E-payment and the sharing economy? Chinese can’t live without ’em now
Text and Photos Zigor Aldama
In Dongguan, the mafia has been dethroned by smartphones. Prostitutes and drugs once characterised the lawless city of 10 million in China’s Guangdong province. Yet today, a stroll down any of the chaotic streets reveals a different picture: Here and there, industrial warehouses, hardly distinguishable from one another, host sizeable armies of young workers.
Thanks to a strategy based on mass raids and exemplary punishments by the police and the army, the city is now among a slew of towns in southeast China housing the country’s massive technology sector. These manufacturing-centric cities have a few things in common: plenty of labour, good-quality infrastructure, and a stable and investment-encouraging political climate.
Where gangs once ruled, now industrial activity powers Dongguan’s economy. It’s a powerful magnet that attracts youth from across the nation, and all of them wear the same uniform: antistatic blue gowns, plastic booties, and latex thimbles on their fingers. The only difference is in the company’s logo printed across the chest.
The OPPO factory occupies one of the largest buildings in town, hidden behind a maze of alleyways lined by small family businesses and grimy workshops for the electric bikes its employees use to commute. Inside, the fourth-largest mobile phone manufacturer in the world boasts surprising cleanliness and the latest machinery. To some extent, it is the antithesis of the image attributed to a Chinese factory.
Here, over 6,000 workers maintain the facility at full capacity 24 hours a day, 365 days a year. Most are rural migrants seeking the “Chinese Dream” – this era’s equivalent of the American one. Although the work is strenuous, the average wage in this city is the sixth highest in the country. The 5,868 yuan (about USD900) a month a Dongguan worker earns is equivalent to a Chinese farmer’s annual salary.
Even sending home a portion of the 1,510 yuan (about USD230) minimum wage is enough to help workers’ families in their home villages lead better lives. “I intend to work here four or five years, do a lot of overtime, and return home to start a small business with whatever I can save,” says Zhang Yi, a 19-year-old working in quality control, who claims to save about 1,200 yuan (about USD180) a month. “It’s a boring and tiring task, but we are treated well.”
People like Zhang are fuelling China’s next great leap forward, because the smartphones they produce are at the heart of a new tech era. “China has democratised technology, because the lower prices of Chinese devices have made them available to everyone – not only in China, but also in the rest of the world,” says Li Nan, vice president at Meizu, the world’s 11th-largest mobile phone manufacturer. Zeng Xuezhong, the former vice president of telecommunications equipment manufacturer ZTE, adds that the impending deployment of 5G networks in 2019 will be China’s chance to lead world tech.
“The phone will be the remote control of our lives. And the Internet of Things will allow machines to communicate among themselves and with us through mobile devices, while artificial intelligence (AI) will make ordinary appliances smart. They will anticipate our needs,” says Wang Chuan, head of Mi Home, a smart home ecosystem technology produced by Xiaomi, a Chinese electronics manufacturer and the world’s seventh-largest smartphone maker.
China’s astounding mobile penetration has been instrumental in bringing it to the forefront of the Internet, albeit a very particular one: sealed to the outside world and heavily censored by the government. But these barriers haven’t prevented the spectacular development of electronic commerce and the creation of all kinds of mobile applications. On the contrary, they have encouraged it.
“The Chinese market has stopped copying and has begun to innovate because it has to respond to its particular needs,” says co-founder of Yahoo!, Jerry Yang. Yang was one of the first people to invest in Alibaba in 2005, giving Yahoo! a 40-percent stake in the e-commerce giant. “Everything goes faster in China than in the rest of the world. And that, coupled with the size of its market, makes the technology sector an element of social transformation. It is likely that the next Internet genius will be Chinese.”
Mobile payments are one of the fields where China is already way ahead of the rest of the world. They are ubiquitous and extremely easy to use. Both Alipay and WeChat Pay – from rivals Alibaba and Tencent respectively – use QR codes to confirm transactions. Either the client scans the code from the vendor, or the seller scans the code created by the app on the client’s screen. Money comes directly from a bank account linked to the user’s profile or is deducted from an online wallet. Most transactions are free, with verification via password, fingerprint or face recognition.
Popular international payment apps, like Apple Pay or Samsung Pay, are seldom used. They arrived late in the market, and – though the government hasn’t imposed restrictions on their operation – have found themselves unable to adapt to users’ preferences. Everything is typically paid for with Alipay and WeChat Pay, which make up 94 percent of market share. School and hospital fees, taxes, and bills can be paid via app. Last year, it was even reported that beggars were paid by businesses to harvest user IDs for advertising by enticing passersby to scan QR codes.
Hu Yuan is one of the millions of Chinese youngsters who have found new opportunities in cyberspace. She got her first smartphone in 2012, graduated with a degree in economics in 2013, and started her own business on Taobao, Alibaba’s C2C platform, in 2014, selling self-designed accessories on her online store. She now earns far more than her parents.
“I talk to suppliers and clients and contact the express delivery companies on WeChat and through Taobao’s chat app,” says the 26-year-old Jiangsu entrepreneur, who manages everything related to the business from her phone. “I can see all the data from the shop in the Taobao seller’s application, and all payments are done through Alipay and WeChat Pay. I have stopped using cash or bank cards. I even invested part of my money on Yu’eBao (Alibaba’s fund management service, which is currently the world’s biggest). Everything I do is online.”
The only downside is the battery life of her device. “I have to carry an extra battery in my bag at all times,” she says, laughing. “The rise of this new economy has made it much easier for us to start our own businesses. We don’t need to have a lot of money for a brick and mortar shop. I work and send all the items from home. And we can access a huge pool of customers across the country and even abroad. They benefit, because competition has reduced prices a lot.”
The volume of transactions made online in China is astonishing… This story is a feature in ASIAN Geographic. To read the full story, check out Issue 129.