How Li Luyuan became middle-class

The year in Shenzhen doesn’t start in January. It starts when the orders come in. Because so many consumer industries – toys, clothing, electronics – are tied to the Christmas shopping season, many of this southern Chinese manufacturing city’s factories close for the Chinese New Year, in January or February, and don’t reopen until they have the orders to justify it. For some factories, the break lasts only a few days. For others, it’s a month or more – a difficult time for workers, who return to the cities after the holiday well fed but cash poor. As US consumers check their bank balances nervously after the holiday season, so too do Chinese migrant workers: closed factories don’t pay wages.

In early March 2006, the Shenzhen Rishen Cashmere Textile factory was still closed. Yet one of its employees, Li Luyuan, had returned the week before from Jiangxi, where she spent the holiday watching television, hiking, setting off fireworks and praying at a local mountain-top temple. Her prayers were specific: she asked for more money.

Back in Shenzhen, Luyuan rose early one overcast morning, pulled on jeans and headed out of her factory dormitory block to buy vegetables for breakfast. When she returned to room 817, long and narrow and equipped with bunkbeds for a dozen girls, the lights were still off, and the few roommates back from holiday were sitting on their beds watching television.

Luyuan and Yuan Meng, her closest friend at Shenzhen Rishen, set about preparing breakfast. They covered the bathroom sink with a board and placed an electric rice cooker on top, pouring oil into it. As Meng watched the oil warm, Li Fang, Luyuan’s cousin, brought over chopped mushrooms flecked with green leaves. When the factory was open, the girls made a simple rice porridge for breakfast; today, they had time for something more elaborate. Luyuan stirred the mushrooms and leaves into the pot, added salt, tasted a mushroom. With the door to the room open, she could see a golf course spreading into the distance, the carpet of a wealthier person’s life.

When the dish was ready, Luyuan unplugged the cooker and moved the board from the sink to the centre of the room, where she placed it on top of a red, upturned bucket. As the girls huddled around the makeshift table, Luyuan broached a familiar topic: back home over the holidays, her family had introduced her to a man. He worked with his hands, decorating houses. Luyuan and her roommates all had classmates who had stayed in their home villages, married and had children. When the girls of room 817 returned home, their families arranged meetings with prospective husbands. Choose one, they were told.

At 20, Luyuan was getting too old still to be single in the countryside. In Shenzhen, she was considered too young for marriage. But Luyuan and Meng, who was 21, feared the responsibilities a husband would entail. They had enough to do at the factory. Even boyfriends were a burden. Give us a few years, they told their parents.

Later that morning, the girls headed out to look at a bulletin board which carried job advertisements. There were rumours that Shenzhen Rishen might be laying off staff or moving out of the city centre to cut costs.

The board was plastered with ads: ironing, quality control, cashier. Luyuan pulled out a notebook and wrote down details. She had spent every day since returning to Shenzhen looking for a new job, making the rounds of factories that were hiring. One made her take a mathematics test. She failed.

Another factory quizzed her in English: “How old are you?” she was asked. “What’s your name?” She failed that one, too.

When Luyuan arrived in Shenzhen to work two years earlier, she and her friends took the baton in a relay race that began in 18th-century Britain with the industrial revolution. They had edged out the women of Mexico’s maquiladoras and Hong Kong’s housing estates: they were the most affordable and productive workers the world had found, their value to the global supply chain evident in the tens of billions of dollars of foreign investment pouring into China every year. But between interviews, Luyuan was also looking for vacancies in retail. Toy and clothing stores had turned her down on the spot because of her lack of experience. As Meng explained: “The places that have good working conditions have pretty tough requirements.”

It wasn’t just market forces – higher prices for labour, electricity and land – that were forcing low-end jobs out of the city. The government was doing its part to make sure they left. Just as Luyuan dreamed of climbing out of labour-intensive manufacturing, so too did government officials in Shenzhen – a fishing village in 1980 and the world’s fourth-largest port today – and other cities of the Pearl River Delta. These factory towns were trying to refashion themselves into high-tech, low-pollution, value-added modern metropolises. Along the way, they were pushing out the kinds of jobs on which Luyuan and her friends still depended – and for which they were qualified.

Back at the dormitory later that morning, Luyuan spun a hula hoop around her waist. Of the jobs she jotted down at the bulletin board, a cashier position looked like her best shot. All it required was a junior high-school education, a good temper and an outgoing personality. Luyuan felt she had even more to offer. “To become a salesperson,” she announced, “you’ve got to learn the psychology of the customer.” Good salespeople are eloquent and crafty. They know just what to say to persuade people to buy things.

Luyuan said she had read in a newspaper article that some university graduates don’t make good salespeople. “I don’t have a good education, but it doesn’t mean I can’t do the job,” she said. To prove it, she mimicked the tone of a saccharine saleslady. “Miss, what colour are you looking for?” she asked an imaginary shopper.

“What colour do you like?”

“If you like it, I’ll sell it to you.”

“You look good in that shirt.”

“Why don’t you take it?”

“It’s so unfair!” she wailed. “Nobody will give me the chance to sell tiny things, let alone cars or real estate.” Her roommates sat and listened. Their ambitions were more modest. Meng, for one, just wanted a higher salary.

That afternoon, the girls set out from the dorm towards their factory. The neighbourhood was changing at “Shenzhen speed”, a phrase the rest of China uses in admiring reference to the city’s breakneck pace of growth. They passed a basketball court that had recently opened. At night, healthy, muscular men – nothing like the reedy, pale-faced boys who worked in the factories – played aggressive games under bright stadium lights. A newly installed Papa John’s pizzeria (“Better Ingredients. Better Pizza”) stood out from its industrial surroundings like a Michelin-starred restaurant.

Luyuan ducked into a bookshop with a help-wanted sign, but the job required a high-school education. The girls moved on to a glass-fronted Hunanese restaurant in the final stages of preparation before opening. The sign hanging out front, “Urgently Seeking Employees”, looked promising.

Food and accommodation provided, it read. Salary to be discussed in person.

Inside, a woman asked if the girls had waitressing experience. They said they worked in a factory. Working here is harder than in a factory, the woman snapped. The girls kept their mouths shut. Another manager laid down the terms of employment: the regular working day was nine hours, with overtime every day. The monthly wage was $66. All employees were required to pay a $26 deposit for the uniform.

The girls were unimpressed. It wasn’t clear how many days off they would get every month. And nobody would tell them how many hours of overtime they would be working or whether they would get the $26 deposit for the uniform back. At least in the factory, where they worked 18-hour days, they knew what to expect.

Down the road stood a real-estate agency, a glass-fronted cubbyhole dominated by a row of computer terminals. A help-wanted sign hung out front.

Luyuan marched in and sat down opposite a manager. They spoke in hushed tones. A few minutes later, she was back on the street.

Only this time, she was smiling. She had an offer.

Luyuan repeated what the manager had told her. For the first month, she would work on probation: the agency would pay her the paltry wage of $39, not including food or accommodation. The next month, if she rented or sold $395 worth of real estate, her wage would rise to $79. Shift properties worth $1,316 and she could take home $132. Sell nothing for a month and she would be fired.

Even if she moved into the cheapest, dirtiest room in the red-light district across the highway, Luyuan would spend all of her first month’s salary on rent. And that was before she spent her first yuan on food. But to a girl desperate for freedom, hunger was better than another year in a factory. “I’m really happy,” she said. “I’ve got my confidence back.”

. . .

Selling real estate turned out to be a lot harder than sewing sweaters. As Shenzhen property prices rose – by 30 per cent in 2006 – real-estate agencies opened thousands of branches around the city. In every district, agents stood on corners, squinting in the south China sun, distributing flyers of available properties. Three agencies occupied Luyuan’s block alone, each with its own army of commissioned youth.

Luyuan’s new colleagues didn’t talk much, but she felt sure they would all become friends. They sat in the agency’s tiny office reading the newspaper, waiting for customers and wishing the phone would ring. When it did, the first person to pick it up got the business.

Alternately brutally competitive and boring, the job nonetheless thrilled Luyuan. Work that allowed you to sit and read the paper hardly seemed like work at all. She marvelled at how quickly her life changed. “At the factory, our social circle is limited and we don’t communicate with anyone other than the people we live with,” she said. Life was confined to the narrow, colourless strip between factory and dormitory. Now, her customers came from a mixture of backgrounds and income levels. And her days were no longer measured by the number of sweaters she sewed. “I like the freedom and the lack of restrictions,” she said.

But over the next months, the reality of life outside the relative safety of the factories sank in. Luyuan’s new apartment was across the highway from room 817, down a dark, pungent alley in the red-light district. She shared a dirty common area with the residents of six other rooms. The grease-stained communal kitchen and bathroom with metered tap water disgusted her. The cardboard walls were so thin she could hear everything her neighbours said, every television programme they watched. Her room was dominated by a rickety bunkbed. For this, she paid $39 a month, her entire first month’s salary.

Luyuan was living on fumes. She had launched her new career with a $132 nest egg from working at the factory and $158 in unpaid wages. In mid-May she wired her parents $66 because they needed the money. She cut her own budget to a minimum, spending just 79 cents a day on food: 13 cents for a bun for breakfast, 40 cents for lunch and 26 cents for dinner. In a city where a cup of coffee can run to $3.29 and a trip to the grocery store at least as much, this was a financial high-wire act.

She spent her days walking the streets, looking at properties, familiarising herself with the area. She grabbed meagre meals when she had a free moment. But Luyuan felt liberated from the rigid and demanding schedule of industry. She was less tired at the end of the day. And for the first time, she had a business card, which she kept perched on top of her tiny terminal at the real-estate agency.

Little of her old life remained. After Shenzhen Rishen reopened, the girls moved out of room 817 into an older dormitory a half-hour walk away from Luyuan’s apartment. Luyuan finished work earlier than her former colleagues at the factory. She saw them less and less. Meng quit and found work at a factory outside the city centre. She rarely came into town.

Luyuan was unaccustomed to having her evenings free and was uncertain what to do with them. After work, she made a modest dinner at home and whiled away hours in the book section of a grubby local department store reading books she couldn’t afford to buy. She read up on poverty alleviation in rural areas and child psychology.

. . .

In June, a man from one of the real-estate agencies across the road called Luyuan on her mobile phone. Could she come over and see him? She could. He had seen how she worked with clients and liked the way she closed deals quickly, he said. He offered her a job with a starting salary of $132 a month. Stunned, Luyuan accepted.

Gemdale Corporation, her new employer, was a large, Shenzhen-based real-estate developer that also managed and sold properties. Listed on the Shanghai stock exchange, it had subsidiaries around the country. The office where Luyuan worked was staffed by a crew of jovial young men in white dress shirts and dark trousers. On the wall, a sign in English next to a picture of I.M. Pei’s glass pyramid at the Louvre read: “YOUR APPRECIATION IS THE BEST MEDAL.”

Two weeks into her new job, Luyuan’s boss gave her a sweltering Sunday morning off. She called her old factory colleagues to check that they weren’t working and set off to their new dormitory. As she walked, Luyuan giddily ticked off the terms of her new job. For every $592 in sales she brought in, she took home $53 in commission. She was earning $132 a month now, but she expected that would rise as high as $236, higher than her $197 peak-season wage at the factory. She had raised her daily food budget to $1.31, half of which went on lunch with her colleagues, whom she adored. She was looking forward to moving into a nicer apartment.

When Luyuan arrived around 11am, the girls were still in their pyjamas. They were in sombre mood. There were hardly any orders at the factory, which meant salaries were low. There would be no party for Yuying’s birthday the following week. “I don’t have any money for food, much less to celebrate my birthday,” she said gloomily, having climbed down drowsily from her bed. Working overtime, within limits, was better than not being paid at all, she said. More of their colleagues at Shenzhen Rishen were quitting.

Luyuan belonged to another world now, where people wore suits, sat behind computers and talked about mortgages and speculators. “I think she’s the most talented of all of us,” said one girl of Luyuan. “I think she’s the smartest.”

After Luyuan said her goodbyes, she walked over to the noodle shop where she and her colleagues often ate. A month ago, she wouldn’t have been able to afford a meal here. Now Luyuan was thinking about buying an apartment in Shenzhen. And yet some things hadn’t changed. Luyuan continued to resist anything that would tie her down. A colleague from her new company had asked her out on a date, but she told him she wasn’t interested. We’re so busy at work, she said, and after work, I’m too tired for a boyfriend. Can’t we just be friends? Don’t make up your mind so quickly, he told her. Take some time to decide. She told him she was already sure. The answer was no.

. . .

Six months later, Luyuan paced the balcony of her new apartment, talking into her mobile phone. She spoke in the sharp tones of standard Mandarin.

Working with customers and colleagues from around the country meant Luyuan was losing her Jiangxi accent.

It was a sunny Saturday afternoon, and she wore a navy blue suit, having been at work that morning. Her hair hung in a stylish cut just below her shoulders. She had started wearing eye shadow and colouring in her eyebrows with quick, impatient strokes. She carried a yellow imitation Marc Jacobs purse.

In the autumn, Luyuan had moved in with her manager and his girlfriend. They shared a two-bedroom apartment above a hair salon. The flat was sparsely furnished but immaculate, with a white tile floor, a modern green couch, a glass coffee table and a giant Sanyo television placed on top of an office desk.

Luyuan’s room was narrow but could easily fit a single bed, her first non-bunk-bed since she moved to Shenzhen. Her clothes, including a track suit, hung along the wall. She had started jogging after work – and sometimes drinking red wine.

The real-estate market remained lively, despite attempts by Beijing to temper its growth. Luyuan’s favourite clients were the speculators who would buy a property only to flip it shortly afterwards. Her agency made a commission on both transactions.

She enjoyed the competitive nature of the job. If she and her colleagues didn’t have the property a client was looking for, they would call other agencies, pretending to be buyers to get the telephone number of a property owner. Then they would then call the owner directly to arrange the sale to their client. Tactics like that helped Luyuan earn $790 in December, a wage beyond the imagination of anyone in her family. Most months, however, she earned closer to $263. If she sold nothing, she took home only $184. And it was understood that if a slow patch continued for a couple of months, she would be fired. She accepted the pressure as part of the job.

And yet she was thinking about changing jobs. Some former colleagues had set up a company to print business cards, and Luyuan was considering joining them.

Sitting on the couch, Luyuan flicked through her photo album and found a picture of herself from a couple of years earlier. She was leaning on a new white car parked on a street. “I thought I was such a grown-up,” the 21-year-old said, looking at the picture.

. . .

On the first day of the western new year 2007, residents of Shenzhen pile into Lotus Mountain park, filing up the steps that wind around the hill. In the square at the top, they hold the cameras in their mobile phones up to the statue of the man who put Shenzhen on the map: former Chinese leader Deng Xiaoping.

Deng set the wheels of Chinese economic reform in motion in 1978. His trip to Guangdong province in 1992, known as the Southern Tour, confirmed Shenzhen as China’s original experimental city – a “special economic zone” focused on attracting foreign capital and functioning according to market forces.

The girls of room 817 had planned a reunion for January 1, but most couldn’t attend. Only Luyuan, her little sister Lujin, a suitor, Little Zhao, and her best friend Meng joined the pilgrimage to the top of Lotus Mountain. Meng had three days off from the computer cable factory where she had been working in Longhua, an industrial suburb. Lujin, 18, had the day off from the nearby electronics factory where she had started work the previous year.

Little Zhao was a former colleague of Luyuan’s who was starting the business card company. He was shy and soft-spoken, with a pencil-thin moustache, a too-big black suit and pointy black shoes. That morning, he had presented Luyuan with a huge bouquet of roses and other flowers wrapped in pink paper and a giant purple bow. Luyuan was embarrassed by the gift but otherwise unmoved.

“China has too many people!” Luyuan exclaimed at the park. Crowds covered the hillside. The country should improve its population control policies, announced the illegally born third child of Jiangxi farmers. And she was just getting warmed up. China was full of contradictions, she said, starting with the growing gap between rich and poor. The government should change the tax regime so “the rich pay taxes but the poor don’t have to”. It should educate poor farmers in the countryside on better agricultural techniques. On her path from factory worker to real-estate agent, Luyuan had started spouting common refrains from the state-controlled newspaper. Maybe she had always thought this way but hadn’t talked about it. Maybe her chats with her colleagues had informed her thinking. None of her arguments was remotely controversial in China: the insistence on population control was a common government refrain, the plight of the rural poor a special focus of Chinese leaders. Luyuan’s ideas were squarely in line with government thinking. They were also the intellectual underpinnings of a middle-class Chinese woman in the making.

At the top of the hill, the group elbowed their way into a spot in front of the statue and posed for pictures. Around them, men balanced babies on their shoulders, children skipped, and musicians played.

In the photos, Meng, Lujin and Zhao flank Luyuan. She stands smiling at the feet of Deng Xiaoping. She has arrived.

Alexandra Harney’s book, ‘The China Price: The True Cost of Chinese Competitive Advantage’, was published in the US by Penguin Press last month.