This is China! blog

Xiao Lei is a 25-year old professional woman who works in Suzhou Industrial Park for an American company. Xiao Lei has nary a boyfriend, nor prospects for one. Her father especially hounds her about when she will get married. During Spring Festival this year she was especially harassed by relatives, as her youngest sister has been married a year and her eldest sister just got married to a soldier from their hometown, in Anhui Province. Unfortunately, she still lives with her parents, and many of her relatives live in Suzhou, too. Unfortunate, because she can’t rent a boyfriend to take back to her parents and relatives to relieve the incessant pressure oldergenerations apply to young people to marry and to pump out a kid. If her parents lived in another city, she could mollify their neurosis with a fill-in boyfriend. Or, for the guys, fill-in girlfriend. All expenses paid, of course.

The online “rental lover” industry has picked up considerably the last couple years in China as twenty-somethings are too busy or picky to find a partner on their own. Or, they simply want to concentrate on developing their career, which in China requires a lot of effort as their are likely a thousand other people ready and willing to take one’s job.However, renters can be exacting. The New York Times cited one woman’s requirement: they should be educated, employed, well-behaved and between 170 and 180 centimeters, or 5 feet 7 inches to 5 feet 9 inches, tall. Glasses — a sign of erudition to her father — a plus. Oneother thing: “Don’t be too skinny.” She was afraid of her relatives and friends considering her a “left-over girl”, a successful woman who cannot find a husband.

It seems supply is outstripping demand, though, with both young men and women offering themselves up to play mate to a potential renter. One candidate said he sure he knew he really should go home to visit his family, but the temptation to meet a pretty girl who would pay all his expenses was too tempting. Besides, she may be a potential mate for life.

One experienced rent-a-suitor suggested to other potential candidates to keep their requirements low. After all, he said, “The customer is queen.”

Further reading: China Daily

Past posts:

Phoenix Men and Peacock Women

Naked Marriages

“Straying Cows” Still Unable to Meet Bachelor Demands

Divorce, Chinese Style

The American Security and Exchange Commission (SEC) recently released a list of Chinese holdings in American companies listed on American stock exchanges total US$9 billion. Companies include: Apple, Coca Cola, Johnson & Johnson, Motorola and Visa. the source of the investments is China’s sovereign fund, the China Investment Corporation (CIC). Sounds like a lot of money from an investment point of view, but it’s not. For one, the CIC has US$300 billion to invest abroad. For another, US$9 billion is nothing compared to the U.S. stock of Foreign Direct Investment (FDI) of over US$2.1 trillion in 2007. The UK led the way back then with over US$410 billion in investments, with Japan number 2 at about half that amount.

Though China’s investment flow into the USA has increased 30% from 2004 to 2008, other countries have really been going to town buying American assets, with Spain accelerating investment holdings in the United States by 60%, India by 64% and the United Arab Emirates(UAE) by 210% to contribute to about US$94 billion in FDI to the States in 2008!

Don’t expect China to be making too many high-profile investments in the States in the near-future, either through the CIC or through the real heavy-weight, the SAFE, the StateAdministration for Foreign Exchange, which is actually responsible for over-seeing the U$2.1 trillion in foreign reserves. Instead, China is seeding much of its investments in its own backyard, in Southeast Asia, where the natives are more hospitable to Chinese money and overseas Chinese already have extensive networks; and in primary industries centered around mining and refinement of ores and petroleum. Private Chinese companies like to buy distressed companies (read: cheap), try to turn them around, and sell them on for a higher price after lifting important technologies from targets.

And why not: a bargain is a terrible thing to waste.

Further reading: CRS Report for Congress, International Trade Administration Presentation 2008

Past posts:

Managing Outbound Chinese Investors

Chinese Overseas Direct Investment Hits a Wall

African Terms of Endearment

China effectively spoiled the West’s attempts at the Copenhagen Climate Conference  at getting well-defined emissions targets and inspections. China achieved this by cobbling together a group of developing countries whose governments have always felt aggrieved the West had been exploiting their economic weakness to diabolical ends, and muting their economic development to eliminate competition. China was quite happy with the outcome, if local media is any indication.

Now, Vietnam wants to do the same thing in the politically and militarily sensitive Spratly Islands, just off the coast of China and Vietnam and the Philipines and Malaysia and Brunei, all of which lay claim to the island chain. The outcroppings of rock and the surrounding waters have been found rich in oil and natural gas. China does not like other countries using the same strategy it used in Copenhagen.

China has already sent its naval vessels to patrol the area, much like a dog marks his territory, and has set up a “research” station on one of the islands. The Chinese navy has also captured scores of Vietnamese fishermen who ply the waters in the area and confiscated their boats.

China knows it needs to tread warily outside its borders, lest it find itself bound by its Lilliputian neighbors who are taking grave offense at Chinese adventures.

Further reading: NYT

Last time I was in old Shanghai to buy a couple prints I was expected to pay for my purchases. Which I did, as I was able to bargain the accommodating proprietress down on price to an ego-soothing level.

Sotheby’s, though,  has been having a devil of a time getting paid for items Chinese new-money has been winning auctions for. Most high profile are two mainland Chinese buyers who failed to pay for five Chinese paintings and an antique incense burner for US$270,000. Of course, it was Christie’s who hosted the auction last year in which a Mainland dealer won the bid for two zodiac statues taken from the Summer Palace in 1860. Though he won the bid, he did not have any money to pay for his “patriotic” act, nor did he have the government’s patronage in what turned out to be a career-ending move for the former art dealer.

In 2008 Sotheby’s had to sue a Mainland buyer for payment; and in 2006 a Chinese buyer over two Chinese paintings.

Sotheby’s puts the lapse in good manners down to the lack of experience Chinese buyers have in international markets, especially in the bidding process.

Either that, or Chinese bidders think it’s all just a bit of good fun.

The disputes highlight a challenge for Sotheby’s, which is increasing its dealings with less experienced buyers from new markets such as China, who are not familiar with international bidding rules. As China’s economy continued its break-neck growth in the past few years, many people turned to overseas markets to park their new-found wealth, buying everything from properties to wines.

Further reading: FT, BBC

The Chinese policy to keep its currency value artificially low is beginning to urk its neighbors in East Asia as well Latin American countries, not to mention the long-running complaints the European Union and America have been voicing for years. Whereas before the global economic downturn China urged patience with a revaluation of the Yuan, now it is simply mute or, even less constructive, defiant. It’s clear, though, that more than just the American and European economies are beginning to feel the great sucking sound into Chinese factories from international buyers: countries still far down the economic development curve are also feeling the inequity China’s intransigence is creating.

As Arvind Subramanian, an economist at the Peterson Institute in Washington DC, writes in an essay for the Financial Times, “Emerging market and developing countries must do a ‘Google’ on China” and multilaterally work together to present to China it operates in a world of international inter-dependencies and, as such, needs “reminding it of its international responsibilities as a large, systemically important trader.”

Further reading: FT

See also:

National Malfeasance

China: The Misunderstood Energy Giant

Will China be In-grown or Grown-Up?

Chinese Overseas Direct Investment Hits a Wall

Since I watched Avatar in a movie theater in Suzhou a couple weeks ago I’ve noticed the Party’s blockbuster Confucius has not swamped movie theaters the way the powers that be proclaimed it was supposed to. In a bid to show domestic audiences and the world who ran the (movie) show in China, the leadership chose to go head-to-head with the highest grossing Hollywood flick of all time. I think Confusion and not Confucius reigned inside the hallowed halls of the China’s Ministry of Information Industry in Beijing when China’s own citizens pushed back on the internet and threw minimal ticket sales. ChinaSMACK translated criticicms of the movie about the life of Confucius that show a leadership increasingly out of touch with the Little Emperors their one child policy has spawned. Universally, on the eve of Spring Festival, young people who would rather play video games in internet cafes than attend university are redefining the value system the Communist Party imposed 30 years ago, when the government began liberalizing the economy.

Though China does not have democracy, the leadership has shown that it will observe popular boundaries of free choice: the Green Dam debacle, Google’s threat to pull out of China, and the tall blue Na’vi staying power in Chinese movie theaters is pointing the way to a new accomodation between the People and the Party.

Further reading: NYT;   Han Han: ‘Confucius’ Movie Gets 2 Points Only ; ‘Avatar‘ Movie, Chinese Reactions & Long Lines In Shanghai …

See also:

China Extradites Aliens

One Country, Two Webs

Keeping Tabs on Netizens

The End of Innocence

I recently attended a small wedding banquet that I think approximates what’s normal in smaller cities throughout China: an arranged marriage between a first-generation city girl and her countryside guy, who’s been stuck in an army barracks nye on four years now. The girl’s father thought it would be a good match as the boy’s from the same village as the father and the father himself was in the army twenty-five years ago. What more can a girl ask for?

Chinese young people, though, are finding ever more variations on marriage, including: the hidden marriage, the flash marriage and the increasingly popular trial marriage. My favorite is the marriage of the Phoenix Men and Peacock Women. A Chinese friend explained to me the variation is quite common, in which fellows from the countryside have good prospects in the city and pick up a wife with greater expectations for his status. Life gets more complicated as the two cannot communicate with in-laws, who at times seem from different universes.

At least in international marriages one set of in-laws or another are on the other side of the planet.

Further reading: China Daily, Wife vs. House: Chinese Men Discuss What They Can Afford

See also:

Naked Marriages

“Straying Cows” Still Unable to Meet Bachelor Demands

Divorce, Chinese Style

I live a stone’s-throw away from apartments that cost more than US$1 million each. Indeed, most of the apartments in my compound cost a substantial portion of that price, depending more on their size and proximity to a relatively small lake than to anything put down to common sense. A British friend suggested to me a couple weeks ago that from an investment point of view it doesn’t make sense to buy an apartment in China: prices have inflated incredibly in the Greater Shanghai area and there seems to be no baseline as to what the correct pricing levels should be, except what the real estate development markets tell people and what people believe. There are no bellweathers in China.

Prices for flats in larger cities in China have become so expensive that couples that want to marry can afford to buy them before they marry. Given the average marriage age in the mid- to late-twenties, scraping together the cash for a half-million dollar flat – even with a mortgage – is becoming increasingly difficult to do. Not even the combined savings of families on both sides of the aisle are able to buy something affordable, speculation in the real estate market has become so rife.

“Naked” marriages are the latest answer couples have found to meet the requirement of buying a nest to feather: marrying without the apartment, without the expensive ring, without even a wedding banquet (which sounds downright un-Chinese to me). Half-naked marriages will at least net the girl a ring, but likely no flat and no wedding banquet.

Many young Chinese women, though, still hold out for the guy with the flat and the car. That’s what they call security in a marriage. What’s love got to do with it, anyway?

Further reading: China Daily

See also:

“Straying Cows” Still Unable to Meet Bachelor Demands

Divorce, Chinese Style

Inside China foreign businessmen have certainly noticed local government in China taking a harder edge to dealing with foreigners with visas and business approvals. The Rio Tinto case is an extreme point to consider, especially in light of the sensitivity of negotiations on a benchmark price for iron ore.

Reuters recently identified 5 political risks to watch out for in the China adventure 2010. Trade and currency disputes, especially between China and the United States. The article councils looking out for signs that positions are hardening between the two sides as an important determinant in whether relations will become incindiery.

The article also considers the possibility of fallout from the dispute with Google. If reports begin streaming from Beijing of foreign deals scuppered or delayed – especially in the media sector – be sure the Google effect is at play.

Of course, the old bogie man of social stability is a conventional sanity check on whether Chinese leadership will make a dramatic decision. Watch out for signs that inflation or housing costs may be getting out of hand.

Health problems caused by excessive pollution has always been a flash point at local levels. Some foreign companies may find themselves suddenly caught up in a spontaneous government dragnet to close down or spoil the usual suspects.

Meanwhile, issues like Google and Rio Tinto forewarn that the leadership has not yet learned how to sap the political charge from business dealings.

So, though the promise of China’s vast marketplace is still worth the risk, foreign companies need to make sure they have their exit strategies updated if their investments in any way lay near the third-rail of national prerogative in China.

Further reading: Reuters, FT

See also:

In the Eye of the Hurricane

Recent articles have helped me better understand how Chinese migrant workers can work twelve to fourteen hour shifts, seven days a week at the four construction sites within 15 minute’s walk of where I live: they’re sexually repressed, according to Zhang Feng, director of Guangdong provincial commission of population and family planning. Guangdong recently announced through a survey it had performed on the sexual habits and reproductive health of migrant workers that 36 percent hadn’t had sex in a very long time. Meanwhile, another 30% hire prostitutes, while yet another third said they have many sexual partners.

China’s residence permit laws make it near impossible for a migrant worker’s entire family to follow him or her to a new city. City administrations do not provide social services such as healthcare and education to the out-of-towners. Migrant workers are also amongst the first to be forced out of cities during high-visibility events like the Beijing Olympics and the PRC’s birthday.

Though the national government is considering a liberalization of the residence permit laws, and some cities, like Shanghai, have recently made it easier for migrants to change their residence permit, most men and women who leave their hometowns for work in larger cities will still find the going tough without their families. Perhaps the 100 million condoms the Guangdong government will dispense to workers will help relieve a bit of their anxiety.

Further reading: Reuters, China Daily