DARREN GERSH: Look inside any of the apartments in the many new high-rises crowding the Beijing skyline and you will find a couple much like Jackie Chen and Alan Li. They`re members of China`s new middle class, but the pressure they feel to keep up would be familiar in Boise or Boston.

JACKIE CHEN, BUSINESS CONSULTANT: Maybe earn more money, to become more successful, to have a bigger house, to have nicer cars, to have more free time for ourselves, to do traveling.

GERSH: Jackie is a business consultant, Alan a lawyer. They share their two-bedroom apartment with Jackie`s parents, who left behind a very different life in Hunan province.

CHEN BINGSHENG, JACKIE`S FATHER: We came from the villages. We were peasants. Our children studied very hard. We did all we could to provide our children with the best education. We wanted them to be successful. As parents, we wanted them to become pillars of the state.

GERSH: Certainly, the Chinese middle class is a pillar of the surging economy. It`s estimated there are some 65 million people in China with family incomes of more than $7,000 a year -- middle class by Chinese standards. But that means just 5 percent of the 1.3 billion people here make enough money to enjoy some of the consumer products Americans take for granted. In China, the gap between rich and poor is vast. In the countryside, most families get by on a few thousand Chinese yuan-- less than $400 a year. But Jackie says a decent middle class life in the city costs 100,000 yuan.

JACKIE CHEN: I think that is just enough to hold a reasonable life in Beijing.

GERSH: That`s maybe $12,000?

CHEN: $12,000 U.S., yes.

GERSH: Middle class incomes are growing almost 8 percent a year, and remaking the Chinese economy in the process. Banks are flush with cash. The Chinese are prodigious savers, putting aside 40 percent of their incomes. Economists say that`s one reason banks can get away with making so many bad loans to inefficient or corrupt businesses. And there is little penalty for failure.

ALAN LI, LAWYER: People trust banks because the large banks are all state-owned and people believe that the government will not let the bank get bankrupt.

GERSH: But while middle class incomes are rising, investment options are not. And the poorly regulated stock market is considered little better than a casino.

CHEN: In my situation, I couldn`t find many investment opportunities. So beside putting my money into the banks, personally, I don`t like putting my money into the stock market or bonds or those things. I just don`t like those investment opportunities.

GERSH: But the Chinese aren`t saving all their money. A middle-class consumer culture is emerging in China. Retail sales will top $600 billion this year. And along with the shopping, middle class couples are now borrowing money to buy cars and apartments. It`s another way in which the lives of the rising middle class differ from those of their frugal parents.

CHEN: They would never borrow money to buy something for today.

GERSH: Jackie and Alan paid $60,000 for their apartment, and now carry a monthly mortgage payment of $300. It`s not much by American standards, but it`s new ground in China.

CHEN: The ideals of the new generation like ours have changed. So now we buy the house on mortgage.

GERSH: And there are a lot of new homes and apartments in China, though Alan says the housing boom here does not compare to the U.S.

LI: In the states, you have huge land and not so many people. People drive big cars and have big houses, but in China you cannot, because so many people... If everybody had such a big house, there would be nowhere for crops.

GERSH: With so many people, competition for the good life in China is fierce. Even college graduates are having a tough time finding work. In a country of 1.3 billion, it is easy to feel there is always someone else ready to take your place.

CHEN: We feel much, much more intensive pressure, because just too many. I mean, a basic problem, a basic cause: there are so many people here in China. You feel competition every time, almost every minute -- from work, from your life, you feel the pressure.

GERSH: Jackie`s mother and father feel it too. They worry about their children and the stress of climbing the new Chinese social ladder.

LIU WANGSHENG, JACKIE`S MOTHER: My daughter and my son-in-law often work until midnight. They live in the suburb, very far from work. They have to get up at 7:00 every morning, and come back so late at night. I told my relatives back in the villages that although they make a good amount of money, they`re very tired and spend a lot of time at work. So I told dad that let`s move to Beijing to take care of them. Help them do some housework. Cook for them and wait for them to come home at night. They eat take-out food every day. I don`t think they are used to the food. Their work is too tiring.

GERSH: Take-out food, long hours -- these are some of the ways the rising middle class is reshaping life in China. There are others. Bicycles are giving way to cars. Beijing is now well-acquainted with the bane of middle-class existence everywhere: terrible traffic.

CHEN: Every day when he drives me to work, I was very nervous, because everyone drives so crazy.

LI: In China, if you obey the regulation, you will always after somebody else.

GERSH: On the road, in the stores, the Chinese are falling in line with consumers around the world. Professor Shen Ming Ming surveys Chinese consumers.

SHEN MINGMING, DIR., RESEARCH CTR. FOR CONTEMPORARY CHINA: All the kids all over the world like McDonald`s, even though we all know they provide junk food, Chinese youngsters no exception.

GERSH: Shen earned his doctorate at the University of Michigan. He`s seen how people on both sides of the Pacific cling to stereotypes about their middle class counterparts. Shen says it`s not difficult to understand the Chinese; they`re an awful lot like Americans.

SHEN MINGMING: They worry about their children and they complain about they are overworked and underpaid. Ordinary people are all alike.

GERSH: And most parents are alike. Julie`s father is proud of his daughter, the capitalist management consultant, even though he is a member of the communist party.

BINGSHENG: Thanks to the party`s good policies, they have a better life now. I couldn`t imagine all this back in the `70s. We had a hard life in the villages then. When we were told that we would achieve moderate prosperity in the future, I couldn`t imagine what that would be like.

GERSH: Many people here tell us with the new prosperity and the freedom to move and find a job, Americans are wrong to believe China is a repressive place. So much has changed for the Chinese middle class, and so much has not.

CHEN: Yeah, I think I have more freedom, at least financially, I have my freedom than my parents. In terms of speech and those things, not much, not much difference.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2005 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/05/05: Seeds of Change

DARREN GERSH: 425 million people work the land in China. Zhang Yuzhen is one of them. She and her husband farm two acres around the village of Jiang Tai...

TRANSLATION OF: ZHANG YUZHEN, RICE FARMER: It`s all spread out. Every family has some.

GERSH: ...spread out across a patchwork of tiny plots. That way, the best and the worst fields in the village are divided equally. It`s the same through much of China. The result: an average farmer earns less than $400 a year, though this year Zhang`s income is rising.

TRANSLATION OF: ZHANG YUZHEN: Now we don`t have to pay the farm tax anymore. Really, the price of rice is going up. Now we make more money by planting.

GERSH: Zhang lives here in Ningxia province. The Chinese call it their wild west. Here, remnants of the Great Wall of China still guard the high plains along the border with inner Mongolia, and the Yellow River begins its journey through the cradle of Chinese civilization. Zhang tells us her family has been farming here for as long as she can remember. But that history on the land may be coming to an end. Zhang`s children have moved on.

TRANSLATION OF: ZHANG YUZHEN: They don`t have too much to do at home, so they don`t want to stay home. We have only two acres and my husband and I can take care of them. That`s why our children want to earn more money in the city.

GERSH: As I talked with Zhang a crowd gathered to watch. So I asked these villagers how life on the farm compares with life in the city. Fang Yonggui says living standards here are not high.

TRANSLATION OF: FANG YONGGUI, RICE FARMER: The migrant workers make more money. If we stay at home and farm, we make $250 to $350 a year.

GERSH: I asked about working conditions for migrant workers. "it`s OK," some yell out. But Fang disagreed.

TRANSLATION OF: FANG YONGGUI: Not good. Their wages are not enough. The living conditions are poor.

GERSH: The income gap between urban and rural China continues to widen. Migrant workers can make three times more than farmers. Even so, Tao Xuejun prefers to stay home.

TRANSLATION OF: TAO XUEJUN, RICE FARMER: If you go out to the city sometimes you`re cheated and you lose all the money you make.

GERSH: The villagers here have some questions of their own. They want to know about the cost of apples in the United States. Does the U.S. have a family policy like China`s? Then a man shouts out. How much does an average American person make each year? I tell them an average family of four makes about $40,000. It is an unimaginable sum here. "It cost more in the United States," the woman in the back yells out. In China, farmers can`t make that much money in our entire lives.

GERSH: But you can`t compare farmers here to American farmers. Most Chinese are really peasants, working with their hands, growing just enough to survive. Tao Liang says his family has a third of an acre per person.

TAO LIANG: Four people farm just over an acre. Even though it`s only a little more than an acre, it is still pretty tiring to farm.

GERSH: Ningxia is one of China`s poorest provinces, but the village of Jiang Tai is close to the Yellow River and the water it brings means dependable crops.

FANG YONGGUI: This place is not considered very poor in China. It`s considered OK, below average, but not the bottom. Some mountain areas are worse off.

GERSH: But even in wealthier provinces, farmers complain corrupt party officials often steal their land. The conditions are so bad, peasants have staged tens of thousands of mass protests across China, an astonishing number in an authoritarian state. Fearing the unrest may grow, the Chinese communist party eliminated farm taxes and promised new investment in the countryside. In Ningxia, some farmers have gotten loans to build greenhouses. But the new spending hasn`t come to Zhang`s village.

TRANSLATION OF: TAO LIANG: I haven`t heard of it.

GERSH: All Zhang sees is that the children continue to leave the countryside for the promise of the city. And she can understand why.

TAO LIANG: Everything is convenient in the cities. There`s no dust. When we are working in the fields, we`re bathed with sun and bitten by mosquitoes. The work is harder here.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2005 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/05/05: Finding A Better Life

TRANSLATION OF: LIU BAILIN, MIGRANT WORKER: My hometown is Shanxi. I come here to work.

GERSH: Liu and his wife, Wei Qiuli, left their five-year-old son back home. Now they live and work in Beijing, illegally.

LIU BAILIN: We came here last year, in the spring.

GERSH: Liu bakes and sells these small snack cakes. Each brings in $0.05. In this, the southern part of Beijing, at least there are plenty of customers.

LIU BAILIN: I`ve always thought Beijing is a good place. Nothing has changed since I came over. At least, it`s the capital of the country. It`s definitely better than my hometown. There are many droughts in my hometown. We barely have any harvest. This year, we still have no harvest. The wheat all died from the drought.

GERSH: No one knows for sure, but official estimates put China`s migrant population at 120 million people. And that human tide flows through train stations like this one in Guangzhou. Some migrants leave farms after the crops are harvested, looking for other work. Factories and construction sites are the most obvious employers. Many float from city to city. This man tells us he has worked all over China.

UNIDENTIFIED MALE: Bejing, Tianjin, Harbin, Shandong.

GERSH: In the migrant neighborhoods around Beijing, telephone numbers scrawled along the walls promise new arrivals false identity papers. But no one bothers to call, because it`s easy to live or work here without them. Small factories willing to employ illegal migrants are everywhere. And the Chinese are an energetic and industrious people.

LIU BAILIN: I have to make money, make my ends meet.

GERSH: For many migrants, working conditions are dangerous and it is often difficult to get paid. There is a big difference between getting by and getting ahead. And a migrant worker`s reality doesn`t leave much room for dreams of a better future.

LIU BAILIN: No dreams. As long as I can feed my kids, my family. What dream can an ordinary person have? As long as I can survive, that`s enough.

GERSH: Those who know China well say the people here are practical, not political. Asked what he would say to Americans, Liu says simply:

LIU BAILIN: They definitely have a better life than we do.

GERSH: His real interest is business.

LIU BAILIN: You don`t make this in America, do you? I really want to know the difference between American snacks and Chinese snacks. I want to learn how to make American snacks.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2005 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

09/05/05 The Entrepreneur Goes Global

DARREN GERSH: His name is Lu Weiding. If you are in the business of building cars, you may want to remember it. Lu is CEO of Wan Xiang, the largest private auto parts maker in China. But he also sells and manufactures around the world.

TRANSLATION OF: LU WEIDING, CEO, WANXIANG GROUP: With the development of the Chinese auto industry and the auto industry worldwide, Wan Xiang would like to quietly play a supporting role. That`s what we Chinese say. From a business perspective, Wan Xiang would like to serve all auto production companies, providing them with quality, competitive prices and excellent service. Every firm is my customer. I hope that more and more cars on the road will use our parts.

GERSH: Count on it. Wan Xiang expects its worldwide sales to jump 23 percent this year to $3.7 billion. And there is more growth down the road. JD Powers estimates China will soon overtake Japan to become the world`s second largest auto market, with sales of more than six million cars and light trucks a year. But Lu says he doesn`t expect China`s auto industry to see another year like 2003 when sales grew 45 percent.

LU WEIDING: All auto companies will not enjoy the rapid increase as they do now. Some will do well, some will not. Second, the increase of auto production volume in China will depend on the investment in infrastructure, in transportation. Third, the total auto production volume will definitely increase. But the profit on each car will remain stable. Fourth and most important, Chinese auto consumers will need services from not only Chinese auto companies, but auto companies worldwide. They need world-class service.

GERSH: Lu is predicting an auto parts industry shake-out and the Chinese government is actively encouraging it. China has declared its ambition to create a world-class auto industry, so it is cracking down on unsafe parts and raising quality standards. Still, Lu acknowledges Chinese auto parts manufacturers do not have the experience with advanced electronics, metals, and software needed to make high-end auto parts.

LU WEIDING: It is indeed a challenge. It`s a challenge to every company in the world, especially those in China. That`s why we need cooperation so we can adjust and improve in the areas mentioned. The improvement will allow us to cooperate better with the big players.

GERSH: which is why Wan Xiang has bought five auto parts factories in the far bigger American market. Wan Xiang employs 1,000 workers in the U.S. and expects sales here will reach half a billion dollars this year.

LU WEIDING: Chinese companies, especially companies like ours, we realize we need to know more about the technology, management and the market. After we arrived in the United States, we wanted to cooperate with our American colleagues. Of course there will be competition along with cooperation. You can never avoid competition and cooperation. Our technical centers and factories in the United States and our technical centers and factories in China work together. We hope to take advantage of the different resources available in different markets. For instance, the extra processing of our products is done in the U.S., but the parts are coming from China.

GERSH: This is Lu`s first television interview. He recently took over Wan Xiang from his father, who built the company from a tractor repair shop into a modern factory. As a second generation Chinese entrepreneur, Lu says the challenge is to think globally. Asked how he plans to succeed, Lu refers to the Chinese management book, "Definitely Made in China."

LU WEIDING: The preface of the book told a story that, I think, is very interesting. It says in ancient China-- most Chinese then believed in Buddhism-- a Chinese Buddhist monk had to go on a pilgrimage to acquire scriptures from India, while an Indian Buddhist monk had to acquire scriptures from China. They met on the way and talked. After the conversation, both of them laughed and went back to their own country.

GERSH: The story, Lu says, illustrates the need to combine the best of Chinese culture, with western know-how.

LU WEIDING: So for us Chinese CEOs, we need to integrate the two cultures, and the two goals. That`s the pressure on management. If the integration is successful, it will be powerful. It will give us the capability to implement new ideas. If the two cultures are in conflict, it can harm any company.

GERSH: But is Wan Xiang ready to take a page from that other famous Chinese management book, "The Art of War"? Lu says no.

LU WEIDING: There`s still a long way to go before the Chinese auto industry can contend with the U.S. Now is not the time. Generally speaking, the Chinese auto market will increase by 10 percent every year. There are three big U.S. auto companies in China. They will have a brilliant future in China, because they have strong Chinese joint venture partners. As long as they can, through their Chinese partners, know more about Chinese consumers, provide more products that are welcome in the Chinese market, perfect their auto parts system, then the development of the Chinese auto market will benefit U.S. companies as well.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2005 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.