How China turned 1.4 billion people into 1.4 billion consumers

China is the world’s largest e-commerce hub. Even remote villagers are turning into online shoppers. In fact, one in every three of China’s 1.4 billion people shops online. And Jack Ma, the founder of Alibaba Group, has become a national e-commerce hero.

Why and how did this transformation come about? Chinese leaders realized that an export-led economy has its limits. China’s GDP growth had been built on exporting cheap goods, meaning that the nation’s economy was directly tied to the consumer purchasing power of foreign countries.

The situation was not sustainable. As labour costs increased with rising worker wages, the Chinese leadership realized that a pivotal change would be needed to keep China from falling into the so-called middle-income-country trap. It decided to capitalize on China’s 1.4 billion people. Why not turn them into 1.4 billion consumers?  This is exactly what it did by fostering a booming e-commerce industry. Going everywhere from a “Taobao village” in Zhejiang to the homes of consumers in rural villages, the first episode of China: The Great Dragon follows the volatile fortunes of e-commerce entrepreneurs in the lead up to the single largest Black Friday sale in the world — the November 11 Singles’ Day sale.

China’s economic transformation hasn’t simply created domestic consumers; it has also led to a boom in start-up companies. How do these new start-ups raise a lot of investment money fast?  They turn to the burgeoning internet-financing sector, which includes firms that specialize in raising capital within hours from private investors. Fostering innovation is part of the leadership’s grand plan, Made in China 2025. Has the time come for China’s own Silicon Valley moment?  As the second episode of the series makes clear, the answer will depend in part on how well the leadership is able to regulate the wildly competitive terrain of start-ups.

Diana Fu, host of TVO's China: Here and Now documentary series, is an assistant professor of Asia politics at the University of Toronto. She is the author of Mobilizing Without the Masses: Control and Contention in China.

China: Here and Now is a major, multi-part documentary series that examines the cultural, economic, and political implications of China's growing global influence. It airs on TVO Tuesday nights until November 13. Or, stream it at TVO.org.

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