CHAPTE.R 5 The revitalization of the marketplace Food Markets of Nanjing Ann veeck Arnong the more visible and colorful outcomes of the reforms of the ig8os and 1ggos in urban China are the lively food markets. Though some schol ars have implied that the term"socialist market economy"is an oxymoron skeptics need look no further than these markets to see miniature socialist market economies functioning in full, vibrant health. A complex blend of state management and entrepreneurship, the markets are a vivid contrast to the prereform state food stores. People still recall standing in line to buy pro- ME DEVIxj duce of low quality and limited variety and being treated in a surly manner i alfe to boot. Privatization of the agriculture sector improved distribution systems, technological innovations, the liberalization of trade regulations, and com- petition among food retailers has resulted in active commercial areas, where wholesalers, retailers, farmers, consumers, and the state mix to engage in economic actvity. Beyond being some of the more visually conspicuous centers of commer- cial pursuit, food markets also provide a public fc orum In which to explore how the reform era has transformed the private lives of individuals in urban China Food has long been recognized as a central vehicle for analyzing iden tities, roles, relationships, rituals, ceremonies-in short, all that is important in human lives. Through activities relating to the acquisition, preparation and distribution of food individuals communicate the nature of their rela tionships with others. During the Mao era of food rationing and communal agriculture, choices related to food consumption were quite limited, stifling this fundamental form of communication. In urban China in the 1 ggos, the new abundance of food choice reaffirmed a leading role for food con- sumption behavior in the establishment and maintenance of relationships 1.Douglas 1g84 and 1975
108 ANN VEECK The high profile of food markets, not only as economic centers but also as hubs of socially significant activities, makes them useful places to investi- gate the societal implications of changing consumption patterns. The focus of this study is the food markets of Nanjing, the capital and largest city in Jiangsu Province. The research is part of a larger study of changing food con- sumption patterns carried out during the 1995-96 acadenic year in Nan- ing in collaboration with the School of International Business of Nanjing University. Standard ethnographic field methods were used to place food shopping patterns in their full environmental context This study draws from extensive interviews with 7o informants, which were audiotaped and then transcribed, as well as from interviews with retailers and structured obser vations of food shopping trips and focus groups. In addition to these quali tative methods, a random household survey of 320 Nanjing primary food shoppers was conducted in order to quantify the incidence of food shop- ping activities among Nanjing residents. Taken together, these research meth ods allow the examination of food consumption activities in Nanjing from a number of perspectives Specifically, the purpose of the study was to investigate the formation of newly emerging or re-emerging values and relationships in China, with the urban food markets serving as the sites of investigation. The chapter first de- scribes the rather recent tansformation of the food retail industry in China and the amount of time and money that is spent by the primary food shop- pers of households engaged in food consumption activities. Next it exam- ines the role of the state in the management of food markets and the effect of state-imposed regulations on the expression of choice by the consumer. The following section addresses the potential for food markets to become centers of social activity among consumers and explains why this promise has not been realized in Nanjing. The chapter then explores how food mar kets contribute to the maintenance of valued relationships by reinforcing shoppers'ties to family members. The final section of the chapter discusses the future of Nanjing food markets, including the role the state is likely to assume in their management, and discusses how future changes will ulti mately affect the expression of choice by the consumer. It is hoped that the findings from this investigation will enrich our understanding of the for- mation of relationships and values in urban Chinas changing consumption landscape THE TRANSFORMATION OF FOOD MARKETS Any study related to food in China would be negligent not to acknowledg the central position that food has traditionally occupied in the Chinesc cul- ture. The celebrated position of food in Chinese society is shown in the lan-
REVITALIZATION OF ' THE MARKETPLACE guage(the Chinese word for population. nkou, is literally translated as"pec- se s mouths), the arts, religious ceremonies, rites of passages, and business exchanges. The reverence of the Chinese to practices surrounding food con- sumption can be traced back at least 3, ooo years. 2 In the decades between 1949 and 1979, food could not occupy its tadi- tional elevated position in people's lives. The state exercised complete con- trol over the food system of China, froin the farms to the systems of distrib uton to the retail outlets. The state even dictated consumer choices to a large extenT, by controlling agricultural activity and rationing most staple prod- ucts, including oil, rice, meat, and bread. During these decades of austel ity and rationing, agricultural activity concentated on grain production and an extremely limited number of vegetables Although a small number of di- verse varieties of vegetables grown in household plots adjacent to urban ar- eas sometimes trickled into the cities, produce choice was by and large re- stricted by season and variety. During the winter season, the vegetable selection of northern residents often consisted only of potatoes, cabbage, and turnips. Reports froin this period include clains that consumers would leave their baskets in front of a food counter the night before to hold their place in line to buy a poor selection of vegetables. In a remarkably speedy turnaround, Chinese citizens today enjoy a boun- tiful variety of foods from which to choose as well as a transformed food re- tail infrastructure. It would be hard to understate the depth of these changes As Zha writes, " this is probably the most savored aspect of the current chi- nese economic prosperity: suddenly there is so much to eat! The variety and number of food retail outlets exploded during the reforms of the Igos and 19gos. The changes include greatly expanded food markets, as well as a proliferation of small private grocery stores, supermarkets, bakeries, poul- try stands, and other specialty food outlets As the retail infrastructure changes in China, so has the service that is provided In the past, few food retail outlets featured self-service. Instead con- sumers had to point to the desired products and wait for a clerk to retrieve the items. Today the newly built supermarkets and bakeries are self-service. and customers are free to roam the stores and examine the products. A ves- tige of the past. however, is that very few retailers offer credit, and consumers generally must pay for their purchases with cash. Still, automatic-teller ma- chines(ATMs) have appeared in major cities, and these cash machines, along with the pubescent credit card industry, are indicators of changes to come. 2. A number of books have described various facets of the food culture of China, includ- ng the rituals of historical dynasties, the portrayal of food in the arts, and the etiquette of food Among the most comprehensive are E. Anderson 1988: Chang 1977: and Simoons 1991 3. Tang and jenkins 1g9 995,p
ANN VEECK The greater choices in food for Chinese consumers include both fresh food and processed food. Improvements in the distribution and trans- portation infrastructure allow food to be distributed throughout the coun- try and imported from other countries. Farmers and vendors are becoming more aware of consumers'desires and have begun to respond to demands For example, according to seasonal preferences, vendors offer cut and pre- pared food items for use in huo gwoin the winter and wild vegetables in spring Altogether, there is a greater congruence between consumer needs and prod- uct offerings Once limited in supply, packaged food of many types is now readily avail- ble in China. International packaged food corporations such as Procter &e Gamble, Philip Morris, and Quaker Oats have steadily increased their pres ence in China, competing alongside chinese food companies with brand names such as Maling, Lion Brand, and Pagoda. Independent importers, wholesalers, and retailers increasingly represent a major force in the food distribution industry of China. Production of Chinese frozen foods, reported at 2.2 million tons in 1g96, is projected by the ministry of Agriculture to in- crease fourfold to 8 million tons by 2000. 7 The expansion of choice for Chinese consumers is readily apparent in the newly transformed markets of Nanjing. Nanjing has 61 major food markets scattered throughout the residential areas in the city. Results of the house hold survey show that most households are within 50o meters of a market and almost all families live within 1, ooo meters of a food market(see Table 5.1).As in other urban areas of China, the alternative food retail options, both state and privately managed, that have emerged in Nanjing in recent years include supermarkets, bakeries, cooked poultry and meat stands, and maibu( kiosks). Still, the food market remains the primary outlet for the food needs of Nanjing households. The use of food markets for household food shopping is a matter of choice, rather than convenience, since by 1996 virtually all food markets had a supermarket nearby Owing both to histori- cal lines of distribution and to the attitudes of consumers, only the rare su- permarket attempts to sell fresh produce. Instead, supermarkets concentrate on packaged goods, including staple condiments. soft drinks, snack foods, canned goods and lavishly packaged gift items. Many supermarkets are part of state-owned chains and often occupy the spaces formerly held by the state- owned grain and oil stores of the days of food rationing and coupons Food markets are located in a variety of places. Some are housed in large warehouses or seicovered pavilions, some occupy a crisscross of alleys, and others take over entire streets. At present, even the smaller Nanjing markets 5. Zhou Yiling 1996: Li Dingqiang 1996 6. McNicl and Nilsson 1994. 7. (lar Thinking Agmirultur Naumltl 1997P
REVITALIZATION OF THE MARKETPLACE TABLE 5. I Distance of Nanjing Residences from Nearest Food Market, 1996 Distance(in meters Percent 100 or less l0l-250 25l-500 50l-l,000 >1,000 053 NOUKGE: Authors surve feature a wide variety of vegetables, pork, and fish year round. The bigger Nanjing food markets can easily rival large Western gourmet supermarkets in variety and breadth Increasingly, semiprocessed convenience items are appearing in many of these food markets. Jiaozi pi(dumpling wrappers). ground pork, and fish balls are common In distinct departure from the past, some Nanjing food markets are known for their specialties, such as exotic seafood or gourmet tofu, and for special occasions shoppers will go consid- erable distance to procure these treats. The food markets also often feature food that has been cooked and prepared, most frequently baozi, mantou, youtiao, and shaobing. Many food markets incorporate (or at least tolerate) vendors selling complementary itens such as sewing notions, housewares, and clothing. The food markets tend to attract other businesses in proxim- ity, particularly restaurants, pharmacies, and general stores Most food markets open at about 6: 00 in the morning and remain open until about 6: o in the evening, or until the final food shoppers have returned home to prepare their meals. The vendors usually procure their produce from wholesale markets the preceding evening in preparation for the fol- lowing day or very early in the morning before the market opens. The p times for shopping are at 7: 00 A M. before the workday begins, at 11: Oo AM before lunch, and starting about 4: o P. M. when people begin to leave work. Still, except for a slow period from about 12: o to 2: 00 P. M. when any ven- dors and consumers nap, the markets remain active all day long. Retirees shop at all times of day, factory workers have diverse work schedules, and some state workers take breaks from their jobs to do their daily shopping Except for the ceiling prices for specific types of produce that are set by the state, few venues of economic activity anywhere in the world come as close to a model of perfect competition as these food markets. All major food items are offered by multiple vendors within each market, so consumers have a 8. Banzi are steamed stuffed buns: mantou is steamed bread; youtinn is deep-fried dough ndung is baked bread
ANN VEECK TAblE 5.2 Food Expenditures as a proportion of Household Income, Nanjing, 1996 Mean household Percentage of Number in samp Household income food household income (olal-330) ( monthly in rmb)·( monthly in rmb)· spent on/od 750 or below 501 380653 75l-1.000 l,001-1,500 611 l.50l-2000 690 7609 2,001-3,000 811 s,00】 or above 91 12 18 At the time of the survey i rmb= U.Sfo125. SOURCE: Author's survey chance to compare quality and price. Prices are established through negoti- ation by each vendor with each consumer. Paying the "proper price"for food items requires some skill on the part of the consumer, since the price depends on a wide range of factors. These factors can include the season of the year, the time of day, the freshness of the food item, the place of origin of the food item, the weather condition at the time of purchase, the market in which it is sold and the price set by the competition in the immediate vicinity But the most notable characteristic of Nanjing food markets is the amount of time and money that Nanjing consumers spend at these sites. My survey of Nanjing households in 1996 found that the mean amount of time spent food shopping by primary food shoppers was almost six hours a week. In ad dition, although this proportion is expected to decrease in the future with growing incomes and increased sp old spending in Nanjing was allocated the mid i ggos, a full half of househ to food, a figure consistent with the national average. A closer look at these statistics, however, shows that while 52 percent is the average proportion of household budget allocated to food. the percentage spent by individual households varies greatly. Table 5.2 shows how food budgets change with in- come level. As expected, as incomes rise, food expenditures also increase Even more dramatic, however, is the inverse relationship between income level and proportion of income spent on food. The lowest-income house holds spend 77 percent of their budget on food, and the highest-income households only 18 percent. This disparity shows that higher-income indi viduals tend to use their extra income to supplement expenditures other than the familv meal 9. World Resources Institute 1994
REVITALIZATION OF 'TIIE MARKETPLACH THIE STATE AND 'THE MARKETPL.ACE The food markets in Nanjing provide a vehicle for studying the complex, si multaneously cooperative and competitive relationships that developed be tween the state and private enterprises throughout China in the i ggos. Each food market is a collection of hundreds of individual entrepreneurs. Thev are regulated by a commercial administrative office that is a branch of the government, which in each market is responsible for licensing vendors, pro- lecting legal transacTions, protecting the rights of consumers, mediating dis- putes between vendors, and maintaining the cleanliness of the market. Al- though the state no longer issues food coupons to consumers, the influence of the state in the food purchases of consumers is still visible and profound When the"free"markets for food first appeared in Nanjing in the early 1g8os, the vendors were farmers who brought their own wares to the nar- kets, selling the produce that they had grown in excess of their commitment to the state at whatever price the market would bear. By the mid igos,ow- ingto the monthly fee of several hundred renminbi to rent a space in the market, the farmers had been largely replaced by middlemen who buy pro- duce at Nanjing's wholesale markets. Although many of these middlemen are froim farm families, often from northern iangsu or nearby Anhui Pro- vince, they sell other families' crops that they acquire daily from Nanjing's wholesale market 1o Some food markets in Nanjing provided a special area where farmers could vend their own wares for a daily rate. Consumers often preferred to buy di rectly from the farmers, believing that farmers are more trustworthy than ven- dors. Yet it seems clear that in the future consumers will have fewer oppor- tunities to buy directly from farmers as commercially organized middlemen take over the vendor spaces. In 1996. when the then biggest indoor food mar ket opened in Nanjing, the first of eight planned for that year, businesspeo- le from Shanghai, Suzhou, and guangdong had ordered counter space. The state also played the leading role in deciding where new markets were to be located and which markets were allowed to operate. In older neigh- borhoods, markets were usually conveniently located and within bicycling or even walking distance from peoples homes. In the newer residential ar- eas, food markets were distributed much more sparsely. The location of food markets has a fundamental effect on the food shopping patterns of con- 10. Qu Huahan and Yuanshen Wu 1996. In the i ggos farmers could be seen arriving at the Nanjing food markets, sometimes carrying hundreds of kilograms of vegetables on their shoulders. Because they risked being fined by the market administrators for sellin ng wares illc gally. these farmers often were forced instead to sell their wares to the market vendors for low prices to avoid paying a fine and having their goods confiscated 11. Wang Yong and Zhi Long 1996
ANN VEECK sumers:logically, consumers who must go greater distances to shop make fewer trips a dramatic example of the state's role in the management of food mar- kets was the decision of the Nanjing government to shut down the gulou (Drum Tower)Market in 1997 to create space for a new Sino-American re. sort hotel. The Gulou Market, established in the early 1g8os, was Nanjing's first free market. Offering housewares and clothes as well as food, the mar ket had functioned as an inexpensive alternative to the upscale stores in the commercially developed Gulou district. The market was well-patronized by the lower-income residents in the area and the students of nearby universi- ties. When asked if this change was in the best interest of the consumers, the manager of the administrative office of the Gulou Market responded: This kind of market is truly not suited for the growing market economy. It's bound to disappear. But anyway, residents are not very happy about a hotel being built here, because many will have to change their living residences to make room for the hotel The composition and even the layout of the markets is also determined y the local government In 1996 the Nanjing Trade and Business Bureau decreed that all 6i of the outdoor food markets within the city limits must be enclosed within the next few years. 2 The purpose of this decree was to improve the sanitation and cleanliness of the markets. It would also provide a safe place for vendors to leave their wares overnight. The change was also certain to affect the atmosphere of the market in fundamental ways. since enclosing a retail area can affect frequency of purchase, purchasing behav- ior, product offerings, and prices IS For example, it is highly likely that the extra entry and exit barriers created by enclosing the markets will cause many customers to make fewer food shopping trips. It is a certainty, though, that moving the food markets indoors will affect experiential aspects of the food shopping trip for Nanjing shoppers The state also played the leading role in regulating the sanitation of the food sold at markets. The government developed the rules of sanitation to which food manufacturers and retailers must adhere and then decided how and when to enforce them according to its resources, motivations, and whims. Food manufacturers and retailers that were found to be engaged in unhy. gienic practices might receive a warning, be fined, or be shut down,tem- porarily or permanently. These infractions were then frequently reported in the state-controlled media, sometimes in frighteningly colorful detail. For example, one 1g96 newspaper article reported that some bakeries were il- legally reusing icing from cakes that had reached their expiration dates, mak- ing the cakes on filthy counters, and working in rooms with spider webs on 12. Zhu Gongbing 1996. 13. Sce. for example. sherry i
REVTTALIZATION OF THE MARKETPLACF 15 the walls. 4 Another article reported that in a routine inspection of cooked meat products bo percent of packaged cooked meat, 8o percent of unpacked cooked meat products in stores, and 87 percent of unpacked cooked meat products on street stands did not meet the government's standards for hy- giene. "The majority of unqualified products were contaminated by bacte- ia, "the article explained. SIn the first half of 1996, the widely read Yang wanbao(Yangzte evening news)reporled several times a week on retailers or manufacturers that had been found to be engaged in unsanitary practices in the Nanjing area. Not surprisingly, these media reports affected the pur- chasing choices of Nanjing residents. One 24-year-old female avoided pork for a time after reading that nuch of the pork sold was not sanitary. Several other informants renarked that they tried to avoid buying processed foods because they doubted the quality of factory-made products An interesting twist in the relationship between the state and the vendors at food markets was that the government sometimes operated its own booths, which competed directly with the independent food vendors. Consumers comparisons of state and privately run booths mirrored their ambivalent at- titudes, in general, toward the privatization of the economy. Although con- sumers expressed an appreciation of the new choices offered as a direct re- sult of privatization, they still preferred to buy from state- run booths Consumers believed they were less likely to be cheated at state-run booths, where the vendors had no incentive to overcharge consumers. Finally, to control inflation and growth, the government established the maximum prices that vendors could charge for most fresh produce. These ceiling prices were printed regularly in newspapers and posted on large signs at the market entrances vendors were free to set the prices of their wares as low as they wished, but they could not legally exceed the price ceilings. In 1996 in Nanjing, during the Spring Festival the government even lowered the maximum prices for food, meat, eggs, vegetables, and fish ALLIANCES IN THE MARKETPLACE Researchers who study open-air markets in areas of the world outside asia have described the informal communities that can develop among the ven- dors and the customers. Studies of food shopping in developing countries emphasize the social value to consumers of making daily excursions to the market. Public food markets have been found to be centers of social activ. 14. See, for example, Hirschman 1984 15. Hua Li and Xiao Ding 1996 16. Yi Qiang and Wang Yi 1996 17. See, for example, Sherry iggo. Pp 13-15: Richardson 198
116 ANN VEECK ity, providing a daily opportunity for consumers to mingle with their neigh bors and form new friendships. Long-term, trusting relationships can develop between the food retailers and their customers, with both partners gaining economically and socially from the alliances. 8 Since most Nanjing food shoppers made frequent shopping trips, usually at the same time to the same food market(the one closest to their homes). one might expect the shoppers and vendors to have developed social net- works similar to the ones that have been observed at other nations open- air markets. The food markets of Nanjing would seem to have the poten- tial to become a public sphere that supports relationships beyond those of the family and the state. Yet in 1995 and 1996, little social activity could be observed in Nanjing food markets between customers and vendors Extended alliances can provide benefits for both partners in exchange relationships. As transactions move from discreet exchanges to relational ex- changes, buyers and sellers alike experience less risk and more satisfaction in the exchanges. But the main ingredient necessary for relational trans- actions to develop is trust without trust, transactions are necessanly ex tremely restricted. 2 In the food markets of Nanjing that I observed, there was a distinct paucity of trust. almost all of the food shoppers expressed their distrust of the men and women who managed the booths from which they bought their fruits, vegetables, meats, and other staples. A 52-year-old shop- per explained her choice of a particular vendor by saying, I like to buy pork from this man because, compared to other vendors, he's fair Of course. he also cheats, but he cheats a little less than the others A few shoppers had established relationships with particular vendors and accrued benefits from those relationships, such as the ability to order spe cial products in advance, but most consumers were cynical about their rela tionships with vendors. The shoppers claimed that vendors cheated thein in a number of ways: by selling unsanitary or counterfeit products, charging unreasonable prices, and using scales that inflated the weight of products This last practice seemed the most prevalent. To defend themselves against these dishonest vendors, many consumers brought their own scales with them to the market and reweighed products themselves, particularly more costly items. Many claimed that they weighed everything with their own scales be fore paying for their produce. One consumer felt that it was enough just to show vendors that she carried her owm scale to be confident that she would De c harged fairly Some food markets placed a public scale prominently in the middle of 18. See Goldman 1974: Kaynak 1g85: Kaynak and Tamer 1g82: Yavas, Kaynak, and Borak 19. Dwyer. Schurr and Oh 1987: see also Mac Neil 1980 20. Schurr and Ozanne 1985: Douglas 1g89