China now the cashless society

Our Beijing correspondent discovers that to travel to China is to take a journey into the future.

In China your mobile phone is your wallet. Picture: AFP Photo / Wang Zhao

I was prepared for some rigorous questioning during the interview for my residency as a foreign correspondent in China, but the one about the drone was a surprise. As the official handed me a piece of paper, my assistant translated: “Are you intending to operate a drone?” If so, I would need a specific licence, he explained.

It’s the sort of exchange that tells you just how much this vast country has changed. I have been to China many times since my first trip in 1978, when it was full of people wearing blue and black Mao suits, streets lined with revolutionary posters, eager workers wearing red scarves, and wide-eyed locals who stared at the foreigners – particularly those with red or blond hair. A trip to China was a journey into

a rural past as cyclists ambled along dusty roads amid the occasional truck belching smoke.

Forty years on, to visit China is to look into the future. My apartment no longer has a fixed-line phone and the one at the office is disconnected. There are ballpoint pens on my desk, left by the previous correspondent, who brought them from Australia, but today the Chinese write on their phones and there is little demand for biros. We visit an electronics store to buy my mobile phone. It is in a small mall three storeys high. It looks half-deserted, with many shops closed, a legacy of the rise of online shopping.

Ten years ago, when I was in Beijing for the Olympics, officials proudly announced that for the first time electric buses would ferry people around. Today electric cars, buses and bikes are the norm here, and there is an almost eerie silence in the streets. You can no longer rely on noise to tell you a car is approaching.

China is also moving beyond email, with most social interaction now done on WeChat, China’s version of WhatsApp. It allows for fast, secure communication, less susceptible to the censors and faster than email. There is also more use of photos and videos. And WeChat offers other services, turbo-charging China’s massive e-commerce market with a PayPal-type system.

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Daily purchases are made online, usually on mobile. There is also Alibaba’s online payment system Alipay, and a host of others. And your mobile phone is your wallet. Buying goods at the supermarket? Just hold up the phone to the scanner. Going out to dinner with friends? WeChat allows you to each pay for your own meal with no cash changing hands. Buying a drink from a vending machine? Hold your phone up to the scanner on the machine to pay.

Chinese society is going cashless even for the smallest of transactions. Australian Sue Reimers, who now lives in Shanghai, has seen it first hand.

“When I arrived in China five years ago the country was cash only,” she says. “Not even credit cards were used. Foreign credit cards could be used in the larger hotels, but that was about it. I had to withdraw huge numbers of notes from the ATM and plan the day carefully to make sure I had sufficient funds.

“Today, life in a Chinese city is quite different. The standard of living is much higher and everyone has a smartphone that is used to make direct payments from their own account to another account simply by scanning a QR code.

“The current Chinese cashless society is very similar to what we have in Australia where you pull out your plastic card and use Paywave. There are no fees ... and the transaction is done without releasing the details of your own account.

“I use my phone to buy everything, even a cheap bread bun at my local corner store. I have no need to use cash to pay for anything.”

The cashless society also reduces the black economy, allowing more transactions to be recorded and taxed. But the government and retailers are also able to track what you’re buying.

“I do worry about Big Brother,” says Reimers. “Everything you spend your money on in China is recorded to a much greater extent than Australia. It is scary when you see reports on the data that is actually collected and collated.”