Two weeks ago, I spent an entire week in China. This is a country I have visited many times over the last three decades. I first went to Guangzhou in 1991 and saw first hand how oppressive the Chinese Government was. During that trip, I had to be escorted by a Chinese official at all times, and the only privacy I had was when I was at my hotel. My next trip two years later was to what was then a very rural Shenzen, which has been transformed from what once was an agricultural province to what it is today, the technology hub of southern China.
Over the years, I have seen China go from a highly controlled agricultural nation to one that has become an economic powerhouse. Its progressive shift in its political landscape has opened the doors for a broader sharing of the wealth. It has become a low-cost manufacturing behemoth and made it much freer for people to get around, explore the world and in many cases, buy cars, condos, and other goods that were out of reach for most Chinese citizens even 15 years ago.
Every time I am there, I marvel at the new buildings and complexes going up that make China look very modern. The building and growth during China’s economic boom are substantial. On the way to and from the new Beijing airport, I saw Tesla, Mercedes, and many high-end car dealerships along the main highways in Beijing. The complex I was working at had a KFC, Subway, and Baskin-Robbins on its property.
However, even though China is not as closed or oppressive as in its past, there is no question that this is still a Communist country, and technology has allowed China to actually track their citizens in great detail and even control how they buy and purchase products for everyday needs.
Just to get into China, when going through security, I was fingerprinted three times, had my picture taken two times, and had to be clear where I was staying and what I would be doing when in China.
However, one of the more interesting things I encountered since the last time I was there was the total shift to mobile payments. Thanks to mobile phones, China is becoming a cashless society. Everyone in just about every age group uses some form of mobile payment system to purchase anything they want. Credit cards can only be used at major hotels or high-end shops. They can also be used in Taxi’s, but these drivers will not accept cash anymore.
Twice, when I went into a convenience store near my hotel, I literally had to go and find a worker and show him Chinese Yuan’s and pointed to the single cash register they had, so he knew I wanted to pay cash for some small food items I wanted to purchase. The store had seven kiosks where people could scan their items and then use AliPay or purchase these items. These kiosks would not handle any type of credit card.
That is the Catch 22 for foreigners. If one wanted to use Alipay or WeChat Pay, one would need to set up an account with a Chinese bank. But Chinese banks, except in rare cases or unless a foreigner has established residence in China, will not allow foreigners to set up any type of bank account in China for any reason.
Trudy Rubin writing a syndicated editorial on this subject points out:
“The country’s astonishing 40-year leap into modernization created the illusion (until recently) that this ancient civilization was becoming more Western. But Beijing’s indifference to the impact of its cashless society on foreigners reminds us that a rising China is determined to do things its own way.”
Ms.Rubins’ article, linked above, is worth reading as her perspective on some of the troubling paradoxes of New China is spot on.
But her final comment in this article is worth highlighting:
“But one thing is certain: While China is connected to the world, the world will have little say in shaping its future system. And foreign visitors will have to figure out how to navigate in a cashless society where their credit cards don’t work.”