25. Innovation and Consumption

Photograph courtesy of Helene Minot

As the Chinese economy moves away from manufacturing and export, it is bound to slow, leading to predicted growth rates of 3-4 percent. If it is to keep up even this much momentum, it will need to shift toward new forms of commerce and business, toward technological innovation and creative solutions, as well as toward a massive increase in consumer spending.

Both are fraught with certain difficulties. While there is bound to be an increase in consumer spending as the next hundreds of millions of people move up into the middle, their incomes expected to rise by 15-20 percent annually, the Chinese traditionally have tended to be frugal and personal savings rates are high, 30 percent of income for those with full employment, up to 50 percent among migrant workers.

In today’s China, this is mainly due to the lack of a reliable social network. It has no unemployment insurance, no pension scheme, no social security, no senior care, no assisted living, no hospice, and no fully reliably health care system. NGOs, which take care of many of these aspects in Western countries, and especially the U. S., are minimal and have to work semi-underground, since the government officially prohibits them in its drive toward total control. In other words, people use their disposable income to keep themselves save rather than increasing consumption.

Innovation, too, suffers from government control, especially internet and media censorship, hindering key axioms of science, such as skepticism, freedom of inquiry, respect for evidence, the equality of inquiring minds, and the universality of truth. Masking this, the state heavily invests in research, spending close to $50 billion annually, which is a lot in absolute terms but only about 2 percent of GDP, compared with 3.5 percent in Japan and 4.3 percent in South Korea.

The state directs where the investment goes, focusing mainly on large-scale engineering projects, such as transgenic crops, nuclear power, and lunar exploration. It tends to encourage quick successes and short-term gains that can show the Party in a positive light rather than long-term basic development. Being part of the government, moreover, this research suffers from bureaucratic oversight and a low work quality as well as from ubiquitous corruption. Some estimates suggest that as much as half of all allotted funds end up in private hands and do not actually support intended projects.

Private companies, in contrast, are more efficient and much more effective, leading to powerful instances of innovation. One area is environmentally friendly construction, first models of which appeared in the wake of the Sichuan earthquake: using cheaper and more renewable materials, they produced easily assembled houses, well insulated, with built-in solar cells and power-saving devices.

Public transportation is another sore point for many Chinese. Thus, a company in Guangdong pioneered a fully self-driving streetcar system that runs on batteries fed by the friction of the rails, which themselves are not built into the tarmac but easily screwed on top.

Since going outside is becoming more of a hardship, given traffic density and pollution, many consumers are increasingly shopping online. In China the also extends to groceries, a feature that never took off in the West and requires a whole new set of programming. In addition, they are now working on cell phone apps that track the provenance of each food item to its source to providing assurance about food safety. Another side effect is that delivery drivers and motor cycle riders are now among the best-paid low-skilled workers in the country.

Other internet companies with strong innovative power include Ali-baba, the Chinese answer to Amazon, who developed an entirely new way of online payment processing that keeps customers free from the clutches of state-owned banks and avoids credit cards, which the debt-shy Chinese tend to eschew; Xiaomi, a smartphone giant ironically called “Little Rice,” who comes out with new ideas and app improvements every week, testing them live through immediate customer feedback, and thus creating systems that people really want; and Tencent, the largest online gaming company in the world that also focuses on instant messaging, e-commerce, web browsers, and antivirus protection, and has been praised as the most innovative company on the planet.

Others include Apricot Forest with apps that help navigate the health care system; Baidu, the Chinese answer to Google, with increasingly efficient search engines, maps, and social media apps; Wanda, a real estate giant that also invests in public buildings like theaters, favoring unconventional forms of architecture; as well as a number of delivery companies that make online shopping more efficient.

Watch: https://www.youtube.com/watch?v=zLZNvCDgfUA


Read: Shirky, Clay. 2015. Little Rice: Smartphones, Xiaomi, and the Chinese Dream. New York: Columbia Global Reports.

Tse, Edward. 2015. Chinas Disruptors: How Alibaba, Xiaomi, Tencent, and Other Companies Are Changing the Rules of Business. London: Portfolio Penguin.

24. Temple Growth

The shift in population dynamics has made communities more vulnerable, loosening or dissolving traditional ties and shifting focus away from the extended family. As a result, many Chinese actively seek new forms of community, often turning to sports groups or clubs, but increasingly also discovering or recovering religious organizations as a way to create social stability and support.

In this context, Daoist temples are becoming active community builders. Numerous in the old days, dotted across villages, towns, and mountains, with colorful frescoes, imposing statues, ornate furnishings, and gorgeous gardens, they were massively decimated after 1949 and completely eviscerated during the Cultural Revolution. Torturing leading monks as “rich land owners,” as Liao Yiwu describes in his interview with the 103-year-old Buddhist abbot Deng Kuan, Red Guards would destroy paraphernalia and smash up statues, whitewash walls and spray-paint slogans, then turn the place over to the locals. Many temples were completely razed, their building materials used by the peasants. The majority were reassigned, becoming military depots, kindergartens, or housing projects, their lands taken over by towns and local people, while monks and nuns practiced in secrecy. Leaving the area or dying, few survivors remained, and some places have lost all memory of a temple’s presence. For example, the Daoist sanctuary to Bixia yuanjun in Caishan蔡山near Xuzhou was discovered only after heavy rains in 2012 caused the roof to cave and plaster mud to wash away, uncovering murals that had been concealed for decades.

Most temples’ locations are known and, beginning in the mid-1980s, many have been rebuilt—leading to a three-fold increase in numbers over the last two decades. The process took many years of patient plodding, always respecting the population, honoring lay donors, cooperating with the authorities, and working very, very hard. As Adeline Herrou (2013) says about the Wengongci in Hanzhong, Shaanxi, when the first three monks returned, “the compound looked less like a temple than like an accumulation of houses without proper wall or context, singularly lacking in splendor” and partially occupied by lay families. However, the monks made it into a holy place through their vision: “They accurately described what had been there in the past and fervently outlined what they had planned for the future.” This future, moreover, is not a mere replica of the past. Daoists rebuild differently, not only because the earlier forms are irretrievably lost, but also because they wish to transform and adapt the religion to the new century.

In this process, Daoist temples often become a pivot in community building. As Adeline Herrou shows in her amazing video, “Master Feng: Portrait of a Daoist Monk, Rebuilder of Temples in China Today,” Master Feng first returned to and restored his home temple, then assisted in the relocation and revitalization of a nearby city temple, and afterwards turned his attention on largely ruined sanctuary in a remote village in the mountains of southern Shaanxi. The village, a single dirt road with a cluster of run-down houses, was too remote for people to find work, leaving behind only children and the elderly. Utterly dispirited, they had largely given up hope and were just vegetating along.

When Master Feng arrived with his crew of builders and craftsmen, supported by state funds and city donors, they took notice. For the first time in years, someone looked at them as if they mattered. Their spirits rose and, as the temple started to look better, they began to renovate their houses. When it offered the first services to newly installed deities, they applied for government grants and paved the main road, constructed a community center, and began to take pride in their home.

As the temple grew, moreover, tourists started to arrive, looking for peace and quiet as well as clean air and open nature. This opened a whole new level of economic opportunity, houses offering B & B stays, local shops stacking more goods, and vendors selling religious paraphernalia. Adults could now make a living, and some of the migrant workers returned. The Daoist temple, in other words, not only rebuilt religious structures but gave the community a new lease on life, transforming it in the process.

Watch: https://www.youtube.com/watch?v=Yv4LZZOpjOE

Read: Wei, Yanli. 2017. “The Caishan Goddess Temple: Then and Now.” Journal of Daoist Studies 10:196-210.

Liao, Yiwu. 2009. The Corpse Walker: Real-Life Stories, China from the Bottom Up. New York: Anchor, 73-92.

Herrou, Adeline. 2013. A World of Their Own: Monastics and Their Community in Contemporary China. St. Petersburg, Fla: Three Pines Press.


23. Population Dynamics

Photograph courtesy of Helene Minot

China today is the world’s most populous country, with a population of 1.3 billion that, although with a median age of 37 years, is rapidly aging, reaching doing in a mere ten years what took other countries half a century. Retirees over 65 numbered 100 million in 2005; there will be 330 million of them by 2050. Combined with a continuing low birth rate, this means that by then 44 percent of the population will not be working, placing a great burden of financial and social support on remaining workers and the state.

China was well on the way to lower birth rates and the two-child family in the 1950s, before Mao Zedong decreed that the country’s true wealth lay in its people and ordered everyone to multiply as much as possible. This trend contributed to the overarching poverty encompassing the country and would have slowed quite naturally once the edict was rescinded and economic progress set in.

However, the Party, never content to leave well enough alone, in blatant opposition to the good old Daoist wisdom of nonaction, in 1980 instituted the one child policy, imposing heavy fines on anyone daring to have a second or even third child. Local governments having to fulfill quotas of child birth took to harassing anyone resisting, from trashing their homes through taking their valuables to forcing women into (even late-term) abortions and involuntary sterilization.

Although rescinded now in favor a two-child model, the price has been high, especially since most of the population, still living in the countryside and following traditional forms of ancestor worship—however outlawed—saw a male heir as absolutely essential and either killed or abandoned females. Many Western families came to adopt a Chinese baby girl, often from legitimate orphanages but on occasion also the product of human trafficking. Selling a girl abroad, after all, made it possible to pay the fine for the next try for a boy.

Population-wise, the policy has left China with a screwed gender ratio: while the normal rate is 103-108 males per every 100 females, in China it is as high as 118-120 in the countryside and about 110-112 in the cities. Not only creating a potential political powder keg, this has also made it difficult for men to find marriage partners, who often require not only a steady job but also home ownership and other assets before consenting to even date. These are increasingly hard to come by as the Chinese education system is failing: unending memorization no longer cuts it in the rapidly shifting economy. Even college graduates, of whom there are more than ever before, often cannot find jobs. Having grown up in times of rising prosperity, they tend to have a sense of entitlement, wanting a cushy position with little effort and lots of money. Employers, on the other hand, are looking for people with real skills and creative thinking.

Another major factor in the population dynamics is the household registration (hukou) system, which firmly places each family in one particular location. While it is possible to travel to other places, anything requiring official involvement has to be done in one’s hometown: health care, housing permit, driver’s license, children’s education, to name but a few. As a result, huge numbers of people have become migrant workers, living unregistered and without benefits in slums on the fringes of the big cities, making minimal wage and only seeing their families once or twice a year.

Some are well-educated but, as Liao Yiwu shows in the case of the village teacher Huang Zhiyuan, cannot make ends meet in their home town and move into the city. Unable to find legal employment, Huang was forced to do hard labor and eventually ended up driving a flatbed tricycle. Even then, he was constantly on the run from police and on occasion faced imprisonment and had his vehicle impounded. Children suffer the most. If they join their migrant parents, they have no schools to attend and grow up illiterate and unskilled, becoming part of a potentially explosive underclass that digs China deeper into the middle income trap.

The government is set to alleviate this situation and has indicated easements in the registration system. It is also intent on urbanizing 300 million more people, moving them into newly build high-rises on the outskirts of smaller cities. However, the people are not all that keen on these artificial monstrosities, especially where there are no jobs, leaving projects to turn into ghost cities—another huge expenditure with no return grown by crony capitalism.

Watch: https://www.youtube.com/watch?v=eNKQT7Ub2Ps



Read: Fong, Mei. 2016. One Child: The Story of China’s Most Radical Experiment. Boston: Houghton Mifflin.

Shepard, Wade. 2015. Ghost Cities of China. London: Zed Books.

Schmitz, Rob. 2016. Street of Eternal Happiness: Big City Dreams along a Shanghai Road. New York: Crown Publishers, 134-40.

Liao, Yiwu. 2009. The Corpse Walker: Real-Life Stories, China from the Bottom Up. New York: Anchor, 160-72.

22. City Temples

Daoist and other popular temples are part of the positive dynamic of the Chinese economy. Situated centrally in major cities, they are often the focus of commerce and the site of fairs and markets, plus they offer an opportunity to pray for protection and prosperity.

A prime example is the temple of the City God of Shanghai, smack in the middle of a vibrant tourism and shopping district called Yuyuan 豫园 (Pleasure Garden) after a beautiful Qing-dynasty garden, complete with ponds, bridges, pavilions, and rock formations. Pedestrian walkways meander among reconstructed traditional-style buildings housing all sorts of shops, from Starbucks through fashion accessories to souvenirs. Numerous stalls and vendors provide a mouth-watering selection of Shanghai street food, including cookies, buns, dumplings, and more.

The temple itself centers around a large open courtyard, where an incense burner smolders with numerous incense sticks. Various side halls, equipped with benches for kneeling and boxes for money offerings, worship a slew of Daoist and popular deities, while the main hall is dedicated to Qin Yubo秦羽博(1295–1373), a local official under the Yuan dynasty and a distant relative of the late China scholar Julia Ching. Having done much to improve the plight of citizens during his lifetime, after his death his spiritual energy was considered too potent to be limited to just his own family as an ordinary ancestor. Accommodating petitions by the local elite, the first emperor of the Ming Dynasty, appointed him as city god of Shanghai. Believed to have greatly aided the city during times of crisis, notably in the 19th and 20th century under colonial rule and foreign occupation, by appearing to leading citizens in dreams and dispensing advice, he remained popular even after the founding of the People’s Republic.

As China’s economy expanded in the 19th century, the temple grew increasingly popular, offering an opportunity to express thanks and pray for good fortune. Growing to include various side halls and niches of worship to other deities, the temple also housed regular fairs and became the center of a popular market with numerous local businesses setting up shop. In 1951, it was subsumed under the Shanghai Daoist Association and made into a Daoist center. As a result, statues representing folk and Buddhist figures were removed and more Daoist deities installed. Closed during the Cultural Revolution used for other purposes, it reopened in 1994 and was renovated in 2005-06.

Today, as much as other city temples, it is a popular destination for locals and tourists alike. It also contains a significant shrine to the God of Wealth, Guan Yu, originally a general during the Three Kingdoms, and offers the opportunity to pray for interference to the god of one’s year of birth, one among twelve supernatural administrators arranged according to the Chinese zodiac serving in of the Department of Destiny. In times of growing economic dynamic as well as insecurity, it provides succor and spiritual support, the opportunity to pray for wealth, success, and personal good fortune.

Watch: https://www.youtube.com/watch?v=ULgLajr_wrk

Read: Kohn, Livia. 1997. “The Taoist Adoption of the City God.” Ming Qing Yanjiu 5 (1997), 68-106.

21. Economic Development

China is today the world’s largest economy. This is the result of a massive expansion that increased it more than thirty-fold from $202 billion in 1980 to close to $7,000 billion in 2011. Growth rates, fueled by government credit, a controlled currency exchange rate, low-cost manufacturing, and global exports, stayed in the double digits for several decades and still hover around 7 percent. However, they are falling and expected to drop to 3-4 percent over the next few years. In addition, while the country’s overall GDP is $11 trillion, its debt has risen to 260 percent of GDP, compared to 104 percent in the U.S.

China is far from a developed country. Per person GDP is $8,000, just above Peru. The income gap within the country is widening. China has the most billionaires after the U. S. and 1 percent of the population hold 30 percent of the country’s wealth. About one third, 350 million, have reached the middle class, with incomes between $8,000 and $25,000. The remainder, 875 million, are still below, but set to move into cities and rise to the middle class, their incomes expected to rise 15 to 20 percent.

It is these people that make up the backbone of the Chinese economy. They are vibrantly entrepreneurial and aggressively upward moving. Many run sole proprietorships, and there are 40.6 million small businesses. When the government eased the requirement for cash reserves and simplified administrative procedures in 2015, new registrations rose dramatically. While moving the economy forward, the rising middle class will also require (and demand) expanding infrastructure and improved social services. This puts an additional burden on provincial and municipal governments, who are already facing heavy debt.

In addition, the economy is hampered by large-scale government interference, notably the state-owned enterprises (SOEs) that still control 40 percent of the economy and are known for being cumbersome, bureaucratic, and corrupt. In fact, they are a prime example of what economists Daron Acemoglu and James Robinson, in their ground-breaking study Why Nations Fail (2012), call “extractive” as opposed to “inclusive” institutions. Concentrating power in the hands of a narrow elite and placing few constraints on the exercise of this power, such institutions extract resources from the rest of the society, appropriating the resources of many, erecting entry barriers, and suppressing the functioning of markets.

They prevent what Joseph Schumpeter has called “creative destruction,” the way in which economic growth and technological change replace the old with the new. New firms take over, new technologies make existing skills and machines obsolete. The process creates losers as well as winners, endangers old privilege and power structures, potentially toppling governments and upending social patterns—in other words, it presents a major danger to Party rule.

This rule is still strong. Without an independent judiciary and unhindered by private competition, state-owned enterprises control entire industries, most importantly banking, transportation, telecommunications, the media, and real estate. The latter is a prime example on how local governments manipulate the economy, alternatively creating bubbles or slowing the market. That is, they influence demand by willfully installing or removing home purchasing restrictions: preference to local versus out-of-town buyers, restrictions on the number of properties one can own, requirements on the amount of down payments, plus a wide variety of taxes due at purchase (in lieu of the annual property tax): value-added tax, land-value tax, real estate transaction tax, capital gains tax, property tax, education tax, to name but a few.

A rigged economy, combined with a lack of clear property laws and freedom of expression, does not bode well for China as it finds itself now in what economists call the “middle income trap.” This is reached when a country has lost its competitive export edge due to rising wages and increased cost of living, yet is unable to evolve toward higher levels, mainly due to lack of creative destruction but also because of it fails to educate and create opportunities for lower earners. In the 1960s, 106 countries entered the middle income trap, and so far only 13 have made it out—most notably Japan, South Korea, Singapore, and Taiwan, who all seriously democratized in the process and created excellent educational systems with justly enforced laws and free independent media.

Watch: https://www.youtube.com/watch?v=9uKYYQAgJDg


Read: Rein, Shaun. 2014. The End of Copycat China: The Rise of Creativity, Innovation, and Individualism in Asia. New York: Wiley.

Shambaugh, David. 2016. China’s Future. Cambridge: Polity Press.

Also check: http://popupchinese.com/lessons/sinica/the-china-meltdown

20. Western Daoists

Photograph courtesy of Helene Minot

A yet different form of Daoist international expansion is the practice and teaching by westerners initiated into the religion by Chinese masters in China, then building communities in their homeland. There are numerous such western masters, prominent all over Europe and the U. S. I introduce a few representatives.

A major force in the initiation of western Daoists since the mid-1990s has been Feng Xingzhao, the abbot of a small, isolated temple called Leigutai擂鼓台 (Terrace of Rolling Thunder) in the high mountains of southern Shaanxi near Ankang. He initiated many of the leading Daoists of Europe, including Shi Jing and his fellows of the British Taoist Association (http://www.taoists.co.uk/); Karine Martin, president of the Association Française Daoiste whose center near Montluçon just opened (http://france-dao.blogspot.com/); as well as Herve Louchouarn, the leader of a Chinese medicine clinic and Daoist community in Guernavaca, Mexico (https://tusaludcuernavaca. wordpress.com/ tag/prof-herve-louchouarn-t/).

All these groups provide lessons in taijiquan and qigong, teach Daoist philosophy and ethics, offer healings and counseling, and operate Daoist temples and priestly education. They also commonly publish newsletters and sponsor workshops with leading Daoists, scholars, and taiji masters.

In the U. S., practicing Daoists tend to be initiated by various masters. For example, Michael Rinaldini, founder of the American Dragon Gate Lineage (https://qigongdragon.com) with a center in Santa Rosa, California, trained with Master Wan Sujian (b. 1953). A former military physician, he runs a medical qigong clinic on the outskirts of Beijing, which he expanded to also house a Daoist temple in 2002. Training in bagua and other forms of taijiquan as well as in medical qigong and Daoist scripture studies, Rinaldini practiced at home and visited Wan over several years, to be initiated by Wan’s resident Daoist in 2003. He now has an active training center and himself initiates the next generation

Louis Komjathy, the founder of the Daoist Foundation (http:// daoistfoundation.org/about/), trained with a vice abbot on Huashan and lived both there and on Laoshan as a Daoist monk in addition to being a Ph. D. level scholar and academic professor of Daoist studies. He teaches various workshops and proposed an integrated program that encompasses a Daoist lifestyle (breathing, exercises, cooking, fengshui) in combination with internal cultivation and alchemical transformation.

Jerry Alan Johnson, the founder of the International College of Medical Qigong (http://www.medicalqigong.org), as well as his successor and current director Bernard Shannon, in addition to training in traditional Chinese medicine and qi-healing, hold multiple Daoist lineages: Dragon Gate from Qingcheng shan in Sichuan, Highest Clarity from Maoshan near Nanjing, and Celestial Masters from Longhu shan in Jiangxi. The College is located in Palm Desert, California, complete with Chinese gardens and a Daoist sanctuary, the Temple of Peace and Virtue. In addition to training medical qigong healers, they also run a publishing house specializing in qi healing, offer a program leading to initiation as a Daoist priest, and maintain continued close contact with Chinese masters.

Watch: https://www.youtube.com/watch?v=dD4VJIPZLzE


Read: http://www.taoists.co.uk/Files/FengXingzhao-interview.pdf

Komjathy, Louis. 2004. “Tracing the Contours of Daoism in North America.” Nova Religio 8.2:5-27.

Rinaldini, Michael. 2008. “How I Became a Daoist Priest.” Journal of Daoist Studies 1:181-87.