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China Is More Capitalistic Than You Think

NEW YORK ( TheStreet) -- I was tired and exhausted as I sat down on the train for the ride to the Hong Kong airport.

Six days of non-stop meetings and factory tours -- while my body attempted to adjust to a time-zone opposite my own -- takes a toll. Trying to navigate four suitcases doesn't help either, but the guy sitting next to me on the train gave a very needed and welcomed helping hand.

Once the train was moving along, I asked what had brought him to China, as is standard practice for two Westerners greeting each other in the Middle Kingdom. I think he said he represented Altria Group (MO - Get Report), Phillip Morris (PM - Get Report), or maybe it was another American cigarette maker, it's hard to say. I was tired.

I commented that there are more Mercedes Benzes in the city of Hong Kong than in all of Wisconsin, and they are quickly moving north. He laughed and commented on how much different the border was when he started.

He was speaking of the Shenzhen-Hong Kong border. Shenzhen is the gateway border town to mainland China from Hong Kong. Hong Kong is part of China, but is treated as a separate autonomous area. Entering and leaving is handled as if it is its own country.

Shenzhen is a modern first-rate city, full of high-rise buildings and often called China's Silicon Valley because of its high-tech focus.

The cigarette seller explained that in the early 1980s, Shenzhen was little more than rice paddies with few buildings, and that when he crossed at night (carrying cigarettes that may not have been "fully sanctioned" for import), the guards would turn on the lights for him to cross the bridge.

You can visualize the transformation through these photos. The only difference between the old Shenzhen, from the Communist takeover in 1947 until 1980 and then from 1980 forward, is abandoning central planning and embracing free markets with private ownership.
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