So How is Huaxi so Rich?

This is part of a series, it starts here with my trip to Huaxi village

The whole experience raised more questions about Huaxi’s socialist success than it answered. Most of the Chinese people I have talked with know about the village, are quick to repeat that it is the richest village in China, but I’m still stuck on how exactly it became so rich.

I have a few different theories, which as usual, I’m happy to share with you.

The Government has paid for the whole thing.

Or at least that was my initial reaction. After all, how could it possibly be that simply through hard work and “advanced” agricultural techniques that a village could possibly get rich enough to build all of these villas? Also if these practices were so effective, wouldn’t every village in China be rich?

America? China?

I’m still not entirely convinced that Huaxi didn’t start out with some pretty generous loans, but why would the government continue wasting so much money on a model village that hardly any foreigners visit?

Socialism really is wonderful.

As I mentioned briefly yesterday, Huaxi’s creation myth fits so neatly within Party dogma, it’s almost hard to stomach. However, the villagers really do seem to enjoy living in a place that is far more socialist than the rest of the country. They work 7 days a week with only 2 days off per month, but in exchange for that they are entitled to a villa, a car, health care, food and many other necessities.

The villagers also own many of the factories, and at least as far as I could tell, were involved in several of the decisions that have helped the place to prosper. There also seems to be little dividing rich and poor. These aspects of the village really impressed me, and I’m sure that wasn’t by accident.

Socialism only works on a small scale.

So ultimately the lesson I think I can take away from the model village is that socialism really can work, but for it to work there are a lot of requirements.

The most important aspect is controlling the population, becoming a resident of Huaxi is extremely difficult. If the town was open to migration, than I highly doubt that the residents would be able to maintain their standard of living. Also if a person decides to leave Huaxi, they also leave behind all of their wealth. So because most of the people who live in Huaxi are decedents from other residents, their money does not leave the village like it does in so many other parts of China.

Additionally, Huaxi has no problem employing migrant workers from the surrounding areas, these people though are not entitled to all of the benefits, and this helps keep factory costs low enough to spread the profits around between the villagers.

Finally, tourism has become a major asset of Huaxi, with more than 2 million visitors each year. This helps bring in millions of rmb if not billions. If it weren’t a model village, it would be very difficult to maintain this level of interest, nor would factories be so keen to invest.

Talking with my co-worker today she admitted that really China can only have one Huaxi, because it gains so many advantages from calling itself the #1 Village in China. If it was simply the socialism, all of the surrounding villages would be rich, instead there is this:

The buildings pictured here are a few hundred meters outside of Huaxi

I hope some day all Chinese people can enjoy this lifestyle, but until that becomes a reality, Huaxi village seems more like a cruel joke than a beacon of hope.

Tomorrow we’ll be looking at another surprising discovery I made in Huaxi.

7 responses to “So How is Huaxi so Rich?”

  1. Matthew Stinson says:

    Great post.

    The spirit of Dazhai lives on.

  2. Thank you, I am learning a lot.
    Do they handle with environmental issues there? I am really interested in how different cities in China deal with environment, recycling. Recently I have heard of the good handling of those aspects in Hangzhou.



    • Tom says:

      The air quality in Huaxi was pretty awful as you can see in the pictures. one of the first factories they opened up there was a steel mill, which causes a lot of pollution. This whole part of Jiangsu though seems to be fairly polluted.

  3. coke4light says:

    It was interesting to see your recent post on HuaXi Cun. Here’s a link to another villige- DaQiuZhuang(, you maybe think fun to do some digging about it.

    • Tom says:

      Thanks for the link. There seem to be maybe 5 or 6 of these kinds of villages around China, but I think I’m right in saying that it would be completely impossible to use any of these as a model for all villages in China. The system unfortunately relies on restricting immigration, and using cheap labor from surrounding villages.

  4. May says:

    I suggest you do some research about township and village enterprises. There are over 20 million of them. Huaxi got so rich because f this program. There is no mystery.
    Academics have known about them and studied abut them for decades.

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