Why will China change the world?

Alex Lew, CFA
4 min readMay 16, 2021

(blinkist adaptation)

Blockchaining Chicken

In the Western imagination, we characterize China by crowded megacities like Shanghai, Beijing, and Shenzhen. Today, many young people move to China’s most prominent cities in search of work. Yet, 40 per cent of the population still lives in the countryside. China’s latest novel creation can be found in a remote village called Sanqiao. Here, in the impoverished mountainous region of Guizhou, you’ll discover GoGoChicken, the first blockchain chicken farm.

Enter the blockchain chicken farm. This company raises high-quality, free-range chickens. These birds sell at a premium price to wealthy diners in the coastal cities. But these consumers want a guarantee that the chickens they’re buying are the chickens that are advertised.

Each chicken is tracked and monitored from the moment it’s born until it reaches the table. A chicken’s data is compiled and stored using blockchain technology. This distributed record-keeping system makes it extremely difficult to falsify any information. So, you can scan a code and see its entire life on a special website when you buy a blockchain chicken. This way, you truly know what you’re about to eat.

Online learning is re-educating China

City dwellers have much better access to education than countryfolk. Only 10 per cent of rural residents continue education after high school. In some regions, the high school dropout rate is above 50 per cent. To remedy this, China has turned to online learning.

In 2015, an elite urban high school, called Number 7 High School, began live-streaming classes for students in rural areas in Yunnan and Guangxi. Initially, the experiment was a failure. Poor internet infrastructure and family obligations kept rural students from really benefiting from the initiative. But, three years later, 88 of these students were accepted at Tsinghua and Peking Universities. It’s unclear if the program will work on a larger scale, but this small success is promising.

Piracy or innovation tweaking?

There’s some truth to this. In China, there’s a concept called shanzhai, which is a derogatory term for pirated goods. That’s because rural mountain villages have sometimes created whole economies around making imitation products, from pirated DVDs to fake designer handbags. Of course, these shanzhai economies only work by ignoring intellectual property rights.

While shanzhai can be about creating knockoff iPhones, it can also be something more. The idea that anyone can adapt and repurpose existing ideas for their ends actually opens a whole new field of innovation. That way, creative engineers can share ideas and remix products into an astounding array of new devices, even with few resources.

Just take a stroll through the Huaqiangbei electronics market, you’ll find hundreds of small-scale companies making everything from 3D printers to simple modular cell phones you can augment and repair on your own. This massive array of incredible shanzhai shows that China’s culture of swapping, sharing, and DIY manufacturing is a type of innovation all of its own.

China’s surveillance state has both practical and ethical problems.

In the popular imagination, China is an authoritarian state where the state closely tracks everyone. It’s true that the government monitors and restricts information in the media and on the internet. But China’s actual surveillance operation is less slick than you might think.

Consider a city like Guiyang. Authorities are attempting to catalogue all the residents into a massive database. But urban villages are populated by an ever-shifting community of rural migrants, so the task isn’t easy. Even after years of work, the spotty database includes only 60,000 people.

Companies like Face++ might offer a solution. This Beijing-based start-up makes facial recognition software for private companies and the Sharp Eyes program — a government initiative that aims to use surveillance cameras to monitor public spaces. Still, despite the hype, the program has stalled. Chinese cities still have fewer surveillance cameras than those in the US. And the software isn’t always as accurate as advertised.

Often, a camera’s facial scan can misidentify a person or fail to see a face at all. Even when data collection and surveillance efforts do work, there remains a host of ethical problems. For one, these programs generally target poor and minority communities. This excessive focus can create lopsided crime statistics that unjustly stigmatize these populations. And once the system has singled someone out, their negative data can follow them for life, even as they grow and change as a person.

Internet commerce ties remote villages to the global economy.

Shangdiping, a tiny village of 900 people in the mountainous Guizhou Province, was connected to the world only through a meandering footpath through the hills. That all changed in 2018 when a paved road was built.

Shangdiping, like many remote villages, is slowly changing. It’s now a patchwork mix of traditional and modern lifestyles. Farm animals still wander the streets, but there’s a flashy new internet cafe. The town’s single restaurant has no signage or set prices, but you can pay your bill with the smartphone app WeChat.

Many of these changes result from a nationwide effort to integrate China’s rural communities into the broader economy. At the heart of this effort is e-commerce.

Villages have been adapting to the internet economy. This change is fueled by the e-commerce giant Alibaba and its website Taobao.com, a major shopping platform. In 2013, the company launched the Rural Taobao strategy. It aimed to transform rural communities into hubs of online commerce. First, the company opened Rural Taobao Service Centers to help villagers buy goods from Taobao.com. Then, it sent officials to teach residents how to sell goods on the website.