STEVE INSKEEP, HOST:
We have an effort now to gain perspective on one of the biggest news stories in the world - the rise of China and its competition with the United States. David Rennie just finished six years covering Beijing for The Economist. So we called him to ask what he's learned in this, his second tour there. In six years, China closed its economy and cracked down on society to contain the pandemic. That emergency has passed, but security measures and economic stagnation remain, affecting people who used to expect constant growth.
DAVID RENNIE: On many levels, China just works better. The high-speed trains, they go very fast. There are a lot of them. They're very impressive. Important things - like the air is a lot cleaner. The water is a lot cleaner. Kids are a lot taller than they used to be. You know, it is a richer, more prosperous country. And for an awful lot of Chinese, just those basic material needs are being met, you know. But actually, once you start talking to people about, how's business? - how do you feel about your own kind of kid's future? - actually, they're very anxious.
INSKEEP: The government has poured a lot of resources into trying to dominate industries of the future. I think of renewable energy. I think of cars. There's an unbelievable variety of Chinese-made cars, and we saw a lot of them in the spring when we were there. And now I'm wondering as you're talking, David Rennie, does that investment in new industries mean better jobs for people? Or somehow does it take away from things that would better affect their ordinary lives?
RENNIE: You put your finger on a very important trade-off for China's Communist Party leaders right now, which is - fundamentally, what they're trying to achieve at the moment is to move China as a whole up to the kind of - the absolute level of kind of domination of the key industries of the future. Solar panels, you know, China came into that industry. Prices have crashed, and so now China is utterly dominant. You know, more than 90% of the world's solar panels made in China. So as the world tries to go green, you're going to have to buy all of that kit from China. So that's the strategic vision.
But the other part of your question about, does that generate the jobs back home that Chinese people want? - that is the trade-off, which we're going to see playing out over the next few years. The economy is transitioning, and it's changing from the - kind of the factory of the world and all of those construction sites to something more high-tech, but that is not creating the jobs that you need to keep social stability going. And so that's a massive headache for the Chinese Communist leadership.
INSKEEP: How conscious are people of living in a country where the population has started to decline?
RENNIE: I was very struck by a statistic recently, which was that the number of children born last year was half the number of eight years earlier.
INSKEEP: Wow.
RENNIE: And so I set out thinking, how would you capture that? And I decided to look for a place which makes something that is sold to toddlers. And China has all these cities, like the city that makes all the socks in the world or the city that makes all the zippers in the world. It turns out there is a city in China that makes all the children's bikes in the world.
INSKEEP: Wow.
RENNIE: So I went to this city, found a company that used to make toddlers' tricycles and the very first little bicycles for two- and three-year-olds. And they said, this used to be the best business in the world because every year the kid gets bigger, they need a new bike. Their parents love their kids. They'll always - you know, they'll stint on lots of things before they stint on getting the kid the next bike. But there are half the number of kids that there used to be. And the kicker was at the end, I said, well, what are you doing? They said, come to our new factory. So we get in the car, drive to a village. Their new factory is making tricycles for old people.
INSKEEP: (Laughter).
RENNIE: Because there's plenty of those to go around.
INSKEEP: Well, you got to go where the market is.
RENNIE: Yeah.
INSKEEP: I want to ask another economic question. There was a period of - I don't know - 30 years or more, where to a lot of people in the world - a lot of Americans, in fact - China seemed like the gold rush, the place to go, the place to be, the place to make money. Is the gold rush over for the world?
RENNIE: The gold rush for foreign companies is certainly getting - you know, there's fewer nuggets than there used to be, and getting your money out is getting harder. So there used to be an idea that as a foreign company, you could enter the China market. And if, you know, 1.4 billion people - if they all decide to buy my product, we'll be - we'll live like kings. That was a massive feature of my first time in China in the 1990s. It was still something you would hear when I came back in 2018.
But right now the welcome for foreign companies is there if they have a very specific technology or investment that might help China today. But the confidence among those same foreign companies that they will still be welcome in five, 10 or 15 years' time, if China works out how to replace their investment and do it themselves, that confidence is gone. People are very unsure about the long term now.
INSKEEP: David Rennie of The Economist just finished six years in China. Transcript provided by NPR, Copyright NPR.
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