A Futuristic City on the Grand Canal
I am very happy to have witnessed how Hangzhou has led the way in mobile payment use in China and, I dare say, the world
Timothy Clancy
Timothy Clancy graduated from the University of Technology Sydney with Bachelor Degree in Electrical Engineering and Master Degree in Engineering Management. He is a dual language master of ceremonies. In 2016, he became the official International Volunteer Representative of Hangzhou G20 Summit. In 2019, he was elected as one of the Hangzhou City Top Ten youth talents in New Era.
In 1818 China was, in fact, the largest economy in the world;the Industrial Revolution in Europe had started but had not reached full effect. In 2018, China is now the world’s second-largest economy (if measured in terms of PPP, it is the largest). By 2030 it is predicted that China, once again, will be the world’s largest economy. Such profound developments are never smooth sailing, however. They come with major challenges:facilitating domestic consumption, lower savings, reducing debt levels, balanced rise in living standards, environmental concerns etc. These are all issues facing the so-called Fourth Industrial Revolution.
It has now been 40 years since economic reforms were initiated that opened up China to foreign investment and foreign technology. I wonder if the people who proposed such transformational policies to Deng Xiaoping at the time imagined what would become of it all 40 years on. At that time, China had a GDP that was lower than half of the Asian average and lower than two-thirds of the African average. In dollar terms, the GDP has jumped from $149.54 billion in 1978 to $11.2 trillion in 2016.The economy has been growing nearly 10 percent each year on average for the last 40 years, which is triple the world’s average. Such transformational growth has lifted millions of people out of poverty. The development is mainly driven by the coastal east, the east and west of China being strikingly different with divides in economics, local politics and culture. Per capita income there is still below the world average, reflecting the amount of development that needs to occur mainly in the western part of the country.
China’s Gini coefficient in 1978 would have been very low, as can be inferred by the GDP and mode of governance, but today’s Gini coefficient as a measure of the whole country shows that there is a polarization between the rich and the poor. There is a gap between the developed east and the underdeveloped west or remote frontier areas of the country. In terms of Gini coefficient, 0.4 is a kind of warning signal, and any higher than 0.4,indicates the society is expected to experience regional imbalance, rural and remote poverty, discrimination, hostility, crime and environmental degradation.
China’s Gini coefficient is 0.465 in 2018, ranking it 27th in the list of countries with the most inequality. The average Gini coefficient for the last 10 years in China has been about 0.482 which is approximately 67 percent higher than that in Germany. The Gini average for Europe is about 0.305, and is 0.351 for Asia.Some experts believe that if “gray” and “invisible” incomes were included in China’s calculation of the Gini coefficient, it would be even higher still. The Hong Kong Special Administrative Region ranks ninth at 0.537. The Gini coefficient is a good snapshot of the state of income inequality in an economy as a whole. It does not, however, reflect the differences between the eastern and western parts of China — most of the real inequality is in the west of the country.(https://www.daowen.com)
I arrived in China just after the beginning of the lunar year in 2007 for a one-year language and culture course at Zhejiang University and have spent the majority of my time from then to now living in Hangzhou. In a quarter of the time since economic reforms were rolled out, I believe I have seen many historical and amazing events during the time I have been in Hangzhou. To make purchases in Hangzhou in 2007, my knowledge of localities and language skills were weak at that time, I had to find out where to buy something I needed, how to get to that place, and once there, it took much time browsing before a purchase could be made. Haggling about the price was also expected at any place outside of large department stores. Back then smart phones were not widespread, and in any case, I did not have one. So unlike these days in Hangzhou, I was not able to just use any online purchasing platforms. Now I usually use Taobao on my phone to make purchases and have my item arrive at my door sometimes as quick as next day. One of the great features of such platforms these days is that it is not just conventional goods such as clothes and books that can be purchased, but also almost any conceivable product is available. I can, for instance, use such apps on my phone to purchase groceries online, pay all my bills, book services, transport or specialist medical appointments.
It is amazing to ponder that in most parts of the world, even in many developed countries, such conveniences are still out of reach. However, in the early days of Taobao use, especially for foreigners, to make purchases one had to recharge one’s account with coupons bought at the post office, use online banking(which required a password dongle, and you could only use the IE browser on Windows, since you could really only use Bank of China). These days, Taobao and Alipay are apps. Bank cards can be linked to one’s Alipay account and mobile payments can hence be made easily. Hangzhou is now truly what I would call a 95 percent cashless city. Almost all vendors of products and services (in the recent couple of years many government agencies such as traffic authorities and hospitals have also joined the mobile payment party) accept mobile payments. Just a few years ago, Alipay and WeChat mobile payments were not widely accepted, not even in Shanghai. I am very happy to have witnessed how Hangzhou has led the way in mobile payment use in China and, I dare say, the world.
Another fantastic feature of mobile payment is its coupling with public transport and QR barcodes. The recently added subway in Hangzhou and public buses accept mobile payment via a virtual QR code. This makes public transport use very convenient and user friendly.
The Alipay app is a mobile payment platform, but it is also a collection of smaller apps with special functions. For instance, I use Alipay for all mobile payments, transport, booking flights and long-distance train tickets, paying my bills, calling a taxi, paying traffic infringements etc. As a foreigner using Alipay, some of the features will not work for me as I do not have a national ID number in my digital profile stored on the Alipay server.
One day I was out and wanted to take a bus. I had checked on my map app and the bus was indeed the most convenient way to travel. At that time, I was using the subways with a digital pass but wanted to try the bus. I arrived at the bus stop and the bus was there, so I jumped on and thought I would just set the digital bus pass up on the bus and scan it once set up. To my embarrassment, I was not able to set it up successfully, I rummaged through my bag for some coins but had no cash on me. Luckily,a nice lady saw what was going on and gave me a few coins for the bus fare. I thanked her and explained what I was doing and offered to transfer her the fare, but she said “Don’t worry about it.” After I finished the meeting, I posted a WeChat moment about my bus trip and tagged several people that worked at Alipay (Ant Financial). A message was left on my post that they would look into it, and within less than a week, sure enough, I had a digital bus pass.
I go back to Australia once or twice a year, and every time I am lining up to make a purchase, I reach for my phone instead of my wallet. Although Hangzhou, with its very good public transport system and excess of shared bicycles, is great, some days I nevertheless need to make use of a car. I was very proud at the beginning of 2012 when I worked out how to transfer my Australian driver’s license to a Chinese license and passed the Chinese language computer-based 100 MCQ road rules test on my first attempt. When I first started driving, I noticed that many drivers were disregarding road rules, safety and consideration for other people. The driving culture these days is much better than it was, say, five years ago. One main reason for the improvement is the surveillance cameras and new road rules in place. Paying a fine for breaking the rules is not the main factor motivating better behavior on the road; rather, it is the point system that really raises awareness among motorists. One interesting road rule that is now being enforced in Hangzhou is that cars are to stop to let pedestrians across the road at pedestrian crossings. As a motorist, if you do not stop, you fear a fine and a deduction of points. Smart cameras at crossings are monitoring behavior. Since the roll out of all these smart cameras for detecting every conceivable infringement, driver behavior has improved greatly in Hangzhou.
More cars are made in China than any other country, and while more gas-guzzling SUVs are being sold in China, the production of hybrid and electric cars and new energy vehicles is also on the rise. The government is promoting their use by giving subsidies to consumers, such as cashback discounts and reduced license plate registration fees. License plate registration fees for new energy vehicles are free in Hangzhou, whereas for internal combustion engine vehicles, the fee is around 40,000 yuan. The government has forced restrictions on car manufacturers to up their production and promotion of new energy vehicles. The manufacturers seem willing to bear the cost only because the car market is so large and becoming larger. Hangzhou has had hourly rentable electric cars since 2013. I cannot think of any other place in the world where I have seen more new energy vehicles than in Hangzhou.
Although from my experience living in the east of China has many pluses, there are still many soft-type social problems that need to be addressed and improved in areas of personal information protection, protection of children and gender inequality,and I think these problems will be addressed and fixed by the younger generation, a generation that has experienced prosperous economic times, better education, internet, and unprecedented openness. I believe the next 10 years will be even more exciting and yield greater achievements.