This is China! blog

I’m a bit annoyed as a Science Fiction fan the film “Inception” has not yet appeared on local theater screens here in China. I write in The Diplomat…

“I haven’t seen Aftershock, nor have I any intention of seeing it since it just seems like a bigger budget version of the kind of thing they show so often on Chinese TV in which earthquake/flood/typhoon (take your pick) demolishes a happy Chinese town (which seems a bit of an oxymoron in these days), after which the People’s Liberation Army marches in and picks up the pieces (literally). Actually, I only have to turn on the nightly news here to see the PLA march in to save the day after a flood/mudslide/drought/typhoon/earthquake has decimated a region.”

Read more …

A recent round of banquets with local government officials inspired me to post a blog on The Diplomat:

One of my colleagues refers to the endless rounds of saucy dishes served at government banquets and countless rounds of toasts as ‘speed dating’. The idea at these meetings between government officials who want to entice investors into their region and these potential investors is to bond as quickly as possible by making one’s body as uncomfortable from over-consumption as possible. Hosts call out to banquet guests ‘gan bei!’ (empty glass), with toasts between two people more like races to the bottom of the glass. As one government official in the Shandong Province coastal city of Yantai once put it to me, ‘I am ruining my health for our relationship.’

Check out the rest of the article here.

Image credit: Cultural China

The New York Times finally, plainly stated what is so evident here on the ground inside China’s property market: space is curved inside a bubble. In particular, it’s the State-owned Enterprises (SOEs) themselves and local governments that have been driving the market to dizzying heights. The Times wrote, “Land records show that 82 percent of land auctions in Beijing this year have been won by big state-owned companies outbidding private developers — up from 59 percent in 2008.”

In other words, the game has been fixed for a long time now; unfortunately, a lot of residents have been left outside the bubble or on the thin-film itself. Even national government administrators have been giving recent property buyers back-handed reassurances that property prices will not fall more than thirty percent. Yipes! What kind of investment is that?

By driving up property prices, the state-owned companies, which are ultimately controlled by the national government, are working at cross-purposes with the central government’s effort to keep China’s real estate boom from becoming a debt-driven speculative bubble — like the one that devastated Western financial markets when it burst two years ago.

I’ve always been of the mind that China’s swagger about having gotten things right during the Great Recession while the West got it wrong has been more a matter of luck than of cleverness. An estimated US$2.4 trillion in debt will have been loaned out from the beginning of 2009 through the end 2010, placed in one of three pools: infrastructure projects that will not see returns on investment for years, if ever; property speculation instead of on R&D and human resource development; and simply spirited out of the country. What makes the explosive capacity of the bubble even more disconcerting is its opacity: like the credit default swaps (CDSs) and collateralized debt obligations (CDOs).

Like physics, the fundamentals of economics will eventually come to roost in China in a revelation of the most basic law of the universe: what goes up, must come down.

Related posts:

Property Value Woes

China Property Woes: An un-American Response

Bubblicious

Over at TrendsAsia my colleagues and I have been producing podcast interviews of General Managers, Senior Managers and CEO’s in China’s renewable and clean energy sector and posting the recordings on the ChinaEnergySector.com blog. We’ve taken the recording thing a bit further and started recording ourselves, too. A bit narcissistic, one might think; but we’ve been working out more channels to get our information, news, commentary and analysis across to interested Western audiences with little direct access to what’s going on here on the ground in China.

So, we’ve expanded into audio recordings of the blog posts we write, organized into files made on a weekly basis (“read in the author’s own voice,” as they say on the backs of audio book packaging). The idea is to make it easier for those on-the-go types to keep up with our blogs without having to remain glued to their computer screens. And Roundtable Discussions, in which the principals of TrendsAsia discuss the latest news topics of interest to us in China’s energy sector. Look for our video interviews in the near future.

You’ll find the Podcasts here on the ChinaEnergySector.com blog; the Blogcasts here; and the Roundtable Discussions under the Newscasts menu item, here.

Enjoy.

(This is a guest blog by B.S.D Mistry)

No matter how long you work in China there are still days when you hear stories that never fail to surprise, or even make you fall out of chair in laughter. My good friend Ed works for a huge US based manufacturer of fast moving consumer goods. They have a plant in Suzhou which has grown rapidly in three years from 150 people to employing over 800 line workers, most of which are young women between the age of 18 and 30.

A year ago the company launched a research project to reduce the rate of absenteeism , which Ed headed up. The results of the research determined the two single biggest reasons by far for missing work were having an abortion and visiting the sexual health clinic. The company decided to tackle the issue by introducing a health clinic with a nurse on site to treat STD-related diseases and tackle prevention by giving out condoms.

Ed now has a new problem. His company is giving away 1600 condoms every day (averaging 2 per person), which has left him scratching his head and facing a large bill. As to how these free condoms are being used one can only guess. Perhaps his workers have an active nightlife, or more likely someone is buying up all these freebies and making a profit. As with many aspects of Chinese life the answers remain sheathed.

The cover for my new book – China Inside Out: 10 Irreversible Trends Re-shaping China and Its Relationship with the World – just came out. I think it looks cool. Kudos to the Production Team at the Singapore Division of publishing company – John Wiley and Sons – and especially to the graphic designer. When I met the production team at the publisher’s Singapore office in the Spring, the production team asked me for my ideas on the cover. I hadn’t any, really; though we all agreed: NO DRAGONS!

The cover is on the John Wiley site, but hasn’t been placed on the Amazon page for the book. Certainly, the book seems way less abstract than ever before, with a “face” to it.

I do hope readers find the book presents as many surprises if not insights as the cover suggests.

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ISBN: 978-0-470-82643-0

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