China news 16th November 2020
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China news 16th November 2020

The golden decade of Chinese youth is over

I travelled from Hunan to Guangdong in 2000, exactly 20 years ago. 

After China’s reform and opening up beginning in 1978, the first people to create and obtain wealth were mainly from Hong Kong, Taiwan, Japan, and South Korea.  Those entrepreneurs invested and built factories, using cheap labour.  The stable Chinese workers produced surplus value and a lot of wealth – for the owners.

by Welkin Chen
by Welkin Chen

When I first arrived in Guangdong, my boss revealed to me the quality of each factory. He summed it up very concisely: “Singapore’s factories are the best, and everything is in accordance with the labour law; Japan is the second, not bad, and more disciplined to workers. The ones in South Korea and Hong Kong are okay if you follow the rules, try to behave as much as you can.   Everyone who does not follow the rules can bear it. Taiwan’s factories are relatively poor and use various tricks to bully the workers.”

In some factories, your ID card will be confiscated when you enter the factory.  You will be exhausted to work for a year, and you will not be paid or allowed to resign. This is called a ‘black factory’, where the security guards will even attack people. Helping ‘black’ factory owners to suppress workers still existed in the 1900’s to the early 2000’s, and then slowly disappeared.

According to my boss’s summary, most of the ‘black’ factories were locals. At that time, locals had just started doing business and had no money, so they had no choice but to start a ‘black’ factory.  Hong Kong and Taiwan people felt superior to the mainland people.  

The first purpose of Hong Kong and Taiwanese people coming to the mainland to open factories was to make money. They did not come here with the idea of saving the mainland people. They indeed made money.  They have also enjoyed the experience of being a master for about 30 years. 

Economic motives are just that.  Everyone just coexists in the system.  It is naive to believe you have an any moral superiority.  Just like today, when we (Chinese) go to Vietnam to invest or in Myanmar, we should not have any sense of moral superiority. If we make money, we will come back. We do not need to ask the Vietnamese and Burmese people to say ‘thank you for saving us.’

The Chinese market was prosperous from 2000 to 2010, and the people who made money were generally middle-aged people in their 30s and 40s.

These people started the early primitive accumulation of wealth.  For example, in Humen, Dongguan, many people made their first money by using sewing machines.  They then went to wholesale markets to buy stalls for wholesale. The business owner oversaw finances, and dozens of workers worked in secret in messy workshops.

Here again, some people made brands. At that time, branding was another form of wholesale. The traditional method was to register a brand, open two image stores and then sign a popular star as a spokesperson.  Then take a celebrity to the clothing exhibition for a walk and sign up many franchisees.  These franchisees became the cornerstones of the brand, and the brand makes money by doing a fair twice a year.

At that time, I oversaw the planning department in a company of this kind. One of my tasks was to take pictures of these spokespersons, and to see how many companies of this type failed.  Lamps and lanterns in the ancient town of Zhongshan, furniture in Houjie, Dongguan, furs in Haining, small commodities in Yiwu, these are all stories of making money belonging to this generation. 

There were also those who quietly engaged in smuggling or foreign trade in Huaqiangbei. This wealth belonged to those born in the 60s and 70s who still had to have a small bucket of capital to start a business.The most exciting decade has been from 2010 to 2020, which is the golden decade of entrepreneurship for young Chinese.

In 2010, I was 28 years old. I was very anxious and wanted to create a business.

by Sean Foley
by Sean Foley

At that time, I mainly travelled between Shenzhen and Guangzhou to learn how other people made their fortunes. I found that many young people had started from scratch and made a lot of money.Most young people started with a few hundred dollars that they had saved from their wages. Most of them were not well-educated and had no connections. When they started, they were doing things that others looked down upon: Kai Taobao store (E-Bay in China).

At that time, Taobao made wealth very fast.  Many people I saw were ordinary company employees, couriers, or security guards. They were all seemingly hopeless occupations.  Then suddenly they made money.

by Marcus Loke
by Marcus Loke

I met a young man in 2010, five years younger than me, on a salary of 3,000 yuan a month. When I met him three months later, he had opened a Taobao shop selling women’s clothing. There were a dozen people in the company.  With more than 30,000 sales, one million RMB can be sold in a month. After a year, his store had stable sales of 100,000 yuan a day.

There have been dozens of cases of this kind of sudden wealth in their early twenties. I asked them one by one.  They all became beneficiaries of the Taobao system.  If there were no Taobao, these young people will only have to go to work obediently and wait until they are about 40 years old to see if they make a fortune. 

China news 16th November 2020

Young people have never been so cool.

The Taobao market made easy money in the four years from 2009 to 2013. The growth of consumers exceeded the growth of businesses, and demand exceeded supply.  But after 2014, big names entered the market and it has become increasingly difficult. 

It is not only Taobao that changed the fate of young people, but also WeChat.

WeChat was founded in 2011, and it began to spread in 2013. I remember that the first time I posted was in the spring of 2013. At that time, WeChat had no limit on the number of friends. The most prolific person I saw had 100,000 friends in WeChat, all of them girls. The way he made money was very simple. He sent a message about selling facial masks to his circle of friends and waits to collect the money.

It doesn’t even use promotion fees, it’s even easier than making money on Taobao.

From 2013 to 2014, there were WeChat plug-ins everywhere on the market, which could help you locate nearby people, and then sell facial masks and skin care products. Many well-known Internet companies started from this step.  

by Markus Winkler
by Markus Winkler

The decade 2010-2020 has been a happy one with many ways for young people to make money.  Many are industries that can be entered without any cost. The threshold is extremely low. A mobile phone can cost 10,000 to 20,000 yuan for the start-up capital.   These ten years have been the golden ten years gifted to young people born in the 80s and 90s. This kind of opportunity may never occur again.

If you look back, you will find that these jobs are all in the Internet industry or derived branches.  Because the Internet is a new thing, many middle-aged and rich people don’t know that there is a market.  Old money makes money in traditional industries such as banks, pharmacies, hotels, and mining.  This gives young people the opportunity to break into emerging fields. 

If we look at history a little further, there is another amazing discovery. The Internet industry has provided China with many jobs and a wave of wealth creation has also emerged. But not every country has this opportunity.  In fact, Only China in the world has shared the main wealth of the Internet with the United States.

China will sell 1 to 2 million luxury cars a year.  Based on this calculation, at least 1 to 2 million families will enter the wealthy class every year.  A considerable proportion of this is brought about by the development of the Internet.

However, Europe and Japan, which have not caught up with the development of the Internet, have insufficient economic stamina and have been standing still.

Since 2016, the wealth-making opportunities of the Internet have also begun to shrink, giving newcomers less opportunities.  Now who wants to take tens of thousands of dollars from Taobao?  It is a dead end.  Almost every sub-category is densely packed with people. Everyone has to stand on tiptoes to prevent falling off the cliff.

by Florian Wehde
by Florian Wehde

China’s current top Internet giant bosses are almost all from prestigious schools. In-depth competition has begun to normalize.  The Taobao shop bosses I know are all in their 30s or 40s. Seeing that they are entering middle age, the Internet is no longer a battlefield for young people in their twenties.  As the Internet industry enters a mature period, the golden decade of young people who had been ups and downs is over.

Almost every emerging industry I see now is unlikely to start from scratch again, such as artificial intelligence and 5G, which require a lot of capital and contacts, and history may never reappear like our generation. No more business start-ups with twenty thousand RMB.

What about the young people today?

The bad news is that the road to entrepreneurship is getting narrower. The good news is that the working environment for young people is not the same as before.

It is not only the improvement of the labour law but also more comprehensive protection of workers. More importantly, the humanistic environment has changed. When we were born in the 1980s, when we worked for others, the bosses did not treat us as human beings.  Many bosses treated us as human beings but machines and livestock.

In 2008, I had a terrible boss in Humen.  We worked overtime for him for free until ten o’clock in the evening. He was neurotic.  As soon as he entered the office, he would scream at employees from the director to the cleaner one by one.  

Today what boss dares to do this?  

The entrepreneurial environment has deteriorated, but the working environment has improved. In fact, it is normal for a society to develop like this. It is impossible for everyone to start a business. Most people still go to work. This is what life should be.

But a great golden age, a miraculous age for the 80s-90s generation, has come to an end.


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