. The Zhou brothers visited the stalls every few days to see how the sales went, collecting monies due within one month of the initial delivery. Asking strangers to sell your goods on consignment like this would have been almost unthinkable before the marketplaces were built and new arrivals like the Zhou family would have had to spend some time building up a reasonable circle of business connections before they could contemplate selling their clothes in large volumes. The changed context was quite clear-cut—the traders had a ﬁxed stall in the market so producers need not worry about them running oﬀ without paying. The presence of large-scale trading in the immediate vicinity made the exchange of timely market information within Zhejiangcun highly eﬃcient. With better infrastructure for business relationships, connections between the producers and the traders became easier to establish and far more ﬂuid, which directly intensiﬁed competition overall in the neighbourhood. Lian Dinglu summed it up for me: Before, you’d do your thing and I’d do mine, and if you made good stuﬀ you’d have no problem selling it. It doesn’t work like that any more! Everything’s changing every couple of days. If something’s selling well, the next day, half the markets are full of it. I’ve been working in Zhejiangcun for years and I never heard of having stock you couldn’t shift in the old days. But that’s what they’re all afraid of now.

As most in Zhejiangcun remembered it, business was best between 1986 and 1992. From 1993, the number of traders who lost money increased markedly as a direct consequence of the widening clientele and the competitive urgency in catering to diﬀerent tastes. One of the most striking changes accompanying the emergence of marketplaces and frenzied sales activities in Zhejiangcun was in the daily pattern of work and life. With a competitive trading environment right at their doorsteps, producers and workshops started

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making up their clothes through the night and resting in the day, just to turn out the very latest fashions for sale ﬁrst thing the next day! Timing and sensitivity in daily production cycles had become as critical in making clothes as it was in the traditional art of making doufu for the early morning markets. Guardians Successfully managed marketplaces naturally facilitated the emergence of their owners as new big players, often enhancing their inﬂuence across diﬀerent circles. For example, some owners acted as ‘guardians’ of their stallholders’ interests, which increased their inﬂuence among their tenants’ circles. Almost all the market owners that I met viewed the situation of their stallholders, especially the big traders, as crucial for the market development business: rents could only be increased if the traders made good money. Xie Jigao, the major shareholder of Kaitong Clothing Market, located just north of the central area of Zhejiangcun, told me how he looked at yet another new market under construction right next to Kaitong: I’m not worried about the competition because I have all the big traders here—they can make over 10 million oﬀ their stalls in a year. The smaller traders all follow their lead. I do all the dealing with the BIC and tax oﬃce. In this market, you just come and see Mr Xie and I sort out whatever it is you need—you don’t have to deal with anyone else. If I ﬁnd out that the BIC, the tax oﬃce or the police are making trouble for one of my lot, I’ll make sure I get to the bottom of it. Otherwise [the traders] will be dealing with one oﬃcial today, another tomorrow, and they’d not have the heart left to run their businesses. A few months back some people from Wenzhou robbed one of my lot, who phoned me about it. I went to the police and told them they’d better catch the robbers. But they said they couldn’t. So I said: ‘If you can’t catch them, I will’. I caught them with the help of some friends in Zhejiangcun. Of course they had to give back the money they’d stolen, and I got them to pay the medical bills of the [trader] they’d hurt in the robbery too. When I could see the matter was pretty well settled, I invited them all to dinner. After all, they were hometown boys—what are you going to do? I wanted them to know that they couldn’t go misbehaving in my market in the future, and that was that. Another time there was this extortion racket. A group of gangsters from Wenzhou were asking one of my lot for 50,000 yuan. I got

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chapter six involved—I asked some friends to talk it out with them. That didn’t work, so I said, ‘Fine, then I’ll pay the 50,000’. I got some plainclothes detectives to come with me and went to hand over the money at the place they’d arranged. We caught all six of them! They were sent to the detention centre. Then police caught another four after questioning this bunch! Lots of people were sent round to ask me to have them let go, but I said no. I even got a call from an oﬃcial at the detention centre saying that people had started pulling strings as far up the line as their place, and should he let them go. I said they should get four or ﬁve years for extortion. In the end, a close friend of mine asked me to ‘eat his face’ and let them go. So I called up the oﬃcial at the detention centre and told him to drop it. He said: ‘You run the police station like your family business! It was you that wanted them sent down, and now it’s you that wants them let go’. I know all about how much the big traders out of my lot make in a year—and how they made it. They’d never leave here. I tell anyone who wants to hear it: ‘It’s not Mr Xie who’s doing big business; it’s all thanks to my lot under me’. And that’s the truth. I rely on them, they rely on me. That’s the relationship.

It was usual for market owners to take their major stallholders out for meals or a night on the town. The market management also actively provided the big traders with information and connections to help their mutual business. Through such co-operation, both groups could enhance their prestige in the community.

Residential compounds: another craze As with the craze for marketplaces, the impetus for the craze for building residential compounds came from local authorities rather than the Zhejiangcun businesspeople. In 1991, Dongluoyuan village committee cleared a piece of land that had previously been used as a rubbish tip and built 240 basic residential units to be rented out to the Wenzhou migrants in Zhejiangcun. The rent for a house was 280 yuan a month, which meant that the tiny village of Dongluoyuan made 70,000 yuan a month from this venture. This unleashed a ﬂood of village committees’ building residential properties for rent. Haihuisi village built four rows of 15 houses in 1992 and rented each house, of some ten square metres, at 270 yuan per month. In 1993, when Ma village built 36 houses on its empty land lot bordering Deng village, renting each for 350 yuan a month, they also built a surrounding wall and a gate which carried the sign: “Ma

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Village Residential Compound”—the ﬁrst formally named residential compound in Zhejiangcun. The Fengtai district authorities’ decision to build Jingwen Market in Zhejiangcun was interpreted by migrant businesspeople as a sign that government was permitting their long stay in Beijing, which also started some thinking about building their own residential compounds. The ﬁrst to invest in the property market was Wan Xianjie, a middleaged migrant who was a village cadre before he came to Beijing in 1985. He signed a six-year lease on a 2-mu plot (120 square metres) of empty land in Haihuisi in 1993, paying the village committee 10,000 yuan annually for each mu. The contract included a clause for Wan to be compensated should the state compulsorily acquire the land within the lease period; after six years, the usufruct would return to the village committee to decide how to manage the property. From then on, Zhejiangcun migrants themselves became major players in building compounds. Ma village alone leased out 200 mu (13.3 hectares) for compound development, earning over 2 million yuan a year in rents. Chen Shengjiang, a Furong native, was the biggest property developer in Zhejiangcun and had once been involved in building ﬁve compounds almost at the same time. His experience was typical of how the migrants went on to develop compounds. Chen had been swindled in a deal on leather jackets in 1992 and was over 2.2 million yuan in debt, which he hoped to clear through proﬁts from property investments. He started building his ﬁrst compound in Deng village, Number Two Compound, in March 1993, with a six-year lease on the land from the village committee for an annual rent of 45,000 yuan. Chen used to be a tenant of a Deng village cadre and was well connected with some other oﬃcials there. For this reason, he was allowed to delay payment of the ﬁrst year’s rent; instead, he could pay two years’ rent plus the interest due on the ﬁrst year’s payment. The contract stipulated that the village committee would deal with the Beijing authorities in matters such as installing electricity lines and water pipes, while Chen would cover any related costs. Chen took the committee’s word on these costs and never checked the actual bills. Chen borrowed a total of about 100,000 yuan at a monthly interest of 2.8 per cent through a go-between in Yueqing for this project, mainly to pay for materials and the construction team. In June, just as he was to start the construction work, a relative expressed an

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interest in going into partnership, oﬀering to invest 40,000 yuan and help with managing the compound when it was completed. They struck a deal based on calculating Chen’s investment of 100,000 yuan plus the interest up until June as worth 108,400 yuan in all and agreed to divide future proﬁts in proportion to their respective investments. The relative was not remunerated for his part in the management, as both partners knew full well that it had cost Chen quite a bit to get the land, and that the relative had only come in once prospects for the project were already looking well set for success, with little ﬁnancial risk. In other words, the relative would balance out Chen’s initial preparatory investment of time and energy with his contribution to the management of the completed development. There were 32 houses in Number Two Compound. When the building was ﬁnished, Chen divided the properties into three price ranges based on their location (on average 320 yuan a month) with the rents to be paid in six-monthly instalments in advance. Prospective tenants with circles of inﬂuence or having large groups of friends and relatives in Zhejiangcun were given preferential treatment and only asked to pay three months rent in advance. Though never publicly announced, this was a standard practice among compound developers, who knew that once they had got some ‘big names’ to move in, there would be no problem renting out the rest of the compound; future management of the compound would also be made much easier. I put the case to Chen: if he had only borrowed 50,000 yuan in the ﬁrst instance, saved on other expenses and rented out some properties in advance of completion at a slightly lower price, surely that would have cost him even less than the interest he had to pay on the other 50,000 he borrowed to make up his initial investment of 100,000 yuan. Chen disagreed: “If you’re over 2 million in debt like me, a few tens of thousands here or there doesn’t change the odds . . . I’d already got a bit of a bad reputation because of this [lack of ﬁnancial capacity], so people would only trust me if I got it built ﬁrst”. As soon as he ﬁnished building Number Two Compound, Chen Shengjiang set to work on building Number Three. He had yet to reap any proﬁt from his ﬁrst development at that time, but it had already won him a good reputation and laid the foundation for him to proceed on the second. Again, he had to borrow money from relatives to ﬁnance this new project, but this time incurred a charge

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of only 2 per cent monthly interest. He did all the preparation work himself; once the construction had started, he chose a businessman from Hongqiao, who had numerous relatives in Zhejiangcun, to come in as his partner. The partner invested some money and undertook to manage the compound after its completion. The partner told me with pride: When I ﬁrst came in on this deal, the building crew had already come to start work. I took one look at their plans and could see it was too low grade. I said to Shengjiang ‘My relatives here would rather pay a bit more in rent than live in a poor quality house’. The original cost to build a house was about 1,000 yuan each, with the rent set at about 400 yuan [per month]. Now that they’re costing 1,300 each, we’ll charge 600 a month rent. I went out and spread the word and all my friends and relatives are coming over. The houses are only half ﬁnished but we’ve got rental agreements on more than 50 of them already.

Chen’s third development in Deng village, Number Five Compound, was built in co-operation with a fellow Furong native who was neither a particularly close friend nor someone with a reputation in Zhejiangcun. It was, in fact, more the case that the partner hoped to beneﬁt from Chen’s reputation and connections, seeing that he had had repeated success in similar enterprises. They split the investment 50:50. In early 1995, a distant cousin, along with two of the cousin’s friends, approached Chen to join them in building a Deng village East Compound. Chen told me: “They planned to do it all themselves to begin with, but when they went to see Old Li [the village party secretary] about getting a building plot, they couldn’t swing it—or so Old Li told me later—so that’s when they thought of me”. This was the fourth compound development that Chen was involved in; subsequently, Chen and his cousin were among ﬁve partners who built South Compound in Deng village. Starting with his second Number Three Compound project, Chen Shengjiang was able to rent out all houses in each successive development prior to the building being completed and he was turning over his investments more quickly, starting the next project before the one at hand was completed. Through his property developments, Chen Shengjiang turned around his economic diﬃculties, earned the respect of his friends and relatives and had people knocking on his door wanting to go into partnership with him. Once again, one could

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describe the successful completion of his property developments as a function of his ability to mobilise connections, and in turn gain a reputation, rather than an ability to mobilise funding alone. Multiple partners, multiple investments Like all major business deals in Zhejiangcun, compound developments were very rarely the investment of a single person. Residential developments did not actually require a large investment: in the early 1990s, the cost of building the best house was around 2,000 yuan, and a development of 100 houses, which would be reckoned very large, would therefore only require an investment of 200,000 yuan, a sum easily shouldered by a single investor. The usual practice, however, was for a few partners to co-operate on a deal, and for each individual to invest in several projects at the same time. For example, Chen Cunsheng, another signiﬁcant ﬁgure in Zhejiangcun and a very shrewd businessman who had started out in Beijing as a trader, converted existing houses in one of the villages into ‘Nanyuan Compound Sub-compound’ in May 1994 with four partners. Then in March 1995, Chen Cunsheng was one of three partners in the conversion of temporary housing stock belonging to the Fengtai housing department close to Ma village into a compound. In May that same year, Chen had also signed a contract with the Beijing Water Supply Company to build Dahongmen Compound on land they held. This was done with three other investors putting in a total of 200,000 yuan. The reason that one individual invested in several projects simultaneously and that multiple partners co-operated in a relatively small investment was because developing residential compounds required a combination of all the following: ﬁrst, having connections in the local community to be able to lease the required land; second, having personal inﬂuence strong enough to keep criminal gangs out of the compounds; and third, having the ability to pull in tenants. A group of investors would more likely be able to supply a suitable combination of all the above elements and therefore co-operate to their mutual beneﬁt. A signiﬁcant corollary of this was that partners increased their inﬂuence within the community collectively. For example, 40 out of the 60 tenants in Yongjia Leather Goods Compound, for which Chen Cunsheng was a leading investor, were brought in by one of the partners, Pan Zhongqing. When he ﬁrst joined Chen’s

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group, Pan was a major ﬁgure in the Yongjia migrant community, but did not count for much in Zhejiangcun, which was mostly the preserve of migrants from Yueqing, particularly those from Hongqiao. Chen Cunsheng therefore made sure that he did all he could to increase Pan’s standing in Zhejiangcun as thanks for his bringing in tenants and, more importantly, to give Pan more clout in helping to manage the compound. Whenever Chen took cadres from the district or local township governments out to dinner, he often invited Pan to come along; if one of the Yongjia natives in the compound needed help on some matter, it only needed Pan to say the word and Chen would put his eﬀorts into sorting it out. Because of this involvement, Chen Cunsheng’s inﬂuence spread among the community of Yongjia natives; equally, I clearly sensed that Pan Zhongqing became much better known in the wider Zhejiangcun community. In some cases, compound investors had considerable sway on the development of Zhejiangcun. A major trend in the latter half of 1994 saw many migrants moving into the area around Jiujingzhuang village, some three kilometres to the south of Ma village, an area previously out of Zhejiangcun’s ambit. This spontaneous relocation occurred because a group of very inﬂuential businesspeople, including Liu Shiming, had started building large compounds there. When construction work on Liu’s JO Compound had only just begun, the common prediction was, as one Zhejiangcun informant conveyed to me: ‘The centre of Zhejiangcun is going to be further south from now on’.

Big players, gangs and ‘big men’ By the time the Wenzhou migrants began to sink roots in Beijing by investing in market and residential compound developments, so too had the less wholesome activities of the young men once summoned to even scores in disputes in Zhejiangcun. The semi-professional criminal street gangs that had quickly formed moved within an underworld network of connections that snaked across large regions of the country, particularly between the cities of Beijing, Wenzhou, Lanzhou, Xi’an, Datong, Taiyuan and Shijiazhuang. Thus, after stealing some tens of thousands in Zhejiangcun on one night, they could be in another city the following day. This transregional mobility made it very diﬃcult for the authorities to track them down. Gang members

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co-ordinated speciﬁc tasks; while some committed robberies, others hired hotel safe rooms where they could divide the loot and hide out after the crime, and yet others booked the train or plane tickets or hired a cab for their escape to the next job or hangout. In Zhejiangcun, these young gangsters were sometimes called ‘eaters of the black smoke’ (chi wuyande)—or opium addicts in the Wenzhou dialect, an activity that brought them together. In the early days, the opiates that had come in from Wenzhou communities in Xi’an or Shijiazhuang, later from Xinjiang Uygur Autonomous Region, was traﬃcked mainly by dealers from Wenzhou in places along the route. (During my brief ﬁeldwork in ‘Xinjiangcun’ in west Beijing— another major migrant population concentration mainly of Uygurs from Xinjiang—I also came across a drugs trade, though drugs in Zhejiangcun were rarely bought from there.) The threats from the street gangs was seen as the biggest problem of life in Zhejiangcun, and quite a few families left Beijing because of this. The gangs survived by creating a demand for their ‘services’. Businesspeople faced with extortions and threats turned to the big players, particularly owners of marketplaces and compounds, for protection; but big players fostered connections with some of the gangs in order to protect themselves from attacks by other gangs and as a necessary backup for their inﬂuence. For example, no marketplace owner admitted to having approached gangs voluntarily; but they all pointed out that they had been forced to approach gangs because of circumstances. In the wake of the ﬁerce rivalry between marketplaces, particularly neighbouring ones, it had become common for big players in one market to enlist gangs to cause problems for or damage the business of a competitor; in the end, all the owners of marketplaces had to maintain their own ‘defence’. Though compounds faced less competition, owners known to have the connections to protect their tenants from intimidation, mainly by relying on other gangs, were able to rent out their houses well. Even big players like Liu Shiming who had established his status ﬁrmly before the emergence of the gangs, had to tie-up with certain gangs, though he himself was never complicit in their criminal activities. One Zhejiangcun resident told me jokingly: “These young beggars [because they constantly asked Liu for money] are like nuclear weapons. Liu Shiming’s never actually going to use them, but he has to have them or there’s no basis for his standing in the world”—a world under the shadow of gangs, that is.

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The gangs’ relationships with big players broadly fell into three types. The ﬁrst, a ‘master-disciple’ relationship, as was the domain of Liu Shiming and a Hongqiao gang in particular, was modelled after that of the martial arts schools in traditional Chinese society: the young men accepted and addressed Liu Shiming as their ‘master’ (shifu), no doubt owing to his prestige, warm personality and imposing physical presence, and Liu referred to them as ‘disciples’ (tudi). ‘Rewards’ or ‘gifts’ from the ‘master’ were an important source of disposable income for the gangs. Once, when Liu had just made some money on a business deal, he gave the leader of the Hongqiao gang 5,000 yuan so that they could go out and have some fun; on another occasion that I witnessed, when a diﬀerent young gang came to ‘borrow’ 2,000 yuan from Liu, he gave them 3,000. The gangs would always ﬁrst check if the target of their actions had any connections with Liu Shiming: they too did not dare upset anyone with connections in the right places. Though no other big player could lay claim to the role of master among gangster disciples, they all tried to befriend the gangs in a similar manner, calling them ‘friend’ ( pengyou) or ‘brother’ (xiongdi ) and giving them spending money. The gangs took action on their behalf after agreeing to terms on a case-by-case basis, like the arrangement for paying a ‘special allowance’ struck up between the trader Wu Jin’an and A’bao, the hometown heavy, described earlier. In the second type of relationship, big players acted as brokers between the gangs and the authorities, particularly in getting someone out of jail by posting bail or bribing oﬃcers in the public security bureaux. A successful gang leader needed to be able to get his men out of custody if they were arrested and as Chen Cunsheng was one such big player with the best connections with local government, the gangs often paid him to get someone out. Chen would not have much contact with the gangs but just took the payment once the person in question was released. Interestingly, the ever-smiling Chen was regarded both by Zhejiangcun residents and the gangs as a slippery character who proﬁted from the misfortunes of his hometown compatriots.3

3 Regarded in similar vein, though hardly big players, were the small-time ‘ﬁxers’ like a woman from Lingdi township in east Yueqing who specialised in smoothing problems encountered with Fengtai PSB and BIC at Jingwen Market—getting a

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The third type of relationship, in which gang members were ‘followers’ of big players, mainly existed between gangsters and gangleaders-turned-big-players. Some gang leaders, when they got older, had moved into ‘normal’ business activities and eventually become big players themselves. When compound developers wanted a partner to be the ‘keeper of the peace’ in their properties, they often turned to such people. In this relationship, the big player personally directed the activities of their close ‘followers’. The former leader of the Qingjiang gang, Fu Tianlang, was a legend in Zhejiangcun. A man of few words, in his earlier incarnation he had gathered a gang of young men of his own age around him in Beijing, and at one time arranged for them all to live together in an old warehouse in Ma village, even paying for three meals a day to be delivered to their residence. Later, when he moved into developing and managing marketplaces and had any diﬃculties with anyone in the course of his business, he would get one of his (former) followers members to ‘have a word’ with the person in question. Gang-leaders-turned-big-players also used their close connections with gangs to mediate disputes in Zhejiangcun, though not to resolve problems in the fashion of established big players such as Liu Wenhua and Liu Shiming; rather, they cared little about the ‘fairness’ of the solution, settling disputes to the beneﬁt of one party and (usually) the cost of the other. In the Wenzhou dialect, this is ‘being a big man’ (‘zuo daren’). In October 1993, two debt enforcers managed to beat a debtor to death when they went to his house to demand repayment. Afraid of the consequences, they asked a suitable big player to act as a ‘big man’ on their behalf. After the ﬁrst round of negotiations it was decided that the main perpetrator of the deed would pay a one-oﬀ settlement of 70,000 yuan in compensation to the family, and that the accomplice would be liable for 50,000 yuan. The main culprit and the victim’s family agreed to this, but the accomplice was unable to pay up, so a second round of negotiations revised the decision: the victim’s family agreed to not pursue any charges against the main perpetrator once he had paid the compensation but would sue the other assailant, though making sure the

1000-yuan ﬁne reduced to 500, for example, for which she charged 250 yuan. These small ﬁxers were accorded far less respect than Chen Cunsheng, though their services were certainly called upon.

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circumstances of the death were described in less-damning terms in order to protect him from too severe a punishment. All three parties agreed; the accomplice received a seven-year sentence from the court. This settlement was not deemed as fair: there was no way to compare a compensation of 70,000 yuan to seven years in jail. As the case was understood in Zhejiangcun, in order to protect the interests of the main culprit, the ‘big man’ had pressurised the other two other parties into agreement. ‘Big men’ had a special niche in the Zhejiangcun because they were the bridge between the gangs and the migrant community. Most businesspeople did not risk a tie-up with any gang, partly because the costs were too high and partly because the gangs could turn hostile at any time. But those who were ambitious could not aﬀord to entirely ignore the gangs. The strategy adopted by most major businesspeople was to co-operate with the big men, the gangleaders-turned-big-players, as could be easily discerned from their inclusion in the circles of co-operation mobilised for most marketplace and residential compound developments.

CHAPTER SEVEN

1995: CAPITULATIONS AND COMEBACKS

When the Fengtai district government had decided to capitalise on the growth of Zhejiangcun’s national business networks and initiated the Jingwen Market collaborative project, they could not have expected that this would lead to migrant investments taking root in Beijing, and less so to the intense interactions with the migrant businesspeople that followed. Even then, the willingness for collaboration was motivated by ﬁnancial gain and was not pursued as part of any comprehensive policy of accommodation, which left the worsening state of disorder in Zhejiangcun in a void of social regulation. In this context, some groups in Zhejiangcun decided to take the ﬁrst steps in experimenting with measures for self-regulation and maintaining good public order, most notably by starting up the ﬁrst popular (non-governmental) organisation in Zhejiangcun and one of the very earliest of its kind to be set up by migrants in China, and by the adoption of a community management system in Liu Shiming’s JO Compound (both of which invited the assistance of a Beijing University students’ group). These attempts at self-regulation, though welcomed by grassrootslevel government oﬃcials for obvious practical reasons, were not appreciated by those much higher up. Instead, in November 1995, government reverted to launching a clean-up campaign of unprecedented scale, an all-out crackdown to get rid of the ‘problem’ of Zhejiangcun by demolishing all the residential compounds. But, within three months, the migrant business community and their residential compounds made a comeback and the precinct became as overcrowded and lively as before. After all these developments, the relationship between Zhejiangcun and the state stood in ‘dynamic stalemate’, with neither side accepting the initiatives of the other and each having the upper hand at diﬀerent times, but with both sides still trying to come up with new solutions without really meeting the concerns of the other. The ongoing case represented by the story of Zhejiangcun today is part of one of the most compelling issues in contemporary China, namely state-society relations.

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Jingwen Market concern group On 21 December 1994, I got a call from Wan Jiayou, a trader in Jingwen Market, to say that he was coming to see me. Wan, then in his thirties, had come to Beijing in 1986 after quitting his job in a rural factory in Hongqiao, and was well-known in Zhejiangcun for his ‘ﬁghting spirit’ in two incidents. In 1987, he successfully won a 700-yuan compensation after he got a Beijing truck driver who beat him detained at the local police station. In another incident, in 1989, he was brave enough to argue with a powerful Beijing family living near to the house he rented, but was beaten up so badly that he was unconscious for about forty days. That time too, with help from relatives in Wenzhou, particularly an uncle who was a retired solider and had connections in Beijing through his former army friends, he was given 17,500 yuan in compensation. It was very rare for migrants to stand their ground against Beijingers, let alone be awarded compensation. Wan had started out as a producer, but turned to trading after the head injuries he sustained in 1989; his very capable wife (a sister of the big player Chen Cunsheng) looked after their stall at Jingwen Market while he involved himself in ‘social work’: roaming around Zhejiangcun and talking to people. Wan arrived at my dormitory in Beijing University (BU) with Qu Xiangqi (a main organiser of the 1993 traders’ strike at Muxiyuan Market); they removed their shoes, sat cross-legged on the bed, then Wan stated their purpose: “We’ve seen your Beijing Daxue Aixin She [Beijing University concern association] on TV lots of times. We want to start one too”. This was a real surprise to me. The BU association he referred to, set up by students concerned about the increasing apathy and lack of caring in Chinese society, had recently gained approval from the ministry of information and therefore featured prominently in the news for a time. But its mission, to encourage civic concerns and a spirit of helping and charity among young students, hardly related to the preoccupations of migrant businesspeople. Wan explained: In Zhejiangcun, the people doing good works daren’t speak up at the moment, but the bad sorts and opium smokers are very full of themselves. Right now, there’re all sorts of extortion, ﬁghting and arguing every day in Jingwen Market. If this mess carries on, who’s going to go there to buy clothes? . . . There’re a lot of other wholesale markets setting up now, and the competition’s pretty ﬁerce. We want use our association’s activity to make the atmosphere around the market a bit

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When I inquired how exactly they planned to achieve this, the pair was somewhat at a loss: “We don’t know how we should go about it. We were wondering if we could be a branch of Beijing Daxue Aixin She. We’re going to look like foolish foreigners [chu yangxiang] if we try to do it on our own”. I reported their request to the university. The positive and aﬃrmative responses from the university authorities and the student association far exceeded my expectations: they would get involved to help the migrants set up their association. On 27 December, some student representatives and I went to Zhejiangcun to meet Wan and Qu and, together, we visited senior ﬁgures at the Jingwen Market branch of the Fengtai district BIC and the Yueqing liaison oﬃce to broach the idea; both approved in principle. The Jingwen Market BIC branch leaders suggested the organisation should be a ‘group’ (xiaozu)— rather than ‘association’ (she) which was more formal and connoted more autonomy—and Wan and Qu agreed without reservation. On the morning of 28 December, after further talks with the same oﬃcials we visited the day before, a clear agreement was reached: Jingwen Market ‘group’ would be a ‘self-organised popular organisation’1 (qunzhong ziwo zuzhi ) under the direct supervision and guidance of the Jingwen Market BIC branch. My suggestion that the party secretary of the Jingwen BIC be invited to be the honorary president met with unanimous approval. On the afternoon of 28 December 1994, Jingwen Shichang Aixin Xiaozu ( Jingwen Market ‘concern’ group) held its inaugural meeting at the oﬃce of the Jingwen BIC party secretary. Eight people

1

Non-proﬁt organisations in China roughly fall into three categories: political parties; ‘mass organisations’ controlled by the government such as trade unions, youth leagues and woman’s federations; and non-proﬁt ‘self-organised popular organisations’ such as sports associations and clubs. If a popular organisation involved more than one work unit, it needed to be approved and registered with the bureau of civil aﬀairs (minzheng ju), but, if conﬁned to a particular work unit (in this case, the Jingwen Market branch of the Fengtai BIC), the approval from the work unit leadership was suﬃcient. Hence the Zhejiangcun migrants’ association included ‘Jingwen Market’ in its name to simplify the procedures for its setting up.

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attended. The meeting resolved to make “the pursuit of stability” and “the improvement of the image of the market” as the concern group’s aims. The meeting also decided that the group would provide free drinking water for all customers and traders at the market and that members would oﬀer special discounts to four categories of customers, namely service personnel, people with disabilities, students and the elderly. Together with the setting-up of the concern group, at Wan Jiayou’s invitation I had organised a BU Zhejiangcun Shehui Gongzuo Xiaozu (Zhejiangcun social work team), and once a fortnight, the team’s initial ﬁve members (all students) went down to Zhejiangcun to help the group to draw up their work plans and produce their written materials. In March 1995, with the help of the BU team, the group, whose membership had grown to 32, set up a standing committee to oversee day-to-day activities. Wan Jiayou also decided that all who attended the inaugural meeting would be committee members; he became the head, with Qu Xiangqi and another active Jingwen trader as the deputies. Appeasement and winning friends On 4 March 1995, Qu Xiangqi chaired a meeting of the full membership of the concern group in Jingwen Market canteen, at which invited senior staﬀ of Jingwen BIC branch were present. In their opening remarks, the Jingwen BIC leaders expressed their support for the creation of the group, but they emphasised: “the group should make serving the customers of the market its main task, and should not get involved in administrative issues”. (At this point I heard a Wenzhou trader comment under his breath: “That’s right, now isn’t the time to get into a struggle with the [BIC] branch”.) The main item on the agenda was actually to borrow the shortfall of 16,000 yuan for the installation of air-conditioning in the market, which Jingwen BIC had been planning for a while. Prior to the meeting, the director had already discussed this with Wan Jiayou, and when Wan mentioned this, most people immediately expressed their willingness to help. On behalf of the concern group, Wan pronounced: “The eight committee members can put up 5,000 or 10,000 each. Everyone else can contribute as much as they can—the more the better”. On seeing the enthusiastic response of their migrant tenants, the Jingwen BIC oﬃcials looked quite moved.

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As a necessary precondition for its continued existence and growth, at this stage, the concern group pledged itself to a tactic of appeasement and conciliation in all dealings with the authorities. In other words, to put aside any potential conﬂicts or disagreements with government, and to work at establishing a concord in relations with the state and so win a wider circle of friends. Apart from supporting the Jingwen BIC’s work, the tactic of appeasement and winning friends embraced a range of activities within the vicinity of the market. Over 1,000 leaﬂets were distributed to traders in the market which urged them to abide by the laws and state regulations, and to undertake businesses honestly and in a civilised manner, a message that boiled down to ‘self discipline’ (zilü), a key tenet of private business associations in China. Since social and charitable works, or ‘doing good deeds’ (zuohaoshi ) as Zhejiangcun migrants termed it, were are not perceived as ‘political’ but laudable by all alike, including the authorities, the group took these works as its key activities. Thus, an information board was set up in the market and volunteers were frequently mobilised to sweep the street fronting the premises and paint the toilets; twice, donations were collected to fund disaster relief work in other parts of the country. Meanwhile, the BU team had printed name cards for the group and accompanied Wan Jiayou to call on all the village and residents’ committees in the areas near the market, ostensibly to explain the concern group’s mission and invite their suggestions and ‘guidance’ for the its future activities. The real signiﬁcance of these courtesy calls was for the members to gain experience and learn the ropes in making formal representations and conducting exchanges with various government organisations for the work ahead—what Wan Jiayou humorously referred to as “learning how to talk”. Getting media coverage was also part of establishing a desirable proﬁle. With some co-ordination by the BU team, a number of state-run media outlets, including some major agencies such as the People’s Central Radio and Guangming Daily, ran reports on the group. As the media in China is seen as the mouthpiece of government, getting into the newspapers gave the concern group a semblance of clout, if not some cache. However, Wan Jiayou and I had a big diﬀerence of opinion over BU’s role in publicity promotions, with me insisting that BU could only assist in technical issues such as working out a detailed programme for a speciﬁc activity and writing up documents, but Wan

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wishing us to be their ‘kaoshan’ (mountain to lean on), to take the role of patron. Wan constantly exhorted us to get in some ‘celebrities’ to be the group’s consultants, oﬀer written dedicatory inscriptions of encouragement, or at the very least drop by for a visit, and kept complaining that I did not understand their predicament: “It doesn’t matter how well we do. If the authorities decide to close us down, they can do it any time they like. You’ve not even got the right to speak out for yourselves. How can we make this work without a kaoshan?”. ‘Playing chess’ Despite being anxious to keep on good terms with the authorities, Wan Jiayu had right from the very start envisioned the setting-up of a ‘Zhejiangcun’ concern group as a way of making the migrants’ own voices and concerns heard and of negotiating more favourable terms of exchange and leverage with government authorities. As I understood it at least, it was a way to gain acceptance not by aiming to conform to or appease the purposes of the state but by ‘playing chess’ (duiyi ). Wan and others were not at all happy with the then director of the Jingwen BIC branch. Rumour had it that he had sold the rights to empty stall pitches in Jingwen Market to a trader called Jin at discounted prices reserved for BIC insiders and, further, that the two of them had made a proﬁt of at least 6,000 yuan apiece when this Jin then sold these rights on to other Zhejiangcun traders. After the establishment of the concern group, Qu Xiangqi made a number of remarks in public about the conduct of the director, which resulted in certain individuals dragging him up to the balcony above the market and threatening him. Fortunately, personal diﬀerences between the Jingwen BIC director and its party secretary created space for the group to continue ‘playing chess’. Wan and Qu collected the evidence against the director that they planned to reveal to higher authorities, in particular by presenting a collective petition for his removal to Fengtai district BIC. When the director was reassigned in early 1995, Wan Jiayou felt that the group could claim partial credit. Soon, however, the Jingwen concern group found it diﬃcult to take a stand beyond the safe boundaries of ‘evading the authorities’, a tactic that had stood the test of time for the migrants of Zhejiangcun.

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The ﬁnal threshold in the group’s evolution was breached with its failure to represent the interests of a trader who was abused by the police. On 11 April 1995, a disagreement arose between Lu Jiandong, a trader at Jingwen Market, and his neighbouring stallholder, a trader who was well-connected with the market security guards (who were under Dahongmen police station). A guard had dragged Lu Jiandong to their oﬃce and beat him up, causing serious injury; moreover, the guards shut down his stall. In the end, the only way the Lu family could get permission to reopen their stall was by payment of a bribe of 1,000 yuan to the guards through an intermediary. Lu’s father later made a verbal complaint at the police station but received no response. Wan Jiayou decided that the group should get involved in this aﬀair but had little idea of how to proceed. The BU team helped to collect evidence, drafted ‘accounts of the event’ and ‘counter arguments’ on behalf of Lu Jiandong, and collected signatures of witnesses. On behalf of the concern group, we also drafted a formal report—‘Suggestions for improving the professional conduct of the security team at Jingwen Market and for working together to create a civilised marketplace’ (see Xiang 2000: 543–546, Appendix 6)—to be submitted to Dahongmen police station and Fengtai district PSB. The report also requested that the group’s representatives accompany the injured trader in discussions with the higher authorities. It was at this critical point that several senior members of the group started backtracking. After rereading our report a number of times, Wan ﬁnally said to me: I’ve thought it over several times but I still feel it’s not right. If you take on the police, how do you expect to win? The more you ‘hold talks’ [duihua] with them, the less happy with you they’re going to be, and in the end the consequences are going to land on me! People here only know how to save their own skins; nobody’s going to share the burden of responsibility with you in something like this.

So that put an end to all the team’s hard work and, afterwards, for a number of reasons, the Jingwen concern group became much more subdued. In theory, ‘playing chess’ as a team should have encouraged much greater internal unity in a civil society group than ‘appeasement’ (or ‘evasion’), but not in this case. Everybody was very enthusiastic during the initial period of conciliation and winning friends, ﬁred by the ambition that they would be able to negotiate with the authorities one day. But when the opportunity to actually

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engage in a dialogue presented itself, the key organisers’ fear of being held responsible for any consequences of their actions had undermined any nascent solidarity (or perhaps reﬂected its lack) the Zhejiangcun migrants’ group might have had.

Liu Shiming’s JO Compound development Concurrent to the involvement with Zhejiangcun’s concern group, the BU team also spearheaded and piloted a self-regulation programme for the residential areas in JO Compound, Liu Shiming’s newly completed housing development. JO Compound was built on land under the jurisdiction of Jiujingzhuang village in Nanyuan township. In 1992, the village committee had leased the plot to Wang Shaofeng, a local peasant, for 180,000 yuan a year, in addition to which he also had to shoulder the wages for the 35 peasant ‘employees’.2 Wang had tried ﬁsh-farming, then raising rabbits, making only average returns. When he saw money being made from building housing compounds in the nearby Ma village in particular, he decided to do this as well. At this time, a cousin of Liu Shiming approached Wang for the land and they agreed on a deal. Liu assembled 25 shareholders and signed a contract with Wang under the name of his ‘TPY Apparel Development Limited’. Liu was responsible for raising the investment funds and for construction and management, while Wang took care of all matters that required direct contact with Beijing authorities. Wang was paid 300,000 yuan for use of the plot in the ﬁrst year, 350,000 for the second, 400,000 for each subsequent year, and on top of this got 30 per cent of proﬁts from rentals each year. Liu Shiming had always had a keen interest in urban planning. While he lived in Ma village in earlier years, he kept telling me how he would convert a lane in Ma village, the central part of Zhejiangcun,

2 Although Nanyuan township was classiﬁed as ‘rural’ and the residents there as ‘peasants’, only a very small part of the land was used for farming and most residents were not engaged in agricultural activities. This is common in areas near cities, where the townships and villages were supposed to develop TVEs to employ the resident ‘peasants’. Because typical TVEs were collective, often poorly run enterprises, many villages leased out the factories, or the rural lands that could be used to develop TVEs, to individuals, on condition that a certain number of local villagers were employed.

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into a pedestrian-only commercial street if only he had the power. It was also his dream to build a ‘model compound’ in Beijing. It is not surprising then that his JO Compound turned out to be the largest and best-quality residential development in Zhejiangcun, covering four hectares and accommodating 3,000 people. The total investment was about 8 million yuan. The public toilets alone cost over 200,000 yuan, which was quite unusual, since few compounds invested in public facilities at all. JO Compound was divided into six zones, some housing leather-jacket producers, others fashion wear, and so on, with the compound administrative oﬃces in the central zone. The internal road running up to the main gate was named ‘Commercial Street’, along which a post oﬃce, grain shops, convenience stores and hairdressers jostled for space. The BU team took part in three areas of the internal running of JO, joining in the management committee’s discussions and making amendments to their written reports and ﬁles. The ﬁrst area of involvement was setting up a structure for self-management. Thus, a management committee formed by the 25 shareholders was subdivided into seven smaller committees, each responsible for fee-collection and ﬁnances, mediation and security, hygiene and so forth. The seventeen bigger investors forming the standing committee took it in turns to be on security duty at night. The second area of involvement was service provision. In 1995, JO approached a local primary school and secured an allocation of 120 places for the children of residents. They also opened a kindergarten with places for 70 infants just across the compound in September and managed to obtain a full set of textbooks and even ‘acquire’ six nannies, mainly by oﬀering them higher wages, from Fengtai children’s palace (shaoniangong) and other state-run kindergartens in the area. Transport for the residents was arranged with the purchase of four minibuses to ply along a direct route between the compound and Jingwen Market, with a bus running every 15 minutes between 6:00 am and 7:00 pm. A third area of attention was getting the public notice-board up. This carried three types of postings: national policy outlines, for example on family planning; oﬃcial notices from the management such as the ‘rules for residents’ (zhuhu shouze); and records of decisions made by the management committee such as clarifying ticket prices on the bus services (which some residents complained were too high, but the management had claimed was subsidised to the tune of 10,000 yuan just to cover costs). On this last issue, a notice

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subsequently solicited suggestions from residents on ways to improve the bus service and included an open invitation to approach the management oﬃce to discuss any suitable schemes or ideas. When consultations led to the discovery that many people were not paying for their tickets, the JO committee decided to suspend the subsidies and contracted out the buses to the individual drivers. Turning to government After building his JO Compound, Liu Shiming showed a marked willingness to have dealings with the local authorities. More than once he had said to me: It’s hard to do it properly if you don’t work with government . . . I like it when the police station puts pressure on me! For example, if they tell me that everyone caught smoking opium should be ﬁned 10,000 yuan, well then that leaves some room for me to work in. I can ‘eat your face’ and [ask the police to] only ﬁne you 8,000. But now I can’t do anything. Now getting arrested isn’t like getting arrested at all [with those arrested released soon after without any punishment]. If the police station takes such an attitude, how can I be too hard on those from my hometown?

Liu Shiming gradually withdrew from the world of the gangs as well and passed the work of the compound ‘mediation committee’ over to Xu Longshui, another shareholder. This was mainly about dealing with gang incursions into the compound and protecting the residents from harassment. The leader of Hongqiao gang, Liu’s former ‘disciples’, also went over to Xu Longshui and, together, they opened up a pool hall in the compound. Because many of the customers were gang members, there were frequent scenes of arguing and ﬁstﬁghts. But when Wan Jiayou, also a JO Compound resident, had asked Xu Longshui to close the hall down, the reply was: “If I don’t run this pool hall how am I going to keep this gang going? With no gang, who’d pay any attention to what your ‘mediation committee’ thought?”. Wan took this up with Liu Shiming. Liu’s response was ambiguous; he told Xu to ensure there would not be any more ﬁghting in the pool hall, but passed no comment on the Hongqiao gang. About this time Dahongmen police station had also changed its thinking and begun regularly summoning the big players in Zhejiangcun for meetings to learn about the situation on the ground. Liu Shiming was their most important contact. One suggestion he had oﬀered

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was that each time the police arrested a criminal they should post notices giving details of how they had handled the case in all the Zhejiangcun markets and compounds. The police took this up immediately. It was commonly assumed that many criminals were released shortly after being arrested in Zhejiangcun because Dahongmen station was corrupt. The real problem lay elsewhere; the police normally handed over those arrested to Fengtai district PSB for further investigation, so it was the bureau that had been letting them oﬀ. Liu Shiming’s ‘helpful’ suggestion was based on his intimate knowledge of police work procedures; by publicising the details of how they handled their cases, Dahongmen police station could show that they had in fact fulﬁlled their duty. Liu Shiming’s relationship with Dahongmen station was close indeed. During the Mid-Autumn Festival in 1994 and Spring Festival of 1995, Liu had sent boxes of cigarettes and fruits to the police on duty at the station as ‘weiwen’.3

Cold winds in Beijing Unlike the marketplace developments in Zhejiangcun, none of the migrants’ residential compounds had the approval of the urban planning authorities. In the land leases signed with village committees all these compounds, including Liu Shiming’s, were categorised as ‘temporary constructions’, which rendered their status highly vulnerable from the beginning. The appearance of these ﬁxed assets taking root in Zhejiangcun had not only caused increasing anxiety in local government departments, particularly the PSB, but, compounded by other incidents, had already spurred government plans for a ‘clean-up’ during all the while that Liu Shiming was busy building JO Compound. In late 1994, thirty-eight villagers from Jiujingzhuang had petitioned the authorities, stating that part of their arable land, just opposite JO Compound, had been taken over to build a residential compound. They ﬁrst took their complaint to the district government, to no avail. Next, they tried the district people’s congress, which forwarded the report to the planning department and requested 3 This term usually refers to the formal greetings, usually accompanied by gifts, paid by oﬃcials or citizens’ groups to heroes, ‘labour models’, or people in disaster areas.

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an inquiry. The department found that both the compound in question and the neighbouring JW Compound had encroached the ‘red line’ that marked the outermost boundary of the belt zoned for urban development. The owner of JW Compound, Zhou Qingchao, immediately got the Jiujingzhuang village committee to get to work on their behalf. Parts of both compounds were demolished, and a ﬁne of 60 yuan for every square metre was levied on what was left standing. The ﬁne for JW Compound came to 39,000 yuan. Zhou Qingchao was quite pleased with this, seeing the ﬁne as a nod to the compound’s legitimacy, and showed me the receipt when I visited, cheerfully declaring: “Now they’ve ﬁned me, that’ll be an end to it!”. But it was to be only the ﬁrst wave of the brewing storm and far from the end; the second was soon to follow. In April 1995, it seems, the deputy mayor of Beijing responsible for infrastructure development, Zhang Baifa, happened to spot two big housing compounds below the Dahongmen railway bridge and sent some oﬃcials to investigate. Consequently, Fengtai government found that neither development had all the required approvals and decided that they should be demolished. On hearing this, besides contacting the village committees to protect themselves, the owners of both compounds threatened a protest demonstration because only their buildings and not any of the other compounds would be demolished. This caused much consternation among the other compounds, fearing the protest would call attention to them. Liu Shiming took two steps to protect his investment. First, he got Jiujingzhuang village committee to write to Nanyuan township and the district government asking for JO Compound to be left untouched. In the letter, therefore, the village committee confessed to their error in not complying with all the required procedures before starting the construction and expressed their determination to complete the formalities. Second, Liu Shinming asked Fu Tianlang to write to the deputy president of the CPPCC, with whom he had connections, stating that JO Compound was the main garment production site for Fu’s LQ Market. Liu Shiming did this knowing that marketplace developments in general had explicit support from government, and that LQ Market in particular had the backing of that inﬂuential deputy president; linking JO Compound to LQ Market would, therefore, make it more legitimate. At the same time, the Yueqing liaison oﬃce sent a report to Fengtai district government calling on them to allow most compounds to exist temporarily.

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By May 1995, seeing that the two compounds spotted by the deputy major were only partially demolished and that the storm seemed to have been averted, Liu Shiming completed building the JO Compound. In the same month, a senior Yueqing government leader came to Beijing and held talks with the compound owners on “improving internal management”. In Zhejiangcun this was taken to mean that, from Yueqing government’s perspective at least, there was little worry about the legitimacy of their compounds. In June, almost all the new homes in JO Compound were occupied. “There’s no such thing as Zhejiangcun” Meanwhile, the issue of managing the ‘ﬂoating population’ once again attracted serious concern among senior leaders at the state council. In June 1995, the Beijing municipal government convened a working forum attended by all the senior ﬁgures in the city government; eleven new laws and regulations for controlling the city’s ﬂoating population were promulgated, including the target set to limit them to below 3 million. Held as it was just prior to a national working meeting on the issue scheduled for July in Xiamen, Fujian province, the Beijing forum heralded the city government’s determination to take the national lead in this matter. The saying that gained currency in Beijing government circles went: “Beijing’s key district for migration administration is Fengtai, and the key area in Fengtai is Dahongmen”. Zhejiangcun now found itself the centre of a prominent nationwide campaign. On 1 July 1995, Fengtai district government sent a team of over 500 staﬀ drawn from eight departments, including the PSB, BIC and labour bureau, to stay in the midst of the ‘rooted’ ‘ﬂoating population’ in Dahongmen and carry out a weeklong investigation. The conclusions drawn in their subsequent report took a very negative view of Zhejiangcun, highlighting problems of overcrowding, unhygienic conditions, having children without government permission (in violation of the law of family planning) and unlicensed businesses. But the biggest problem, stressed in that report, was ‘illegal constructions’, the residential compounds being built by the migrants. It should, of course, be borne in mind that the investigation was by oﬃcials drawn from a number of departments which, compared to local government such as village and street committees or township administrations, beneﬁted much less from the existence

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of Zhejiangcun, such as the labour or public security bureaux, for instance, who regarded the migrants as a constant source of extra work and trouble. Furthermore, even the interests of departments that did beneﬁt from the migrants’ businesses were better served by complying with the law, in contrast to the local government level where the preference was for informal co-operation. Fengtai BIC, for example, despite, or because of, its deep involvement in the Jingwen Market project in Zhejiangcun, was a strong advocate of ‘rectiﬁcation’. In 1994, Dahongmen street committee had encouraged migrant traders to set up morning market stalls, for which they charged fees, on the main street. Fengtai BIC continually complained that this was in violation of trading regulations and “a serious threat to the proper order of [ Jingwen] market”. The BIC knew that there was no possibility of Jingwen Market being closed down for good, even if the Wenzhou migrants were expelled from Zhejiangcun. Indeed, from late 1995, when the political climate chilled towards Zhejiangcun, all the senior oﬃcials of Fengtai BIC who talked to me distanced themselves from the migrants and, despite almost all the traders at the market being migrants from Wenzhou, emphasised that Jingwen Market had nothing to do with them. One oﬃcial even argued: “There is no such a thing as Zhejiangcun”! Thus, while on the one hand co-operating with the migrant businesspeople in Zhejiangcun on practical matters, it was not a contradiction that the Fengtai government investigation team submitted such a damning report to their superiors. Moreover, the report was in keeping with the typical practice of government investigation teams in China to fathom what the higher authorities were after, or which way the wind was blowing and draft their report to ﬁt. At the time of the investigation, the general atmosphere in the city government was extremely tense. Just before the investigation, a former deputy major of Beijing committed suicide when the central government started investigating his involvement in a series of irregularities in companies related to him. Shortly after that, the Beijing party leader, also a member of the all-powerful politburo, Chen Xitong, was sacked. In short, tightening-up and cracking-down to eliminate any more trouble was the stance of Beijing government towards most issues, spontaneous migrants in particular. Set in context, any report that failed to warn against possible problems brought about by the persistence of such a large concentration of migrants would, at the very least, suggest that the investigators lacked political sensitivity.

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Beijing sent the Fengtai report to the Zhejiang provincial government via the Zhejiang liaison oﬃce in the capital. The reaction in Zhejiang, given the view that matters relating to Zhejiangcun in Beijing would aﬀect the province’s national image, was that such negative ﬁndings by Beijing city government meant that the situation had to be watched very closely. This was communicated to the Wenzhou city authorities, which sent it on to Yueqing and held two meetings with top oﬃcials there speciﬁcally to discuss the situation. The document from Beijing contained no speciﬁc measures to be taken, nor any suggestions as to what Zhejiang government should do; neither did the governments of Zhejiang or Wenzhou return any clear response to the report. My overall impression was that the two sides were mainly engaged in debating the nature of Zhejiangcun, ‘good’ or ‘bad’, rather than concrete measures to improve the environment or public order in Zhejiangcun. Possibly as an outcome of consultations between diﬀerent levels of government in Zhejiang, the provincial government had their liaison oﬃce in Beijing compile a complement to the Beijing report. The Zhejiang report diﬀered dramatically, emphasising the important economic contributions made by Zhejiangcun, and suggesting that what was really needed was a crackdown on crime and a strengthening of self-management. Top oﬃcials in Zhejiang commended this report as “credible” (shishiquishi) and “the solutions proposed were practicable” ( jianyi kexing). This ﬂurry of oﬃcial meetings and reports had not much concerned the Wenzhou community in Zhejiangcun as few people knew about them. And even those who had been aware of these oﬃcial exchanges—such as Liu Shiming and Fu Tianlang, who were consulted when the Zhejiang liaison oﬃce was drafting their report—felt that all these proposals would dissipate as time dragged on, with little eﬀect on Zhejiangcun.

October 1995: an unexpected thunderclap Liu Shiming and Fu Tianlang would have been correct in thinking that the debates between Beijing and Zhejiang might have gone nowhere had it not been for an internal report (neican) on Zhejiangcun, written up in September by a journalist from China Youth Daily, claiming that law and order there had deteriorated to a “frightening”

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state and that the situation was “out of control”.4 This came to the attention of then Premier Li Peng, who thundered a memo that “this loss of control could not be allowed to continue”. His words did not just make Beijing government determined to go ahead with the ‘big clean-up’ (daqingli) of Zhejiangcun—it elevated the status of their task to that of a major undertaking “in accordance with the instructions of the party centre and the state council”, as later described in the state media. The big clean-up became the top priority of the Beijing party committee and government, and proposals for its implementation involved sixteen diﬀerent government departments. The Beijing authorities designed a crackdown to be escalated in three operational stages: ﬁrst, mobilising propaganda and investigating the situation on the ground; second, encouraging people to move out and voluntarily demolish their illegal properties; and in the last stage, an enforced demolition bringing a “ﬁnal end to the matter”. One stated aim was to achieve an equal ration of migrants to locals in the Zhejiangcun area, though no oﬃcial whom I talked to could explain or knew why this ratio had been set. What this meant, in eﬀect, was that about 70 per cent of the Zhejiangcun migrant population had to be deported. It was because of this goal, and the assumption that the migrants would have to leave once deprived of their accommodation, that Beijing government put the demolishing of migrant compounds as their ﬁrst priority. On 25 October 1995, police oﬃcers from Dahongmen station visited compounds in Ma and Haihuisi and gave residents a verbal warning that their homes were to be demolished. As some began moving out, the compound owners, however, remained unanimous in their reassurances: “There is no possibility that the compounds

4 Journalists in China have two roles: reporting for their employers and writing internal reference reports for government, usually on sensitive issues they come across in the course of their work. This particular report, however, made no mention of any direct contact with the Wenzhou migrants and most of the information contained was the same as that given to me by the Fengtai comprehensive security oﬃce, one of the bodies overseeing public security matters, especially those concerned with social problems (spontaneous migrants, drug use, pornography). Even some of the language was very similar, convincing Wenzhou government cadres that the Fengtai police had prompted the report, though there was no evidence to support this supposition.

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will be demolished!”. Their real reasoning was that an empty compound would be easily demolished, but if all the residents stayed on, government could do little. At this stage many owners truly believed that the impending clean-up would be just another ‘political typhoon’ and did not want to lose their tenants. On the afternoon of 27 October, seven or eight compound owners met for the ﬁrst time to discuss how they should respond; the meeting made three resolutions: continued vigilance, proactive contact with the media and lawyers and providing prompt updates on developments of the situation to the home authorities in Zhejiang. The rectiﬁcation of Zhejiangcun On 31 October 1995, the Wenzhou liaison oﬃce to Beijing held its ﬁrst formal meeting with compound owners to get their views. The director of the Yueqing liaison oﬃce, who had not been invited even at a time of crisis because he was not on good terms with the director of the Wenzhou oﬃce, joined the meeting midway, having been urged to attend by some compound owners. The meeting came up with three suggestions. First, the Wenzhou government was urged to ﬁnd out what the Beijing government was actually planning for the clean-up. The consensus of the compound owners was that the city authorities would not demolish Zhejiangcun in one fell swoop, but also that, this time, it was equally unlikely that there would be no demolition at all. Therefore, they stressed, now was the time to intervene and inﬂuence any plans for partial demolition. They agreed that the compounds had to police themselves eﬀectively in such times to prevent any serious criminal incident from occurring: any disputes should be dealt with internally and as quickly as possible. Second, the owners, such as Wang Yunli, suggested going on the oﬀensive: Part of my compound is blocking oﬀ a pavement and some public toilets. I’ll knock that part down ﬁrst. Everyone else should do the same. After that we can draft a report saying which buildings should be demolished this year, which next year, and which should be looked at again in ﬁve years’ time.

Zhou Qingchao, the owner of JW Compound, was not happy with this: “If you start doing that, even more people are going to want to move out”. This got Wang Yunli quite nettled: “Look at the situation we’re in now! If we don’t give some ground, they will come in for the kill!”. To which most participants agreed.

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A third suggestion was for the Wenzhou government to propose to the central and Beijing governments that the demolition be eﬀected in stages, with much discussion on how to determine which compounds were to be demolished. The unspoken worst fear was that the owners of the compounds to be demolished ﬁrst might push the government to demolish other compounds instead. Chen Cunsheng therefore suggested: “All 46 compound owners should put up some money, and we can use it to compensate whoever gets demolished ﬁrst—a bit like running a hui [ﬁnance society]”. But Liu Shiming thought it should be more like running an insurance company, that those who put in more should be compensated more when their compounds were demolished. The directors from both the Wenzhou and Yueqing liaison oﬃces also thought this a good idea, but the plan for a ‘compensation fund’ never got put into practice. The meeting also felt that the compounds should work in conjunction with the owners of the big markets, which could count on more support from government. But this was quickly seen to be unworkable soon after the meeting because the market owners, though also concerned about the impacts of demolition, had oﬃcial backing from Beijing government bodies, particularly those that leased them the land. While an oﬃcial clean-up could ﬂatly ignore any contracts signed with village committees, it would be hard to deny the legitimacy of agreements made with central and municipal government institutions. Just as Jingwen Market BIC branch had distanced itself from Zhejiangcun, it seemed that all the marketplaces owners had as well. One market owner spelt out the situation clearly for me: “I was visiting one of the government oﬃces a couple of days ago, and they told me that whatever I did, I shouldn’t get involved in any of the activities of Zhejiangcun”. And he had been living in Zhejiangcun all the while. The proposal that any demolition should take place in stages, area by area, was conveyed by both the Wenzhou and Yueqing liaison oﬃces to Fengtai government and police, together with the request that they be allowed to observe the clean-up, but they got no response. While the Zhejiangcun community was grappling with the many uncertainties and looming inevitability of clean-up demolitions ahead, in November 1995, Beijing municipal government proceeded in full swing with a ‘leading group for the clean-up and rectiﬁcation of Zhejiangcun’ (Zhejiangcun Qingli Zhengdun Gongzuo Lingdao Xiaozu) and assembling the 2,000-member clean-up work team. For its part, the

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Yueqing liaison oﬃce called another meeting of compound owners to stress the importance of maintaining solidarity and good social order in their compounds. The repeated eﬀorts from Wenzhou to get Beijing to delay or scale down their crackdown had come to nought. One oﬃcial from the clean-up leading group told me, in all seriousness, “this is a mission given by the state council. I hope you can give away your Zhejiang laoxiang guannian [old/hometown consciousness] in this matter”.

Daqingli! a demolition diary From early November, events unfolded dramatically at an unstoppable pace, as follows in my day-by-day record. 3 November 1995—Local police began dismantling the stalls set up by Dahongmen street committee along the east side of Dahongmen Road. Some stallholders ﬂocked into Jingwen Market or the newly opened Tianhai Market, which even led to a small increase in stall rents. Clearly, the big markets were a beneﬁciary of this part of the clean-up. 4 November—Several compound owners held another meeting with no concrete agenda. No action plan was arrived at either, but frustrations were poured out on the ‘legality’ of the demolitions: “what’s the actual point of the demolition?”. From their standpoint, Beijing government’s actions served no practical ends, which made it even more unacceptable. “If you’re knocking it down because the state wants to use the land I’ve no complaints, but if you’re going to let the land stand empty then I’ll ﬁght it. You can knock it down and I’ll just build it again!”, said Chen Shengjiang. 6 November—Beijing government ﬁnalised a clean-up work team that included oﬃcials from all relevant government departments and began a two-day training exercise; a communications network was set up in Zhejiangcun. Reportedly, Fengtai district government allotted 20–30 millions yuan towards the cost of this big clean-up. 8 November—The clean-up work team entered Zhejiangcun, split up into groups of 10–12 workers and went from door to door serving notice while announcements were being broadcasted at street corners: “only one migrant household permitted to remain for every local household”.

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11 November—Eve-of-battle rally for the 2,000-strong clean-up work team plus 600 police oﬃcers in Guangcai Stadium, close to Zhejiangcun. 13 November—All over Zhejiangcun, the clean-up team plastered the ‘Notice of the Beijing Municipal People’s Government concerning the clean-up and rectiﬁcation of Dahongmen area, Fentai district’ (Beijingshi renmin zhengfu guanyu qingli zhengdun Fengtai Dahongmen diqu de tonggao, see Xiang 2000: 559–561, Appendix 12). Some compound owners went to visit the village heads that had signed their landleasing contracts and warned them, one leader told me, “If they really do knock us down, we’ll see that it’s bad news for you as well”. 14 November—A key ﬁgure in the clean-up leading group, a middle-level oﬃcial at Beijing PSB, told me: “The [compound owners] are all watching now, and they’re especially keeping an eye on some of the bigger compounds. As they put it: ‘bei kan LQ , nan kan JO!’ [‘Watch what happens to LQ Market in the north, and JO Compound in the south’]”. This was the ﬁrst time I heard this coinage. The clean-up team reports no signs of voluntary demolitions, so the leading group decides to escalate the campaign. 15 November—Chen Shengjiang was taken into custody in the evening. 16 November—Liu Shiming anxiously asked: “Have you heard? Everyone’s saying that the watchword is: ‘Watch what happens to LQ in the north and JO in the south!’ This puts too much pressure on me”. Given Liu Shiming’s networks in Zhejiangcun, he too understood that it was highly unlikely that this watchword really originated among the migrants; even the phrasing did not have a Wenzhouese ring. 17 November—The clean-up team visited each compound and issued owners with an agreement for voluntary demolition, which they had to sign to indicate acceptance. Some compounds, starting with the oldest in Ma and Haihuisi villages, where proﬁts over the years had already far exceeded the initial investment, complied and partially knocked down their premises. In the afternoon, the Zhejiang liaison oﬃce met with the clean-up leading group to repeat the request to demolish the compounds in stages and to give the Wenzhou migrants more time to relocate; they were told to submit these requests in writing before 20 November. In the evening, when some

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compound owners met up in JO Compound, Liu Shiming tactfully conveyed that they would not meet there again: “I got a phone call from the police today asking me what we talked about at the meeting last night”. This put an end to any possibility of creating an alliance of compound owners, and no more big meetings were held among compound owners. 18 November—Zhejiang liaison oﬃce director paid an inspection visit to JO and other compounds and informed the owners that they were doing the best on their behalf, and that self-regulation within compounds should be improved to ensure public safety and order. 19 November—Yueqing liaison oﬃce (possibly instructed by Zhejiang liaison oﬃce) informed the Zhejiang provincial government and Yueqing authorities that they were due to hold ﬁnal talks with the Beijing authorities tomorrow. If these brought no success they hoped the Zhejiang authorities would make clear that they would take no further part in the clean-up and that “Beijing would be held solely responsible for the consequences”. 20 November—As required by the leading group, Zhejiang liaison oﬃce submitted their recommendations that the compounds be demolished in three stages, namely that 68.7 per cent of all illegal structures be demolished before 1 January 1996; a further 20.8 per cent by Chinese New Year of 1996; and ﬁnally the 10.5 per cent remaining. Their proposal was not accepted. “Find a new place . . . as quickly as possible” 21 November—The clean-up entered the ﬁnal, most severe phase: ‘enforced demolition’. The clean-up work team began daily visits to compounds that had not been demolished to urge the remaining residents to move out. A corporation from Wenzhou came to meet Liu Shiming to propose a partnership to set up new compounds in neighbouring Hebei province, and wanted him to bring in the tenants of JO Compound. At this stage, Liu was reluctant, partly because he still had some hope for JO Compound, but partly because he had never worked with a formal corporation before and simply did not know what such a joint venture would entail. 22–25 November—I was investigated by Beijing municipal PSB and told to immediately break all the links with Zhejiangcun. 26 November—The Beijing government sent a notice to all the suburban counties informing that they were not permitted to admit

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migrants from Zhejiang, in particular those ousted from Zhejiangcun by the clean-up. Some compound owners began to buckle down and reversed their earlier position to stand ﬁrm during the clean-up. Chen Cunsheng and Wang Yunli started posting notices asking residents to move out: “If the tenants don’t move out, we’ll be seen as opposing the government”. 27 November—At midday Liu Shiming was summoned to the clean-up campaign general headquarters (Qingli Gongzuo Zong Zhihuibu) in Zhejiangcun where the leading group was stationed. There he was confronted with ‘problems’ of his tax evasion and asked to give an explanation; the ‘discussion’ continued until 6pm. The tax evasion was clearly a pretext to put him under pressure and it worked. Liu Shiming told the JO management to post notices in the compound: “Will residents please co-operate with the government’s cleanup campaign and ﬁnd a new place to live as quickly as possible”. Liu also began to consider the possibility of a new compound development in Hebei. 28 November—Twenty-two compounds in Zhejiangcun had been emptied of residents. “The ﬁrst battle is won”, Beijing municipal government reported to the state council. To this, Premier Li Peng added the commendation: “The organisations of the Beijing city party and government at all levels have the capacity to ﬁght”, which Beijing Mayor Li Qiyan applauded as “the greatest possible support to our city, the greatest loving care. It should be transmitted with all speed to our comrades in the front line”. 1 December—A Wenzhou party committee oﬃcial arrived in Beijing to mediate with the authorities. But, after taking one of the top oﬃcials of the leading group to dinner, he knew not to pursue the matter any further; not even to visit Zhejiangcun. By this time, it was clear that Beijing government was determined to demolish all the compounds. 6 December—JO Compound shareholders held a meeting and decided to move operations to Hebei; Liu Shiming led the new development. At this point, the Wenzhou corporation earlier interested in a partnership pulled out, fearing that a mutual understanding with the businesspeople in Zhejiangcun would be too diﬃcult. 7 December—Liu Shiming signed a contract with Yanjiao township government in Hebei province (bordering Beijing) to lease 15 hectares of land for joint development. Liu Shiming would shoulder the investment and Yanjiao government would receive 20 per cent

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of the proﬁts as rent. By now, about 300 Wenzhou migrants had moved from Zhejiangcun to Yanjiao. 10 December—Beijing Daily reports: “A number of residents of Ma village have written to the leaders of state council to express their delight at the clean-up campaign in Zhejiangcun”. 13 December—JO Compound was completely empty but with a number of incidents of theft. Liu Shiming increased the number of shareholders on night security patrols: “We have to take care of the tenants’ things. We want to be together with them in the future”. 18 December—JO Compound was demolished. The big clean-up of Zhejiangcun came to an end. 21 December—As I watched a dozen Ma villagers led by a women’s federation cadre clearing up the site of a demolished compound one of them called out to me: “You must make sure [government] gets to hear about this. What’s the point of this being a pile of rubble? Where are we going to earn a living now?”.

Getting on with business During the big clean-up, Zhejiangcun migrants had either left to take up with the Wenzhou communities in other towns, or returned home or moved over to Yanjiao township, which Liu Shiming thought had excellent conditions for developing into a centre for production and wholesaling (and so did I). Yanjiao government saw the Zhejiangcun migrants as bringing in opportunities to revitalise the local economy and signs had been plastered all along the road into the town such as “The Yanjiao police welcome the Wenzhou businesspeople!” and “The people of Yanjiao welcome our Wenzhou friends!”. At the same time as signing the contract for a long-term project, Yanjiao government also made available a disused brewery and a newly built residential housing complex as temporary ports of refuge for the Zhejiangcun migrants. Most of the brewery site was leased by a Yongjia businessman, who sublet spaces within to individual households, mostly also from Yongjia. In the housing complex, Liu Shiming acted as middleman in the letting of apartments. He rented three buildings for 700,000 yuan, which he then sublet to former residents of JO Compound. He did not proﬁt from the subletting but did this to keep his tenants with him. The JO minibuses had been brought to Hebei and continued plying to and from Jingwen Market, charging 10 yuan for a ride.

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Soon, Yanjiao resembled Zhejiangcun in Beijing and a big sign on the road to the brewery proclaimed it as the way to “New Zhejiangcun” (xin Zhejiangcun). By the end of December 1995, the outputs of the producer households were 75–90 per cent of the value they had sustained in Beijing. It did not take long for a roadside cloth market to be set up in the town either, although the prices were slightly higher than in Beijing. Being there at the time, I felt very conﬁdent about the future of ‘New Zhejiangcun’. In the ﬁrst few days of January 1996, however, came yet another sudden development: some Zhejiangcun businesspeople in Yanjiao returned to Beijing and rented back their old houses from their former landlords! After a couple of days’ stay without incident, the news shot back to Yanjiao: “Beijing has loosened up again!”. Indeed, advertisements for property leases had appeared on the streets around Ma village and Gaozhuang village in abundance, many were oﬀers from factories or companies that had land close to Zhejiangcun and were willing to convert their workshops into residential structures. Thus, Wenzhou migrants from ‘New Zhejiangcun’, including the tenants in Liu Shiming’s three buildings, started to make tracks back to Beijing. This twist in events did not upset Liu Shiming as much as the demolition of his JO Compound, and he just shook his head with an air of resignation: “I thought Beijing would stay tough [ yan] for a bit longer and I could have developed Yanjiao properly before they relaxed again. Who’d have thought that things in Beijing would ease up so quickly?”. When I asked why he could not persuade his tenants to stay a bit longer, he smiled wryly: “You lose face if you ask them to stay. My friends and relatives come to ask me if I think they should go back, I tell them all they should go . . . I don’t care about the money I’ve lost”. His long-term compound development project in Yanjiao, of course, evaporated at once. By March 1996, just three months after the vigorously pursued demolition of Zhejiangcun, Dahongmen Road was once again reinstated with the hustle and bustle of migrant businesses; by September, Zhejiangcun had swelled to the size it had been before the big clean-up. My own prognosis too had been totally wrong, thanks to an incorrect assessment on two counts. First, I did not expect that whole clampdown operation in which the Beijing and Fengtai governments had invested so much money and labour, and from which it derived much kudos, would blow over without a trace of being immediately revived again. Second, I had misunderstood the nature of the power

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and inﬂuence wielded by the big players. I had thought that Liu Shiming and others would have been able to maintain their tenants in Yanjiao. But the charisma and prestige of these players primarily rested on their ability to inﬂuence and mobilise others through persuasion—it was never a relationship of direct or implied control. When Zhejiangcun migrants did not know what to do, where to go, they had followed the big players to Yanjiao; but once people found they could return to Beijing, the big players had no sway to hold them back.

Zhejiangcun compounds make a comeback As soon as Liu Shiming returned to Beijing, he was approached with a plan to rebuild a compound on the former JO Compound site, but did not have the nerve to do it. In early 1996, two other groups rushed to redevelop compounds, and by June 1996, the ﬁrst postdaqingli compound was completed at Nanding village in south Nanyuan township. Learning from their experience of the big clean-up, the Wenzhou migrants used various enlightened ruses to safeguard their new investments and compound developments, all of which drew on even closer involvements with local township and village cadres than before. One method was to have the village committees initiate constructions before the Wenzhou investors stepped in to help. For example, LY Compound was built in 1996 and belonged to Guoyuan village. In 1997, the village ‘contracted out’ the responsibility for recruiting tenants and day-to-day management to three Wenzhou businessmen. DLJ Compound in Gaozhuang village, however, was developed in essentially the same manner as those built before the 1995 big cleanup, that is, by being funded, built and managed entirely by migrants from Wenzhou, except for one distinction: the management claimed that DLJ Compound was a village committee project and that the ﬁve Wenzhou shareholders were their ‘employees’. Another way of safeguarding compound investments was to set up proper companies in partnership with Beijingers and develop residential compounds as company projects. After Liu Shiming came back to Beijing, the Nanyuan township party secretary lost no time in getting in touch with him. The Nanyuan authorities had played an important role in the big clean-up, but the party secretary, a

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pragmatic local cadre, had kept a low proﬁle throughout the proceedings. Once the campaign was over, he commented on a few occasions that now that Zhejiangcun was legalised, it was time for large-scale (re)development. He introduced Zheng, his relative, to Liu and they went into partnership. Zheng was the former head of the township clothing factory that had closed down because of competition from Zhejiangcun. After that, she went into property development. Liu and Zheng set up two companies: one registered in the name of Zheng’s former factory; the other a totally new enterprise, with Zheng registered as its legal representative. Liu Shiming assembled eleven shareholders to develop a compound opposite Jingwen Market as a project listed under the ﬁrst company. Liu also got seven others to invest in setting up a new market, this in the name of the second company. Using registered companies gave the compounds and their owners a more secure legal footing in leveraging any future interactions with government. Although JO Compound had also been a company project, TPY Apparel had no Beijingers as shareholders on the board and had not declared real-estate development as part of its business when it was registered. Yet another ruse was to describe the compound itself a company. Thus, what had once been Dongda Compound in Ma village now became ‘Beijing Muzi Fengfa Clothing Company Leather Goods Centre’. Similarly, the nameplate on the gate of Sui Qing’an’s compound read ‘DB Clothing Company’. Sui, the major shareholder of the compound, told me that if it were again threatened by a cleanup, he could point out: “I’m a proper company here. What you have inside are the various enterprises of the company—it’s not a residential compound”. The compound that attracted the most attention in Zhejiangcun after 1996 was HQ Leather Centre, which occupied the premises of the state-run HQ Rubber Factory, which had ceased production in 1995. Song Deqing, a rich Wenzhou migrant, and his partners leased the factory and partitioned its workshops into smaller spaces, which they then sublet as garment workshop-cum-residences. They also built their own restaurant, kindergarten and sauna/bathhouse at the site; the rubber factory’s clinic continued to function serving the migrants. The annual rent paid for the site was over 2.3 million yuan, which became the main source of subsistence pay for the factory’s 150 laidoﬀ workers. This particular compound development had a very strong legal position: it was helping to ameliorate the vexed social issue of

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laid-oﬀ state employees and, so claimed the compound’s publicity material, functioned “to the beneﬁt of social stability”, which was why they had no qualms about erecting such a large sign at the gate proclaiming who they were. Another trick was to develop compounds on land under the jurisdiction of neighbouring Yangqiao street committee rather than Dahongmen. Street-wise after living for so long in the capital, the Wenzhou businesspeople had noted that if two neighbouring streets came under diﬀerent jurisdictions, the policy climate could be completely diﬀerent. Just like the welcoming response of the Yanjiao township authorities in Heibei, Yangqiao street committee too saw the clean-up in Dahongmen as an opportunity to attract Zhejiangcun residents to come over and lease their land instead. When those who had gone to Wenzhou communities elsewhere returned to Beijing after the clean-up, some had still felt unsure about the situation in Dahongmen, so they ﬁrst settled in Yangqiao to watch developments for a while. Not only was the political climate more relaxed, the rent was much cheaper too and, after 1996, many Wenzhou migrants, especially those from Yongjia, moved into Yangqiao. Steering ahead on a legal course The big clean-up and demolition of all the Zhejiangcun housing compounds should not imply that the state continued to have absolute control in determining the fate of Zhejiangcun. Apart from the swift comeback of the migrants and the redevelopment of compounds, the demolition led to a series of disputes between migrant compound owners and Beijing government or semi-government agencies such as village committees. Hardened by the clean-up, the migrants in fact became more keen to negotiate directly with the state, with a sharper awareness of legal recourse in doing so. In early 1996, as the Wenzhou migrants staged a comeback, the ﬁrst priority for many former compound owners was to obtain compensation from those whom they had beneﬁtted. Jiujingzhuang village committee returned all the rent paid by JO Compound and, on top of that, purchased the equipment that had been installed (like water pumps and electrical substations) at a discounted price. And when a Beijinger who was caught taking roof beams from the site of JO Compound turned out to be a relative of a village cadre, the

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cadre invited Liu Shiming and the other major JO shareholders to dinner by way of apology. There was also an increasing number of lawsuits taken out against government and quasi-government bodies by the returning Zhejiangcun migrants. In November 1997, a dispute arose between traders operating in Dahongmen Clothing Centre and Nanyuan township government. This wholesale centre was built by a company set up by the Nanyuan government in 1996, immediately after the big cleanup, and had a total of 2,600 pitches, making it the biggest marketplace in Zhejiangcun. The 160 traders operating in the underground section of the market sued the management, practically Nanyuan township government, on grounds that the structure of that section was diﬀerent from that which had been promised in the contract when they paid their rent deposits before the completion of the market. They therefore wanted part of their rents for the pitches returned. The traders pooled funds, brought in journalists and hired a lawyer. They spent 50,000 yuan on this ﬁrst lawyer, but the general feeling was that he was not competent enough, so they sacked him. Just as they had hired their second lawyer, the company agreed to settle out of court. The Nanyuan government company returned the rent with interest accrued, awarding 9,000 yuan for each pitch. On 19 March 1998, LH Law Centre, a Beijing-based law ﬁrm, convened a ‘friendly consultation meeting’ (kentanhui ) in Zhejiangcun in the hope of getting potential clients. They invited all the wellknown ﬁgures in the migrant community. At the meeting, which was actually a banquet, Liu Zebo made a speech, switching between Mandarin and his native Furong dialect: “Running a business is like sailing a ship. With the help of the law agency, we know what direction the ship should head for, and we can do our business peacefully”. These were not just eloquent niceties; the community of migrant Wenzhou businesspeople genuinely felt that the lawyers could be an important and necessary support to their enterprises. Many of my friends from Zhejiangcun expressed regret that I had no interest in becoming a lawyer.

CONCLUDING REMARKS

The tension between Zhejiangcun and the state can be attributed to the tension tracing to the imposition of a highly regionalised administrative system of governance on an increasingly widespread but divergent reality of trans-regional mobility of populations and resources. Even prior to reform, though appearing highly integrated, China in fact institutionally comprised a large number of regional societies. Thus, statistical reports and economic plans for each region were compiled and drafted separately, resulting in what became known as the ﬁefdom economy (zhuhou jingji ), an allusion to the independent kingdoms of ancient China where each administrative region, particularly at the provincial level, pursued self-suﬃciency, with little economic activity across (provincial) boundaries. The economic wars of the 1980s between cities and provinces competing to purchase goods that were in short supply, such as live pigs, wool, silkworms and coal, were typical outcomes of this situation.1 This regionalisation in economy and administrative regulation in pre-Reform China embodied a particular idea about social control, one that saw conﬁning the activities of social actors to a particular physical space as the most eﬀective means of regulating order. The most direct instrument in this control paradigm, the hukou or household registration system, denied individuals the right of changing residence without state permission, and had combined with the work unit system in the city and the commune system in the countryside to form a tight placebased administrative regulatory system.

1 The ‘war’ over pigs involving Guangdong, Sichuan and Hunan, for example, lasted for a long time. Sichuan and Hunan produced pigs, but Guangdong’s consumption power was greater so it had sought to buy pigs from farmers in the two provinces at higher prices than the local going rate. Fearing that this would drain away their supply and cause a rise in local prices, the governments of Sichuan and Hunan often sent special inspection teams to the border regions to arrest and ﬁne farmers found transporting their pigs south. Guangdong responded by using every means possible to encourage farmers to smuggle pigs to their province. When such ‘wars’ escalated, high-level provincial oﬃcials sometimes had to petition the central government for intervention.

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Coming into the post-Reform era of the 1990s, there was a major transformation of China’s economy, one of the most important aspects being the emergence of a uniﬁed national market, including one for labour. However, no major corresponding changes were made to the existing administrative and social control systems. This created a situation whereby populations who chose to migrate despite not having the freedom to change their place of residence (by then almost the norm in rural China) were at once outside of the regulatory system. In many cities and towns in the Pearl River Delta, for example, where migrants had for a long time far outnumbered the native population, outsiders have never been included in local statistics or provincial economic and social development plans: thus, they become a ‘suspended group’ (Xiang 1995). To deal with what had already become a feature of Chinese life, particularly in southern provinces such as Guangdong, in the mid-1990s, central government recommended a policy principle of ‘regulation based on location’ (shudi guanli ) that gave local authorities (of the receiving place) the ﬁnal say in any incidents involving spontaneous migrants. But ‘regulation based on location’ was not concerned with migrants’ day-to-day requirements such as housing, medical care and education. Even so, adopting this principle in managing isolated incidents did not always work well because an ‘incident’ could occur in one location while the migrants involved came under the jurisdiction of a local authority elsewhere. The 1995 ‘rectiﬁcation’ of Zhejiangcun by the Beijing city authorities and the stand-oﬀ pursued by provincial Zhejiang government clearly illustrated that state authority was handicapped by rigid placebased demarcations. Various levels of Zhejiang administration had actively intervened in favour of the migrants throughout the buildup to the ﬁnal demolitions, though their motives for doing so changed as the situation unravelled. At ﬁrst, the Zhejiang authorities had tried to stall the operation and protect the migrants’ business interests because they felt that these had potential value for Zhejiang’s own development. Similarly, an intervention by the Yueqing liaison oﬃce was also related to the then director’s personal interests as a shareholder of JO Compound. When it then became clear that Beijing city government was determined to go ahead with the demolitions with backing from central government, the Zhejiang authorities continued to be closely involved so that they might be able to take preemptive action in any incidents for which they might be blamed (an

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anxious senior ﬁgure in the Wenzhou government even suggested at the time that I write articles in the main national newspapers on “how to form a correct view of Zhejiangcun”). But in spite of their fears of the central government’s opprobrium, the Zhejiang authorities refused to support their Beijing counterparts in the crackdown. Consequently, when the Wenzhou party committee oﬃcial invited a top oﬃcial of the clean-up leading group to dinner, it was not to curry favour but to underscore that the Beijing side should fully consider the repercussions of their crackdown. The Beijing authorities had of course made it clear that they did not want the Zhejiang authorities’ participation. This situation recalled the conﬂicts between Fengtai district and Wenzhou municipality over their joint management of Jingwen Market as well as the failed experiment to set up a Zhejiangcun militia. Whilst the migrants’ networks transcended administrative boundaries, the estrangement between diﬀerent local governments showed no signs of loosening. The story of Zhejiangcun also highlighted the fragmentation within government along departmental lines. Within Beijing government, the economic departments (e.g. BICs) had sought to collaborate with Zhejiangcun while those in charge of public security (e.g. PSBs) advocated getting rid of the migrant community altogether. Partly addressing this situation in 1995, I had proposed that the city government allocate a speciﬁc zone in Daxing county (south of Dahongmen) where the Zhejiangcun migrant producers could live and manufacture garments, whilst allowing the traders to run marketplaces in Dahongmen. Put diﬀerently, my suggestion was that the residential and manufacturing areas and the trading spaces be assigned under separate regulatory jurisdictions: the trading markets under the economic departments and the public security departments having responsibility for the residential and manufacturing compounds. This would also ameliorate the heavy demands on the urban infrastructure in Dahongmen and Fengtai district from the overly dense concentration in Zhejiangcun. One deputy mayor had showed interest in this idea and passed my proposal on to the relevant departments of the Beijing city government and Fengtai district authorities, but before any consideration had even properly begun, the order for the big clean-up came down from the state council. The Beijing government immediately threw itself full tilt into the rectiﬁcation campaign and no one was interested in discussing longer-term policy anymore.

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The all-out demolition campaign did not reduce the tension in the disparate outlooks between diﬀerent departments in any way. On the one hand, Wenzhou migrants would not be permitted to reside in Dahongmen. On the other hand, and yet again spurred by considerations of economic gain, the Beijing government had proceeded to build Dahongmen Clothing Centre marketplace, even holding the grand foundation-laying ceremony just as the big clean-up had ended, with high-level oﬃcials from Beijing city government in conspicuous attendance. No one seemed to see irony in this. I put the question to one of the leaders of Nanyuan township charged with overseeing the development of the project: “You’re encouraging [Zhejiangcun migrants] to trade in your marketplace, but where do you expect them to live?”. He pondered this for a while, then replied: “They’ll come up with a way round that!”. This absence of co-ordination between the economic and public security arms of government may have provided space for the unregulated migrant economy to grow but, ultimately, represented an institutional failure to formulate a coherent or longer-term regulatory stance: the high incidence of crime in Zhejiangcun was a direct result. To understand the relationship between Zhejiangcun and the state, therefore, we must distinguish the state’s ability to implement punitive ‘campaigns’ from its institutional capacity to manage day-to-day public order. Despite continual demonstrations of its impressive ability successfully to execute large-scale crackdowns, the ability of the state in China to carry out direct surveillance of the citizenry has weakened since the beginning of the Reform without being replaced by any eﬀective means of public administration and regulation, such as through welfare provisions. While the government in China is still able to mobilise resources and co-ordinate actions across administrative jurisdictions for short-term campaigns, the fragmented and boundaried spheres of responsibility, a legacy of the old political system, severely undermine its routine functioning and ability to come to grips with and respond to newly emerging social phenomena. It was precisely because of this disconnection that Zhejiangcun was cleaned up so thoroughly in 1995 but could reappear so quickly thereafter.

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concluding remarks Transcending boundaries from below

The internal fragmentation within state institutions was of course not the main explanation for Zhejiangcun’s rapid development and astonishing tenacity. As this account reveals, Zhejiangcun’s economy transcended boundaries ‘from below’, on the migrants’ own terms. First, Zhejiangcun and the nationwide Wenzhou business networks were the results of peasants’ choices in migration and business activities— as opposed to transregional initiatives and networks organised by institutions such as companies or local governments (e.g. liaison oﬃces). More importantly, Zhejiangcun transcended boundaries based on the eﬀorts of ordinary individual producers and traders, as opposed to that of big players in the community. In Zhejiangcun, each household or individual established close connections with regional, national or even international markets through their xi, and collectively these xi expanded and radiated in a horizontal manner without concentrating access to connections among a few. This mode of transcending boundaries lent the Zhejiangcun economy special strength. In what follows, I will recapitulate the nature of this feature of the community by addressing two questions: why had vertically structured organisations such as formal enterprises or commercial associations not developed in Zhejiangcun and been substituted for xi ? And how should we reconcile the emergence of big players, which implies a certain vertical or hierarchical structure, and the horizontal expansion of Zhejiangcun? Two reasons can be forwarded for the ﬁrst question. First, the very nature of the circle of family and friends on which the migrants based their social life and through which business relationships were monitored inhibited the development of the stratiﬁed forms of management necessary for formal enterprises. Furthermore, with the widespread overlapping of diﬀerent xi, no one could hold a monopoly in any special product or technology—a new style of garment invented by one household would soon be known to everyone in the community. In other words, the obligations and norms of co-operation and exchange fostered within a circle of family and friends formed an obstacle to setting up formal enterprises within a xi, and the intersection of diﬀerent xi blurred the boundary between intra- and interﬁrm relations. Second, in most circumstances, formal enterprises replace other forms of economic organisation partly to beneﬁt from economies of

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scale. In this regard, Zhejiangcun accrued its own substitutes obviating the need for formal enterprises. The functioning of xi kept the cost of searching for information, bargaining, inspection and enforcement very low. The connectivity of national migrant business networks also compensated for the small scale of household-based production by making the inter-household ﬂow of products, information, material, labour and money highly eﬃcient. The end result, though there were very few formal or large-scale enterprises in the Wenzhou migrant business hub, was that all the households in Zhejiangcun had access to many opportunities for development. This horizontally impelled expansion of Zhejiangcun did not run contrary to the emergence of big players, both were mutually enhancing dynamics in Zhejiangcun’s development. As was seen in the case of their residential compound developments, big players rarely embarked on ventures individually, but usually worked with multiple partners. The circles of co-operation essential for the success of residential compound and marketplace projects were composed not only of big players, controlling shareholders and sleeping partners, but also the overlapping xi of all these various individuals. In as much as each big player brought in ‘his own people’ as tenants for compounds or marketplaces, these tenants became his responsibility. Through the connections then made and consolidated among the circles of co-operation, a big player might also win inﬂuence in his partners’ xi, as, for example, Pan Zhongqing grew to be an inﬂuential ﬁgure in Zhejiangcun as a whole beyond his own xi of Yongjia natives. In this way, although there is a certain vertical diﬀerentiation within a particular big player’s xi, at the community level, big players won their inﬂuence through the horizontal overlapping of diﬀerent xi; hence the incentive continually to broaden connections by bringing together diﬀerent xi. The dialectical relationship between horizontal expansion and the emergence of big players was another conﬁrmation of how Zhejiangcun transcended boundaries from below. Xi-based business networking led to a situation where individual families managed and furthered their own day-to-day dealings with the outside world, while the big players concentrated their activities within the environs of Zhejiangcun, mainly by providing public amenities and mediating in disputes. This is in clear contrast to the experience noted of many other migrant communities. Kurt Lewin (1948) distinguished migrant community leaders who come from the ‘centre’ and those from the ‘periphery’,

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an idea subsequently developed by Werbner (1991).2 In communities with vigorous economic activities, eﬀective leaders are normally found at the periphery, where they derive their authority from their contacts with the outside world and their control of resources such as the access to the mainstream market. At least in some overseas Chinese communities, there has been a trend of leaders from the centre being replaced by leaders from the periphery. For example, both Wong (1982) and Pieke (1998) document the transformation from a traditional community leadership to a civic-association-style leadership in Chinese communities in New York and The Netherlands. While the traditional community leaders, often with not much formal education, tended to keep a distance from the mainstream society, the civic-style leaders were keen to penetrate the mainstream societies and actively sought general public resources to beneﬁt their communities. But in the case of Zhejiangcun, a vibrant economic community with no signiﬁcant religious elements in its social life, big players derived their authority from the ‘centre’ rather than the ‘periphery’, from the thick of internal organic networks rather than from a monopoly of strategic access to outside contacts. Thus, the role of big players was both intrinsic to intensifying internal networks and a necessary dynamic for the outward expansion of the migrant community’s business networks.

Policy implications The case of Zhejiangcun, in particular its internal dynamism, oﬀers some important lessons for government. First, the importance of the organic networks within the migrant economic community should be recognised and even encouraged by local authorities, if not central government. The dense business networks in Zhejiangcun contributed to the formation of the Wenzhou migrants’ national business net-

2 According to them, the ‘centre’ is the locus of high economic or cultural value and of dense networks of interaction within which ‘organic’ ethnic leaders and elites foster and develop distinctive ideologies, values, and institutions. Communities or organisations with strong religious or ideological elements often had leaders at the ‘centre’. By contrast, the ‘periphery’ is the locus of the social and cultural links forged across ethnic/community boundaries by brokers or representatives of the community to the mainstream society.

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works, including the factor markets that have been crucial for their highly competitive enterprises in Beijing. Because of these networks, the elimination of Zhejiangcun is ultimately impossible—physical structures can be demolished by government clean-up campaigns but the national business networks can hardly be rooted out. More importantly, the dense networks have both created and spread economic opportunities to the widest possible population of the community. Farmers arriving from Yueqing with minimum capital soon started up their own businesses; their employees from Yongjia soon also became bosses; and their sales assistants recruited from such places as the countryside in Anhui province eventually almost monopolised the clothing trade in swanky downtown Wangfujing. Zhejiangcun’s lack of large-scale modern enterprises and the prevalence of small household business should be seen not as indicators of ‘backwardness’ but as oﬀering a very eﬀective model for absorbing surplus labour from rural China. The main anxiety in government circles is that encouraging migrant business networks may lead big players to turn the tables on government. My observations in Zhejiangcun suggest that this is an unlikely scenario. In fact, as with Liu Shiming, for instance, big players had strong incentives to co-operate with government. Networks have helped migrant farmers to access and create economic opportunities, acquire the basic requisites for production or trading and, therefore, transformed them from manual labourers into petty bourgeoisie: the more developed the networks, the better the chances for rural migrant labourers to become propertied. Though it is unlikely that such small businesspeople will be loyal to the state, there is no reason to imagine that they would turn out subversive. In the current social circumstances in China, members of the petty bourgeoisie remain among the most conservative social forces and have been particularly keen to maintain social stability. They are active and independent agents of social change, but they are far less disruptive of social structures than usually assumed. Second, the case of Zhejiangcun suggests that a discretionary balance between diﬀerent social forces is crucial for China’s development. China needs strong government, but not an administrative system based on one-way control by state over society. For example, government could encourage owners of residential compound developments to take an active role in managing welfare in their compounds, while at the same time ensuring that they will not gain an

180

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absolute monopoly over residential property and make tenants dependent on them. At a higher level, the rigidity of regional, administrative and economic boundaries in administrative systems need to be dismantled in order that more ﬂexible and responsive regulatory mechanisms can develop. Until very recent times, Beijing government forbade the sale of minibuses made in other parts of China to protect local manufacturers. It had also planned to levy a bed tax of one yuan for each guest per night on hotels, and it constantly criticised the migrant population for the amount of meat, vegetables and coal they consumed without any understanding of how such vigorous consumption beneﬁted the local economy. Even the problems of public order in Zhejiangcun, such as the activities of criminal gangs, are not due to the community’s expansion or persistence, but to the failure and inadequate extension of existing regulatory mechanisms to support the community. There is no single comprehensive policy package to solve the problems of Zhejiangcun, but for a start, local government could focus on the various disparate points where the community intersects with urban society, for example, by giving more autonomy to the street and residents committees that frequently interact with the migrants directly, and by fostering co-operation between grassroots administrative bodies and the migrant community’s measures for self-regulation. Put simply, the kind of thinking that hopes to somehow maintain a small island of peace and stability by erecting high walls around the authority of the state is unrealistic and needs to be changed completely. Lastly, the story of Zhejiangcun clearly attests to the fact that spontaneous rural-urban migration can be a critical force for national development, and not a threat to the proper regulation of order. Yes: spontaneous migration and migrant communities pose a challenge to governance; but had people been forcibly bound to remain in the countryside, they would have posed challenges of a completely diﬀerent nature in opposing the authority of the state. When Zhejiangcun businesspeople sued the authorities, or attempted to negotiate with them as equals, they were behaving as actors of ‘civil society’. Challenges such as the overburdening of the local transport system and the rise in local crime can be dealt with through ordinary regulatory mechanisms. But to exclude China’s 800 million farmers from the country’s urban-driven development opportunities can only lead

concluding remarks

181

to profound social conﬂicts and instability. Rural populations would be more likely to adopt violent stances in confrontations with government, as indeed happened in the late 1970s and early 1980s in some parts of Wenzhou, and still happens in some places in rural China.

GLOSSARY

bai ditan —makeshift stalls or carts on the street baodifei —bottom-line fee ba shiqing baiping —put matters level ban —‘climbing on’ (a customer) bangpai —gangs beijing —background Beijing Daxue Aixin She —Beijing University concern association Beijingshi renmin zhengfu guanyu qingli zhengdun Fengtai Dahongmen diqu de tonggao —Notice of the Beijing Municipal People’s Government concerning the clean-up and rectiﬁcation of Dahongmen area, Fengtai district bei kan LQ, nan kan JO LQ , JO—Watch what happens to LQ Market in the north, and JO Compound in the south bianmao —cross-border trade buyi jiuliu, yihong weizhu —inappropriate to be allowed to remain indeﬁnitely, use expulsion as the main measure caizheng baogan —work-unit-based responsibility system for ﬁnancing chai —demolition chaxu geju —a pattern of diﬀerentiation chengfen buhao —a bad background chenghui —a type of revolving credit society Chengxiang Maoyi Zhongxin —Town and Country Trading Centre chi wo de mainzi —literally, eat my face, show me some respect chi wuyande —eaters of the black smoke chu yangxiang —‘foolish foreigner’ chuzu —leasing out citang —clan shrine dai hongmaozi —wearing a red hat dai ren lai —bringing people along daixiao —consignment selling daqingli —big clean-up darenwu —big players dayanmao —big peak dayuan —residence-cum-production compound doufu —tofu/bean curd Du pai —Du faction duihua —hold talks duiyi —playing chess fang —branch (of clan) feifa shouru —illegal income fuwu she —commune’s service co-operative gaige kaifang —reform and opening gei wo yige mainzi —give me face/show me some respect geti —individually-run business gongshe —commune gongxiao dajun —supply and marketing army gongxiao yuan —supply and marketing person

184

glossary

gongzuodui —work teams guanxi —personal connections guakao —hooking up guanyu chengzhen zanzhu renkou de zanxing guiding— Provisional rules on temporary resident population in urban areas guoji daoye —independent cross-border traders guokuquan —treasury bonds heixin qian —black heart money heqi shengcai —peace brings wealth hezuoquan —circle of co-operation hou —thick hua longchuan —dragon boat (made of lantern) parade hui —ﬁnance society hukou —household registration system jianjue dizhi luan shoufei —resolutely resist the arbitrary imposition of fees jianyi kexing —the solutions proposed are practical jiedao —urban street divisions jimao shichang —pedlars’ market Jingwen Fuzhuang Pifa Zhongxin —Jingwen Clothing Wholesale Centre Jingwen Shichang Aixin Xiaozu —Jingwen Market concern group Jingwen Shichang Gongshangsuo —Jingwen Market branch of the BIC jizi —collective investment jumin —resident kaoshan —mountain to lean on kentanhu —friendly consultation meeting laoda —elder brother laowu jieshao suo —private labour agencies laoxiang guannian —old/hometown consciousness lianfangdui —militia Lian pai —Lian fraction lianying —joint operation liudong renkou —ﬂoating population Liu laoda —elder brother Liu liwaiyoubie —distinguishing the inside from the outside min’gong —peasant workers, rural migrant workers in cities mingyu suishi fei —compensation for damage to reputation minzheng ju —bureau of civil aﬀairs moshou —conﬁscate mu —unit of measurement of land (1 mu = 0.1647 acres = 0.0667 hectares) nanmin —refugee neican —internal report nongmin —peasant pengyou —friend pifa dian —wholesale spot pijiakecun —leather-jacket village qingli —clean-up campaign Qingli Gongzuo Zong Zhihuibu —clean-up campaign general headquarters Qingming jie —Tomb Sweeping Festival qinyouquan —circle of family and friends qu —district

glossary

185

quanmin suoyou, jiti jingying —run collectively under nationalised ownership qunzhong ziwo zuzhi —self-organised popular organisation san’gu —spreading shares shaoniangong —children’s palace she —association shedui qiye —commune and brigade enterprise shengchan zhihuibu— production supervision command shegongye she —handicrafts co-operative shengyiquan —business circle shequ —community shifu —master shishiquishi —credible, based on facts/evidence shudi guanli —regulation based on location shuihuo —water goods suzhi —quality of person taihui —raising society tanweire —market-stall craze taobi —evasion touji daoba —seeking proﬁt through illegal means tudi —disciple weiwen —oﬃcial greeting wubao hu —ﬁve guarantees household wudou —violent struggle xi —clusters of connections xiandai shichang zhidu —modern market system xiang —rural township xin Zhejiangcun —new Zhejiangcun xinxi yuan —information personnel xiongdi —brother xiaozu —group (as opposed to association) xiujian she —construction and repair co-operative yan —tough yinchangjindian —bringing the factory into the shop yiqi gan —doing it together you benshi —have the capacity yundao —fortune zanxing guiding —provisional regulations zanzhu zheng —temporary residence permit zhaoshang —recruiting traders Zhejiangcun Qingli Zhengdun Gongzuo Lingdao Xiaozu —leading group for the clean-up and rectiﬁcation of Zhejiangcun Zhejiangcun Shehui Gongzuo Xiaozu —Zhejiangcun social work team zhen —town, small urban area in the countryside zhibian —campaign to support the construction of the border areas zhili fang’an —plan for imposing order Zhongguo Qingfang Cheng —China’s Light Textile City zhuhu shouze —rules for residents zhuhou jingji —ﬁefdom economy zilü —self discipline ziyou shichang —pedlars’ markets zuo daren —being a big man zuo guanxi de shengyi —doing the business of guanxi zuohaoshi —charitable works, or doing good deeds

GLOSSARY OF PLACE NAMES

Part I HOME PLACES OF ZHEJIANGCUN MIGRANTS IN WENZHOU PREFECTURE, ZHEJIANG PROVINCE, MENTIONED IN THE TEXT YUEQING COUNTY (upgraded to a ‘county-level city’ in 1993) Dajing township Furong township* Shanggutou (natural) village** Hongqiao township Qianjiayang (administrative) village*** Heshenqiao (administrative) village*** Lingdi township Qingjiang township YONGJIA COUNTY Wuniu township Qiansanfang village

* A rural ‘town/township’ (xiang or zhen ), the lowest level of national government in rural China. ** A (natural) village (zirancun ) usually refers to geographically distinct clustered settlements or hamlets. ***An administrative village (xingzhengcun ) with its executive village committee (cunmin weiyuanhui ) is the lowest level of administration in rural China, but it is not a government institute.

glossary of place names

187

Part II ADMINISTRATIVE UNITS IN FENGTAI DISTRICT (QU )*, BEIJING, WITHIN THE AREA COVERED BY ZHEJIANGCUN YANGQIAO STREET** (partial) DAHONGMEN STREET (partial) Haihutun residents committee

***

XILUOYUAN STREET (partial) NANYUAN TOWNSHIP Shi administrative village Ma village Shi village Deng village Hou village Guoyuan administrative village Haihuisi village Gaozhuang village Sujiapo village Dahongmen administrative village Jiujingzhuang village Donglouyuan administrative village Shiliuzhang administrative village

(the central area of Zhejiangcun)

* A district of Beijing is of the same administrative rank as a prefecture such as Wenzhou. ** An urban ‘street’ area ( jiedao) is the equivalent of a rural ‘town/township’ (xiang or zhen), the lowest level of national government in rural China. *** Residents committee ( jumin weiyuanhui ) is the body below street and is supposed to be residents’ self-governance organisaiton rather than government institute, equivalent to an administrative village in the rural area.

188

glossary of place names

Part III ALL OTHER PLACES Anhui (province) Beijing (city) Chongqing (city) —part of Sichuan province until 1997 when it was upgraded to the status of municipality directly under the central government in China Baigou —a town of Gaobeidian city, Hebei province Baoding —city of Hebei province Baotou —a large city of Inner Mongolia Changchun —capital city of Jilin province Chengdu —capital city of Sichuan province Chongwen district —a district of Beijing Datong —a city of Shanxi province Daxing —a county of Beijing Dunhuang —a city of Gansu province Erenhot —a city of Inner Mongolia Fuling —formerly a city of Sichuan province, now a district of Chongqing municipality since 1998 Gaoyang —a county of Baoding city, Hebei province Gezhouba —a city in Hubei province Jiangsu (province) Harbin —capital city of Heilongjiang province Hebei (province) Heihe —a city of Heilongjiang province Henan (province) Hong Kong (special administrative region) Ji’nan —capital city of Shandong province Jiangxi (province) Jilin (province) Jingmen —a city of Hubei province Jiuquan —a city of Gansu province Kunming —capital city of Yunnan province Keqiao —a town of Shaoxing county, Zhejiang province Lanzhou —capital city of Gansu province Liaoning (province) Li county —a county of Baoding city, Hebei province Liusha —a town of Shantou city, Guangdong province Liushi —a town of Li county, Baoding city, Hebei province Manzhouli —a city of Inner Mongolia Panjin —a city of Liaoning province Pengzhou —a city of Sichuan province Shanghai Shaanxi (province) Shaoxing —a county of Shaoxing city, Zhejiang province Shenyang —capital city of Liaoning province Shijiazhuang —capital city of Hebei province Suifenhe —a city of Helongjiang province Taiwan Taishun —a county of Wenzhou city Taiyuan —capital city of Shanxi province Tianjin (city) Wanxian —a city of Sichuan province Wuhai —a city of Inner Mongolia

glossary of place names Wuhan —capital city of Hubei province Wuyi —a county of Zhejiang province Xi’an —capital city of Shaanxi province Xinjiang (Uygur autonomous administrative region) Xuanwu district —a district of Beijing Yanjiao —a town of Sanhe city, Hebei province Yichang —a city of Hubei province Yunnan (province) Zhejiang province Zhengzhou —capital city of Henan province Zhongwei —a city of Gansu province

189

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INDEX

1995 clean-up; see ‘big clean-up’ ‘57’ Oilﬁeld, 33 administrative system, xii, 1, 7, 172, 187–188; see also governance, state fragmentation in, 7, 116–117, 174, 176 shudi guanli (regulation based on location), 173 territorialised, xi, 1, 3 zhuhou jingji (ﬁefdom economy), 172 administrative village, 7, 30n.1; see also village committees Andhra Pradesh, xiii Anhui (province), 2, 5, 9, 87, 110, 171, 179 Anhuicun, 5 anthropology, xv community, concept of, xiv–xv, 10–13, 20 chaxu geju (a pattern of diﬀerentiation), 12 Chinese perspective, 10, 12, 13n.2 ‘Chinese Social Studies School’, 10 ethnography, ix, xv, 2–3, 26 functionalism, 10–11, 20 holism, xv shequ (community), 10 transnationalism/transnational, xiii–xiv Baigou (town), 107 Baoding (city), 131 Baotou (city), 37, 43 beijing (background), 15–16; see also relationship cluster, xi Beijing Daily, 46, 166 Beijing municipal government, 2, 9, 14, 46, 156, 159–165, 174, 180 Beijing Number One Reform Through Labour Camp, 121 Beijing University (BU), 10, 145–146 Zhejiangcun social work team, 27, 147–148, 150–152 ‘big clean-up’ (daqingli ), xi, xvii, 9, 14–15, 24, 77–78, 159, 162, 166–168, 170–171, 174–175; see also clean up/s

demolition, 14, 159–164, 167, 170, 173, 175 big players, 9, 13–16, 23, 27, 52, 61, 68–70, 74–75, 84, 109, 124, 133, 139–143, 145, 153, 168, 176–179 circle of inﬂuence, 14, 61, 136 co-operation circles, 124, 143, 177; see also compounds, marketplace developments zuo daren (being a big man), 142 big players (individuals) Chen Cunsheng, 14, 94, 138–139, 141–142, 145, 161, 165 Chen Shengjiang, 135–137, 162–163 Fu Jiatian, 18 Fu Tianlang, 16, 68, 124–125, 130, 142, 155, 158 Gao jianping, 18 Liu Shiming, 15–16, 18, 27, 61, 73–75, 83, 95, 120, 130, 139–142, 144, 151, 153–156, 158, 161, 163–169, 171, 179 Liu Wenhua, 71–75, 142 Mei Jianguang, 52, 69, 71 Pan Zhongqing, 138–139, 177 Shan Jinjia, 124–125 Song Deqing, 169 Wan Xianjie, 135 Wang Yunlin, 160, 165 Xie Jigao, 133 Xu Longshui, 153 Zhou Qingchao, 155, 160 Zhou Zuohai, 94 Zhou Zhuquan, 42, 47, 63, 104 border trade, see cross-border trade boundary/boundaries, ix, xii–xiii, xvii, 1, 3, 7, 10–12, 16, 20, 122, 172, 174, 176–178, 180 bureau of civil aﬀairs, 146n.1 bureau of industry and commerce/BIC, 42–43, 48, 50n.1, 51–52, 59–60, 88, 106, 112, 119, 133, 174 Beijing municipal, 49–50 Fengtai district, 60, 111–113, 115–119, 146, 149, 156–157 Jingwen Market branch, 113, 116–117, 141, 146–149, 161

194

index

Wenzhou, 111–112, 117, 119 Xicheng district, 46, 50 Xuanwu district, 37–38, 42 Yongjia, 112 Yueqing, 44, 87n.2, 89, 112 Byelorussian co-operative, 68 capital, 2, 20, 23, 37, 56–57, 69, 79, 81–82, 85, 92, 95, 108, 123, 128, 130, 179 ﬁnance societies, 37, 90–93, 161 ‘capitalist tails’, 30 caste, xiii central government, 2, 157, 161, 172n.1, 173–174, 178; see also state council Changchun (city), 84 Changchun Street, 42 Chaoyang district, 5 Chen Xitong, 157 Chengdu (city), 5, 14, 28, 79–84, 86 China Youth Daily, 158 Chinese New Year, 15, 70, 72, 105–106, 164 Chinese people’s political consultative conference/CPPCC, 16, 80, 130, 155 Chongqing (city), 83–85 Chongwen district, 130 Chongwenmen, 5 Chongwenmen Street, 128 Christopher Columbus, 29 civil society, 150, 180 clan, 22, 30, 66, 72–73, 77, 95–97 clean-up/s, 2, 9, 22, 24, 75–78, 144, 154, 159–168, 170, 174–175, 179; see also crackdown, evasion, rectiﬁcation, run(ning) away and expansion, 9 co-operatives, 32–37, 52, 68 collective action, 2; see also strike/s collective enterprises, 32, 49, 52, 119n.4 collective investment ( jizi ), 111; see also Jingwen Clothing Wholesale Centre collectivisation, 30n.1, 31 Commonwealth of Independent States, 62, see also Soviet commune and brigade enterprises, 34, 52 ‘supply and marketing army/persons’, 33–35 commune, 30, 32–34, 172 Donglian, 33

compounds, xi, xii, 7, 9, 13–15, 23–24, 109, 120, 123, 134–144, 151–156, 159–170, 173–174, 177, 179; see also big players, clean-up/s comprehensive security oﬃce, 159n. 4 consignment selling, 17–18, 21–22, 53–57, 82, 84, 90–91, 107, 110, 132 crackdown, 15, 22, 44, 144, 158–159, 162, 174–175 cross-border trade, 62–63, 66, 68, 82 Cultural Revolution, 17, 20–21, 29–33, 35, 44, 58, 67, 77, 79 Dahongmen Clothing Centre, 171, 175 Dahongmen Road, 111–112, 115, 123, 129, 162, 167 Dahongmen South Road, 115 Dajing (township), 58, 83 Datong (city), 139 Daxing (county), 77, 174 Deng village, 39, 71, 75, 90, 134–135, 137 Deng Xiaoping, 23, 111 detention centre, 77, 134 Dongluoyuan (village) 134 Dragon Boat Parade, 96, 146 Dunhuang (city), 30, 33 Eastern Europe, 62 Erenhot (city), 65, 67, 82 evasion (taobi), 43–45, 76, 130, 149–150; see also run(ning) away ‘face’ (mianzi ), 71, 73–75, 82, 84, 91, 106, 134, 153, 167; see also big players Fei Xiaotong, 10, 12 female, see woman/women Fengtai district government, 90, 116–119, 121, 130, 144, 155–157, 161–162, 167 ‘ﬂoating population’, xvii, 1, 156 formal retailing sector, 21, 55, 58, 104–111; see also state enterprises, private retailing centres free market, xvi Fuling (city), 80 Furong (township), 29, 38–39, 135, 137, 171 gangs, x, xii, 23, 68–73, 94, 133, 138–143, 153 Gansu (province), 30, 33, 38, 58 Gaoyang (county), 86

index Gaozhuang (village), 90, 120, 167–168 Gezhouba (city), 33 globalisation, xiv, xvi, 20 governance, system of, 172, 180 Great Hall of the People, 115 Great Leap Forward, 34 Guangcai Stadium, 163 Guangdong (province), 48, 86, 107, 110, 172n.1, 173 Guangming Daily, 148 guanxi, 4, 10, 13–16, 78, 123, 126–128 perspective, xiv–xv, 4, 13, 15–16, 19–20; see also xi Guoyuan (village), 129, 168 Haihuisi Guesthouse, 64, 129 Haihuisi (village), 9, 39, 41, 76, 129, 134–135, 159, 163 Haihutun (village), 75 Haihutun Road, 38 Hangzhou (city), 116 Harbin (city), 128 Hebei (province), 2, 9, 15, 47–48, 63, 68, 76–77, 86, 90, 107, 110, 131, 164–166 Heihe (city), 66 Heilongjiang (province), 52, 65, 128 Henan (province), 68, 86 Henancun, 5 Heshenqiao (village), 32 Hong Kong, 42, 48, 83, 86 Hongqiao (township), 32, 38–40, 58, 70–72, 87, 120, 137, 139, 141, 145, 153 Hou village, 39, 89 household contract system of land, x Haidian district, 5 Huangqiao (village), 76 Hubei (province), 79, 87, 89 hui, see ﬁnance societies hukou (household registration system), ix, x–xii, xvii Hunan (province), 172n.1 Hungary, 65 India, xiii, xvi, xvii Inner Mongolia, 36–37, 65 Jiangsu (province), 86, 110 Jiangxi (province), 34, 52, 87 Jilin (province), 84 Jingmen (city), 33 Jingwen Clothing Wholesale Centre/Jingwen Market, 23,

195

110–114, 116–119, 123, 125, 135, 141, 144–150, 152, 157, 161–162, 166, 169, 174 Jingwen Market concern group, 24, 27, 145–151 Jiujingzhuang (village), 9, 139, 151, 154–155, 170 Jiuquan (city), 33 Kammas, xiii Keqiao (town), 22, 86–87, 94, 107 Kunming (city), 5 labour, xiv–xvi, xvii, xviii, 2, 17n.3, 22, 37, 40, 79, 85, 167, 177, 179 agencies, xv, 87–90 agents (gangers), 87n.2, 88–89 chain, 40 disputes, 88, 90 market, 26, 40, 87, 89, 173 relations, xvii labour bureau, 60, 113, 156 Lanzhou (city), 5, 38–39, 139 letter of introduction, 34–37, 49 Lewin, 177 Li county, 77 Li Peng, 1n.1, 159, 165 Li Qiyan, 165 Li Zongling, 146 Liaoning (province), 69, 81 liaison oﬃce, 111n.2, 118, 176 Wenzhou (to Beijing), 111, 160 Yueqing (to Beijing), 24, 27, 115, 118–121, 130, 146, 155, 160–162, 164, 173 Zhejiang (to Beijing), 158, 163–164 licence, 49, 51–53, 88n.2, 105, 156 Lingdi (township), 141n.3 Liusha (town), 86 Liushi (town), 63n.2, 77 local government, 33, 44, 59, 60, 86, 113, 116, 119, 135, 151, 154, 174, 176 Beijing, 23, 78, 112, 117, 121–122, 130, 141, 156–157, 161, 170, 174–175, 180 Wenzhou, 117–118, 121, 159n.4, 160–161, 174 Ma village, 39, 71, 122–123, 134–135, 138–139, 142, 151, 166–167, 169 Malinowski, 10–11 Manzhouli (city), 65–66

196

index

Marketplace developments (various), 2, 13, 18, 20, 23–24, 28, 87, 110, 123–134, 139, 140, 142–155, 161–163, 169, 174, 177 Mecca, xiii Mid-Autumn Festival, 154 migration, ix–xi, xii–xiii, 1, 20–21, 29–36, 39, 43–44, 79–80, 90, 156, 176, 180; see also out-migration chains, 22, 38–40, 57, 58n.2, 59 diﬀusion, 79–82 internal and international, linking, xiv mass, 58n.2 state-organised, 36 step-up, 79 trail, 25, 29, 79 modern market system, 4, see also free market Mongolia/n, 62, 64–65 Mou Qizhong, 67 Muxiyuan, 39, 90 Muxiyuan Light Industrial Wholesale Market, 86, 110, 112, 114, 119, 131–132, 145 Nanding village, 168 Nanyuan Road, 111 Nanyuan township government, 7, 60, 77, 171 National Day, 75 neican (internal report), 158, 159n.4 out-migration, 22, 29, 31, 44, 76, 78, 80, 95 Panjin (city), 81 party committee Beijing, 159 Fengtai district, 125 temporary, 118 Wenzhou, 165, 174 Yueqing, 118, 121 party secretary, 125, 137, 146, 149, 168 Pearl River Delta, x, 173 peasant/s, 1, 10–11, 29–30, 38, 151, 176; see also rural as legal status, 7, 151 ‘peasant workers’, x pedlars’ market, 62, 68, 110–111 Baihua Market, 62 Dongwuyuan Market, 131 Ganjiakou Market, 131

Hehuachi Wholesale Market, 86 Quanyechang Market, 62 Pengzhou (city), 82 People’s Bank of China, 113n.3 People’s Central Radio, 148 people’s congress, 115, 125, 154 Pieke, ix, 13n.2, 114, 178 Polanyi, 17 Poles, 62 police station, 113, 134, 145, 153 Dahongmen, 75, 115, 122, 150, 153–154 politburo, 157 ‘political typhoons’, 75, 160 private retail centres, 21, 49, 107–108, 110 production brigades, 30n.1, 32 public security bureau/PSB, 113, 141, 154, 157, 174 Beijing municipal, 163–164 Fengtai district, 22, 75, 118, 121, 126, 141n.3, 150, 154, 156 Pudong, 107 Qianjiayang (village), 32, 58 Qiansanfang (village), 30, 58, 97 Qinghai (province), 52–53 Qinghe (town), 77 Qingjiang (township), 58n.2, 120, 142 qunzhong ziwo zuzhi (self-organised popular organisation), 146 real estate, 108, 123, 169 rectiﬁcation, 157, 160–163, 173–174 ‘reform and opening’, 21, 29 Reform, x–xi, xvi, 30–31, 33, 43, 79, 119n.4, 172 post-, x, 21, 46 pre-, 172–173 reform in state sector ‘bringing the factories into the shops’ ( yinchangjindian), 47, 49, 106 contract out, 49, 127 joint operation (lianying), 46–49, 51, 106 laid-oﬀ workers, 110, 169, 170 leasing out (counter space) (chuzu), 9, 21, 23, 46–53, 56, 62–63, 69, 90, 106–110 ‘run collectively under nationalised ownership’ (quanmin suoyou, jiti jingying), 46 regulatory system, 76, 172–173, 180; see also administrative system

index relationship cluster, xv, 5, 16, 76; see also xi residents committees, 7, 148, 180 Ritan Hotel, 68 roadside stall, 21, 38, 42–43, 46–47, 53, 115 Robert Park, 10 Romanian, 62 run(ning) away, 9, 19, 22, 44, 75, 78 rural, x, xii, 2–3, 7, 29, 73, 79, 145, 151n.2, 173, 179, 180–181 and urban, ix, xi, 7, 36; see also hukou Russian, 18, 62–64, 66–68, 74 self-management, 152, 158; see also civil society, state and Zhejiangcun self-regulation, 24, 144, 151, 164, 180; see also civil society, state and Zhejiangcun sell on consignment, see consignment selling Shandong (province), 128, 131 Shanggutou (village), 29, 36–37 Shanghai, 30, 34, 44, 83, 107, 110 Shantou (city), 86 Shanxi (province), 52 Shaoxing (county), 5, 22, 86 Shenyang (city), 69–70, 81 Shijiazhuang (city), 5, 79, 84–85, 139–140 Shijingshan district, 5 Shiliuzhang (village), 75 Shishi (city), 42, 158 Sichuan (province), 14, 79–80, 82, 172n.1 Solinger, 114 South Africans, 62 ‘South Trip Speech’, 23; see also Deng Xiaoping Soviet, xiv, 62, 66; see also Eastern Europe, cross-border trade Spring Festival, 29, 36, 39, 71, 81, 83, 87–89, 92, 94, 96–97, 154; see also Chinese New Year state, xi, xii, xv–xvi, 1, 3–5, 7, 20–21, 30–32, 37, 43–44, 62, 76, 135, 148, 162, 172–173, 175–176 and society, xii, 2–4, 144, 179–180; see also civil society and Zhejiangcun, 24, 26, 76, 106, 144, 148–149, 170, 172, 175, 178; see also evasion, Jingwen Market

197

concern group, run(ning) away, strike/s state council, xi, 156, 159, 162, 165–166, 174 state enterprises (various), 9, 21, 37, 44, 48, 51–52, 56, 65, 95, 104, 106–110, 129n.2, 148, 152, 169 state ministry of public security, 122 street committee, 7, 156 Yangqiao, 7, 9, 170 Dahongmen, 7, 157, 162 strike/s, 24, 114–115, 122, 145 Suifenhe (city), 66 suzhi (quality of person), 3–4 Taishun (county), 89 Taiwan, 42, 80 Taiyuan (city), 5, 139 temporary residence permit, 59, 75 ‘three years of natural disaster’, 34 Tian’anmen Square, 1, 43, 115 Tianjin (city), 83, 94, 122, 126n.1 Tomb Sweeping Festival, 96 Tong county, 90 township and village enterprises/ TVE, 40, 48, 87, 107, 151n.2, 168; see also commune and brigade enterprises Uygur, xiii, 140; see also Xinjiang value added tax/VAT, 50, 107 village committees (various), 7, 119, 123, 126n.1, 129, 134, 151, 154–155, 161, 168, 170 Wang Chunguang, 30 Wang Mingming, 10 Wangfujing, 41, 56–57, 61, 110, 179 Wank, 114 Wanxian (city), 79 Werbner, 178 Wenzhoujie, 5, 79 workers/employees, 1n.1, 9, 34, 40, 45–47, 52, 57–60, 65, 87–89, 109–110, 179; see also labour, woman/women woman/women, xv, xvii, 16n.3, 38, 40, 57, 74, 87, 89, 91–93, 96, 110, 141n.3, 146, 166 female, 110 shop assistants, 110 ‘go-between’, 91–92, 135; see also ﬁnance societies

198

index

household roles (various), 31, 35–38, 40–43, 48, 54–55, 58, 81, 86, 92, 110, 145 Wong, 178 work unit, 7, 59, 113, 129, 146n.1, 173 Wu Wenzao, 10 Wuhai (city), 36–37 Wuniu (town), 30, 34, 95, 97 Wuyi (county), 89 Whyte, 11 xi, 5, 10, 16–24, 27, 73, 77, 85, 123, 126, 176–177 business circle (shengyiquan), 16n.3, 17–19, 21, 23, 54, 66, 68, 90, 109, 131–132 circle of family and friends/circle of friends and relatives/circle of friends and kin/social circles (qinyouquan), 2, 16, 17–19, 21–23, 29, 52, 54, 63–64, 68–70, 73, 84, 89, 125, 126n.1, 176 core xi, 17, 84–85 ‘lock down’, 18–19, 69 overlapping (between circles), 17, 19, 109 overlapping (between xi ), 19, 20, 176–177 xin Zhejiangcun (New Zhejiangcun), 167 Xi’an (city), 82, 139–140

Xiamen (city), 156 Xiang Biao, xviii, 55, 150, 163, 173 Xiannongtan Stadium, 42 Xidan, 41, 48–49, 56, 61–62, 64 Xinjiang, xiii, 5, 140 Xinjiangcun, 5, 140 Xiyang (village), 34, 95 Yabao Road, 68 Yanjiao, 15, 166–168 Yanjiao township government, 165–166, 170 Yichang (city), 79 Yongjia (county), 9, 28, 30, 32, 34, 57–59, 93–95, 112, 121, 138–139, 166, 170, 177, 179 Yueqing (county), 9, 28–29, 32–33, 38, 44, 52, 57–59, 61, 68, 72, 76, 80, 82–83, 86–90, 93–94, 111n.1, 112, 118–119, 121, 125, 129–130, 135, 139, 141n.3, 179 Yueqing government, 29, 118–120, 156, 158, 164 Yunnan (province), 86 Zhang Baifa, 155 Zhejiang provincial court, 116 Zhejiang provincial government, 158, 164, 173–174 Zhengzhou (city), 86 Zhongwei (city), 38

CHINA STUDIES ISSN 1570–1344 1. Berg, D. Carnival in China. A Reading of the Xingshi Yinyuan Zhuan. 2002. ISBN 90 04 12426 8 2. Hockx, M. Questions of Style. Literary Societies and Literary Journals in Modern China, 1911-1937. 2003. ISBN 90 04 12915 4 3. Seiwert, H. Popular Religious Movements and Heterodox Sects in Chinese History. 2003. ISBN 90 04 13146 9 4. Heberer, T. Private Entrepreneurs in China and Vietnam. Social and Political Functioning of Strategic Groups. 2003. ISBN 90 04 12857 3 5. Xiang, B. Transcending Boundaries. Zhejiangcun: the Story of a Migrant Village in Beijing. 2005. ISBN 90 04 14201 0 6. Huang, N. Women, War, Domesticity. Shanghai Literature and Popular Culture of the 1940s. 2005. ISBN 90 04 14242 6

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