In October 2017, the 5th Plenary of the 18th National Congress of the Communist Party of China announced the future direction of Chinese economic development:
Fully develop the basic role of consumption in economic growth; focus on expanding household consumption; steer consumption in intelligent, green, healthy, and safe directions; and focus on expanding service consumption to promote the upgrading of consumption.
It was easy to miss the point amidst all the droning officialese. Small wonder, then, that government bodies and the business community simplified this directive into four easy-to-remember characters: 消费升级 (xiaofeishengji), “consumption upgrade.” In the past three years, the phrase has appeared in the policy documents of eleven provinces and autonomous regions, a dozen cities, the Ministry of Commerce (MoC), and China’s top executive body, the State Council.
The aim of the “consumption upgrade” is simple: to transition from an investment-driven economy powered by industry to a consumption-driven economy sustained by a consumer society. Promoting domestic consumption isn’t a new priority: the Chinese Communist Party has pursued this goal since at least the late 1990s, when the 1997 Asian financial crisis alerted the country’s leadership to the perils of an export-driven economy. But it has acquired more urgency in recent years, as investment-driven growth has slowed.
Moreover, the internet offers a powerful new tool for building a consumer society, one that the government believes will play a crucial role in China’s economic transition. The MoC, at a press conference in late 2017, identified the internet as a “channel” that would make the “consumption upgrade” possible—specifically, by linking populations in rural and remote regions with high-quality goods at low cost, ensuring that economic development reaches the whole population.
As a result, you might expect the Chinese Communist Party to love Pinduoduo (PDD), the group-buying app founded in 2015. PDD works like Groupon, but rather than events and services, the app’s listings are primarily consumer items, from fresh fruit to diapers to home electronics. According to a 2018 study by venture capital firm GGV Capital, around 60 percent of PDD’s users come from less developed regions of China, and the deals are considerable: 399 RMB ($60) for a LED TV, for example.
To top it off, the interface is addicting: cartoon-like icons on a red background; daily lotteries and games through which shoppers can win further discounts; and the ability to share your finds and recruit friends to buy together via WeChat, China’s biggest social media app. These attractions helped make PDD the youngest-ever Chinese startup to be listed on the NASDAQ stock exchange. At its IPO in July 2018, PDD raised $1.6 billion.
Yet for all its success, PDD has encountered constant trouble from the Chinese government. Why? The prevalence of counterfeit goods on the platform. Shortly after PDD’s IPO, the State Administration for Market Regulation called for an investigation of sales of counterfeit products on the app. Social media users shared images of “Shrap” TVs and “Phelips” razors listed for sale, while an anonymous blogger wrote a widely read post accusing PDD of “set[ting] China back in its “hard and bitter trade war…one of the core objectives of which is to showcase how far we have come in intellectual property awareness.” More recently, in March 2018, a rumor circulated on Chinese social media that in 2017 alone, WeChat blocked links sent from PDD more than 1000 times, presumably in response to government pressure.
The PDD controversy isn’t just about fake goods, however. There is a deeper dynamic at play. By using platforms like PDD, rural residents are staking a claim to China’s digital sphere. The Chinese internet has long catered to the urban middle classes. To Wu Changchang, a professor of communications at East China Normal University, the “invisible minority” of rural users “didn’t have any discursive power before.” Now, rural users are making themselves visible to the rest of the country in a radically new way—and provoking a confrontation with the state in the process.
Paper Towels and Tasty Fruits
The countryside has immense importance to the Chinese Communist Party. Urban population only surpassed the rural population for the first time in 2011, and over forty percent of Chinese citizens still live outside cities. Economic development—and in particular, bringing an estimated 1.3 million people in rural areas out of poverty each year—has long been the basis of the party’s legitimacy. With rural incomes rising at an estimated 10 percent each year, compared with 5 to 6 percent in the cities, the countryside is also expected to boost China’s growth and consumption figures in the next decade.
On September 20, 2018, the State Council released a policy document that outlined how the government plans to promote growth in the countryside going forward. It defined the “consumption upgrade” for rural towns and villages as an effort to increase not just the quantity but the quality of what people buy—literally, in the form of higher-quality products, but also by changing the nature of of spending from necessities to “telecommunications, cultural and leisure products, automobiles, and e-commerce in general.”
Getting rural users to embrace e-commerce can be challenging, however. One problem is the lower rates of rural connectivity: according to a 2017 study conducted by the China Internet Network Information Center (CINIC), the government body responsible for internet affairs in China, the countryside accounted for 43 percent of China’s total population but only 27 percent of all of China’s internet users. Even when rural users do have internet access, simply connecting them to products isn’t enough to ensure that they can afford to buy them. China has one of the world’s most unequal societies, and its countryside is poor: according to the National Bureau of Statistics, per capita income in rural areas is 39 percent that of the per capita income of urbanites.
This is where PDD comes in. The app has been remarkably successful in popularizing e-commerce among rural residents by giving them access to cheap goods. To PDD’s user base, affordability is essential. Wang Qunhong, a twenty-nine-year-old migrant worker from Ji’an, Jiangxi, put it to me this way: “The important thing about PDD is that it’s cheap, it really is.” She feels that the mainstream media had blown the fake goods controversy out of proportion. “You do find knockoffs, but you can’t say it’s all bad; you can find stuff as good as you’re willing to pay for,” she said.
Li Yinghui, a thirty-nine-year-old housewife in the village of Heyang, Zhejiang, agrees. “Wages around here aren’t high enough for me to be shopping online every day,” she told me. Low wages aren’t the only factor that constrain Li’s capacity to participate in e-commerce. “My phone can’t even run most [apps]; it’s a cheap one that I bought for 1,000 yuan ($150),” she explained. Her fifty-six-year-old neighbor, Zha Xiaolong, is even less interested in letting mobile technology change his habits. “What’s an app?” he asked as he squinted over the top of his screen. “I only use WeChat.”
These are the obstacles that PDD has overcome so successfully to become a major platform for rural e-commerce. A 2018 study estimated that 40 percent of PDD’s users live outside even “fourth-tier” cities in China. “Those inside [Beijing’s] Fifth Ring Road won’t have heard of us,” PDD’s founder Colin Huang told the magazine Caijing, arguing that he was bringing the government’s vaunted “consumption upgrade” to the countryside. Upgrading consumption “doesn’t mean letting people in Shanghai live like Parisians,” he explained, “but letting the people of Anqing in Anhui province have paper towels and tasty fruits.”
From the government’s perspective, building a consumer society in the countryside is essential for economic development. Platforms like PDD are clearly serving that goal. Yet if you give people tools for participating in the national economy, you have to expect them to use them for their own ends—and this often gives visibility to economic conditions and desires that contradict the image of the modern nation that the government wants to project.
The urban-rural gap in China is not just an economic divide in consumption power but a cultural divide based on consumption habits. Rural residents don’t just consume cheaper goods. They consume different kinds of goods—including, in some cases, ones that the government may not approve of.
This is no less true in online media than in e-commerce. If counterfeit goods on e-commerce platforms popular with rural users pose a challenge to the government, so too does “vulgar” content on social media apps popular with the same demographic. In both cases, the successful push to bring the countryside online has yielded unexpected consequences that the government is struggling to control.
The conflict over online media is aptly demonstrated by two other apps that have frequently showed up on the authorities’ watchlist: Jinri Toutiao and Kuaishou (called “Kwai” in English). Jinri Toutiao is a news aggregator, while Kwai enables users to watch, create, and share short videos. Both draw a large portion of their user base from less developed regions. (As of 2017, five of Kwai’s top ten most followed accounts hailed from “rust belt” communities in China’s economically depressed northeast.) And both have been hit with accusations of being “vulgar” (低俗 disu).
The content that has been criticized includes scantily clad women, tattooed gang members, domestic violence, pregnant teens showing off their bellies, and would-be “pranksters” groping women on the subway. It also includes cross-dressers, obese individuals, off-key singers, and hanmai performers—amateur rappers who record themselves shouting over the beats of small-town nightclubs—whose enthusiastic (if not exactly polished) acts have won them millions of fans around China.
Such material has caused Kwai to come under public scrutiny in a way very reminiscent of PDD. In 2016, the writer Huo Qiming published an influential essay on WeChat called “A Brutal Grassroots Saga: China’s Countryside Within an App.” He graphically describes the violent stunts that rural users perform in videos on Kwai, such as a farmer lighting firecrackers under his groin and a teenager who grins and eats a live snake on camera. And he blames China’s urban-centric economic development and the underrepresentation of the countryside in official media for forcing the rural population to risk their health and safety to gain a national following and a few hundred RMB with corporate sponsorships (selling, Huo adds, “inferior and counterfeit products”).
These views are clearly shared by government officials, who have repeatedly cracked down on Kwai. The authorities have twice ordered Kwai to “rectify” its content, and CCTV, the main state television broadcaster, has singled it out for criticism. WeChat banned the sharing of Kwai content for six months, only lifting its restrictions in October 2018. A month later, Kwai briefly disappeared from the Android app store.
Similarly, Jinri Toutiao has endured heavy criticism for vulgarity and faced government pressure as a result. In November 2018, the platform’s “life stories” channel was put on a one-month hiatus for “erotic content,” following the appearance of viral essays with titles like, “Her one-night stand turned out to be her new supervisor.” To date, the app has been taken offline many times, and hundreds of user accounts have been closed down.
In January 2019, the China Netcasting Services Association, an industry association authorized by the Ministry of Civil Affairs, issued new guidelines that required short-video platforms to review every piece of content before it goes online to ensure that it does not contradict official political positions of the Party, or promote vulgarity, violence, gambling, drug use, superstition, ethnic division, or sex. Another article in the regulations suggested video apps should try to attract “mainstream media” and Party or military-affiliated organizations to open accounts, in order to “improve the provision of positive and high-quality content.”
As with PDD, though, apps like Kwai and Jinri Toutiao have their defenders. To them, the platform’s content is an authentic expression of grassroots rural culture. In 2016, Zhang Yiming, the founder of the company that makes Jinri Toutiao (as well as the popular short-video app TikTok, known in China as Douyin), told Caijing, “I don’t think it’s a problem to be labeled ‘vulgar.’ The magazines you read at the airport are different from the magazines at the train station, but some people will denigrate [lower-class train station reading] in order to prove that they are elegant.”
For Professor Wu at East China Normal University, the conversation around vulgarity signifies a deeper issue about the representation of rural life. “Technically speaking, mass media should already be giving this type of [rural] mass culture an opportunity to express itself,” Wu says. “But it’s also a fact that this culture doesn’t meet the standard for the type of culture that [the authorities feel] Chinese media is supposed to promote.”
Long neglected by official media, rural residents are creating their own media online, regardless of whether it aligns with the public image that the government hopes to cultivate. To Wu, there will always be a market for the so-called “low end” of goods and media consumption, but this reflects a real divide in society under the current “socialist market” economy, rather than any conscious effort to provoke cultural conflict. Rural social media help “reinforce or even restore the bonds of community, and in-group and out-group relations within the villages.” They also expose the gaps in the official narrative of upward mobility, and function as a kind of implicit critique of the notion that anyone can succeed in the new Chinese economy—which may help explain why they have triggered a heavy-handed government response.
Better Products, Better People
Counterfeit goods on e-commerce platforms and vulgar content on media apps may seem like distinct controversies. But from the government’s perspective, they are closely connected.
Ever since market reforms began in 1978, and the focus shifted toward globalization and economic liberalization, discussions in official media about improving product quality—or pinzhi (品质)—began to happen alongside discussions about improving suzhi (素质), an ambiguous term that encompasses a citizen’s intellectual and moral qualities. Rural Chinese are often seen as particularly in need of improved suzhi, and the government has launched several initiatives toward that end.
One example is the “National Training Plan for Migrant Workers,” an ambitious policy to improve the suzhi of China’s rural-to-urban migrants through a mix of state-run job-training programs and media campaigns at the provincial and municipal levels. The goal was to encourage migrant workers to improve their manners, develop useful skills, and adopt an enterprising attitude to compete in the market economy in the absence of social benefits. Chengdu’s training program, for example, had lessons on municipal hygiene and traffic rules, as well as the “right” ways of sitting, walking, and even dressing for migrant ”new urbanites.” A 2009 program in the town of Zhangpu, Jiangsu Province, included lectures on labor law and job-search etiquette, as well as skills training in the accounting, security guard, and landscaping professions.
Vulgar content that goes viral on platforms like Kwai threatens to undermine suzhi, then, just as counterfeit goods that circulate through platforms like PDD threaten to undermine pinzhi. In both cases, however, a top-down order isn’t enough for the countryside to upgrade its lifestyle. Counterfeit goods, and “low-quality” content, continue to flow.
“Other men can go home and watch their wives. I watch my phone,” Zhu Hongfu, a laborer from Zhejiang province, baldly admits to me. A bachelor now in his fifties, Zhu is among the three million “surplus men” in China, many from rural or working-class backgrounds who, as a result of China’s skewed gender ratio and their own financial position, may never find a partner to marry. Besides using WeChat to keep up with friends, he says, his phone serves just two purposes: playing an online card game called Double Buckle, and browsing videos of attractive women.
“I’ll stop when I get married,” he jokes.
His colleague from nearby overhears him, and shouts: “Then we may have to wait a long time!”