Bulletin November 2018 (Vol. 20 No. 1)

There are important questions here about the bigger workings of China’s economy – about who is afforded credit and who isn’t and what is meant by inclusion. Dr Tom McDonald Digital money, in the form of Alipay, WeChat Wallet, QQ Wallet and the like, is both changing and reinforcing the social function of money in China and the role of institutions in workers’ lives. MIGRANT WORKERS EMBRACE THE DIGITAL WALLET platforms with both arms, even older workers and those with limited literacy skills. Convenience and visibility The workers told Dr McDonald and his team that they were attracted by the convenience of digital money because they could pay bills and other transactions through their phones. They also liked the visibility of their money because they could check their balances and transactions online and had the option of seeing interest accrue every day, even if it was just a few mao [cents], on Alipay’s Yu’e Bao platform. “Many workers are thinking of ways out of factory work and would like to learn more skills or start a business, but it’s very risky using your own money. We’ve had workers say, at least if I keep my money in Yu’e Bao, I can see it grow every day,” he said. Workers also perceived the platforms to have different qualities that reflected social relationships. WeChat Wallet was regarded as a place for exchanges between friends and for small-scale purchases, QQ Wallet as less trustworthy because it tends to have larger numbers of contacts who are outside the user’s usual circles, and Alipay as the most trustworthy, especially for large purchases, Money plays a clear key role in establishing and sustaining social relationships in Chinese culture, being handed out every Lunar New Year, at weddings, births, funerals and any other occasions where a red packet is associated with auspicious fortune. But what happens to this function when money substantially changes form? That question is at the heart of research by Dr Tom McDonald of the Department of Sociology, who has been studying how migrant workers in Mainland China are jumping onto digital money platforms. He and his team initially studied mostly young male workers at a Foxconn factory and more recently shifted to a smaller factory in Shenzhen that has workers of different ages and even families living in the dormitories. “We’re trying to understand how migrant workers are using this money, how it affects the relations and interactions in the factory, how it’s reshaping their everyday lives,” he said, along with whether the promise of greater financial inclusion from digital money platforms is being realised. The evidence collected over the past four years is that workers are embracing these ironically because it lacks connections to existing online social networks and therefore is seen as more ‘professional’. Alipay nonetheless has introduced some social functions, such as digital red packets (also offered by WeChat Wallet) that are used, among other things, to send money home if the worker cannot return for the Lunar New Year and to play a social game among friends who take turns posting red packets with tiny amounts of money to their chat group, which members compete to claim for their own. Alipay has also introduced Sesame Credit, a credit rating system that lets people see how much they are eligible to borrow through its Ant Spend Now function. The latter operates like a credit card by letting people make purchases and pay later, with the first month interest-free. “Migrant workers in factories traditionally have not been afforded credit cards so this is an example of people getting their first taste of formal credit,” Dr McDonald said. Relationship factors Yet workers are not necessarily ready to give up the informal credit channels that are based on social relationships, such as family, friends and rotating credit associations between groups of people. Some said Ant Spend Now made it possible for them to lend cash to friends in need because they could put their own purchases on credit. Dr McDonald said that apart from social relationships, the different uses of digital platforms reflect the workers’ relationship with the state and institutions. Workers borrow from Alipay – a private company – because the state-owned banks and rural credit cooperatives tend not to lend them money. “There are important questions here about the bigger workings of China’s economy – about who is afforded credit and who isn’t and what is meant by inclusion,” he said. The platforms also reflect how people are perceiving their own lives. Young people worry about financial autonomy and do not want to rely on their parents for money or borrow from people in their home town, who might gossip about them. This links to a deeper trend in the country. “There’s quite a lot of research about growing individualism in Chinese society. Digital money itself might not cause that but it may be a way to reflect those ideas,” he said. Reviewing participants’ digital wallet transactions helps illuminate money’s social purposes. 09 | 10 The University of Hong Kong Bulletin | November 2018 Cover Story