The Hong Kong woman told me that Mainlanders gather at any of a handful of towns at MTR metro stations on the Mainland side of the border. The MTR is the Hong-Kong company that runs the city’s subway system. Just after their water has broken, and while in labor, the Mainland mothers-to-be rush to the metro line to the emergency rooms of hospitals on the HK side of the border. Talk about an uncomfortable – and possibly, unsightly – ride for other passengers on the unfortunate carriage. The emergency rooms of publicly funded hospitals are obligated to accept all-comers. The result for the newborn? Instant HK passport, education and social services.

Private HK clinics are not so keen to see the flow of Mainland birthing-tourists restricted, as they apparently make a huge amount of money from the business, according to the woman. Still, it’s the social welfare that finds itself under yet more pressure with each additional birth from a Mainlander, whether the infant is born in a public hospital or private clinic.

Locusts should be so clever.

The Zhejiang city of Wenzhou has been having a bad run in the media lately, both domestic and international. ‘Wenzhou has the reputation in China of having been first and most successful out the gate when economic liberalization began thirty years ago, and of having the most millionaires per capita of any city in China that makes cheap stuff like plastic cigarette lighters, of which the city has some 80-percent of the world market sewn up, or some such. It’s fortune seems to be waning, however.

Most recently, a Jiangxi-born businessman based in Wenzhou jilted his workers of their wages, selling the factory’s equipment one evening and escaping with his girlfriend to his hometown in Jiangxi. It’s unclear whether his girlfriend was also from Jiangxi. The workers called the cops, who quickly caught up with him, according to the China Daily. As early as the end of the summer, according to the Wall Street Journal, Wenzhou companies were suffering from a dearth of lending from the national banks as Beijing continued to tighten lending to curb inflation in the country. Dozens of businesses have been closing, ever since. The problem has only been exacerbated as material inputs have increased, salary pressures have been eating away at profit margins and buyers in the West are unable to buy more stuff because of the global economic slowdown. Wenzhou has been fertile ground for a vast shadow banking system that profits from illegal loans to local businessmen, according to the Financial Times. Some Wenzhounese, though, tried to cheat their way through the bad times, but recently found out crime doesn’t pay.

Sixteen Wenzhou executives, ten local government officials and eleven others were found guilty last week “for graft, embezzlement, illegal distribution of State assets and bribery”, according to another China Daily report:

Ying Guoquan, a founder and former president of Wenzhou Cailanzi Group, was allegedly involved in graft, embezzlement, illegal distribution of State-owned assets and bribery, involving more than 400 million yuan ($63 million). Wenzhou Cailanzi Group is the largest enterprise for food production and processing in the city, supplying 98 percent of the vegetables, 80 percent of the soybean products and 60 percent of the seafood, according to the group’s official website.

The most remarkable aspect of the case, according to the China Daily article, was that, “The corruption case at Wenzhou Cailanzi Group was the most serious of its kind in the city in the past two years, according to Xinhua News Agency.”

Just goes to show, two years in China can feel like forever.

The New York Times recently had an article about the shrinking purse Chinese consumers have been suffering for the last decade. The article discusses how central government infrastructure projects and the resuscitation of the State-owned Enterprises (SOEs) has been at the expense of all but the well-connected and very rich.

Indeed, economists say this nation’s decade of remarkable economic growth, led by exports and government investment in big projects like China’s high-speed rail network, has to a great extent been underwritten by the household savings — not the spending — of the country’s 1.3 billion people.

This system, which some experts refer to as state capitalism, depends on the transfer of wealth from Chinese households to state-run banks, government-backed corporations and the affluent few who are well enough connected to benefit from the arrangement.

Inflation has its part to play, as inflation rates holding between 5-6 percent eat away at bank deposits that accreted only 3-percent interest. With not many other options in which to place their money, families have been squirreling away an increasingly larger portion of their income. With government strictures severely limiting purchase of additional residential property and overseas investments dramatically curtailed, families pretty much have three options: traditional banks or gray-market banks that promise stratospheric returns on interest. Or under the mattress.

James Kynge writes in an article in the Financial Times about the gray market for deposits and the extent to which the Beijing Consensus of central government interference in the economy and industrial policy has left the country with hidden debts of its own that leave the country unable to provide another adrenaline-jolt to the economy, in case the world goes into double-dip recession.

It’s no wonder the powers that be are increasingly concerned about placating the masses during eruptions of discontent.

image credit: eastsunrises.wordpress.com

Technorati Tags: bill dodosn, china, consumer, middle class, soes, state-owned enterprises, wealth

Check out the latest Hot Pot Podcast on how China’s leadership may be shifting infrastructure development into lower gear, while the society is still on speed.

Listen to it here here. (Running time: 7 minutes, 19 seconds)

It is certainly laudable how Chinese citizens may have held the central government accountable for the railway mishap, but they’ve hardly slowed down their own frenzied grab for wealth. The central authority has ordered safety and quality inspections of the miles of track and thousands of control systems that support the largest high speed network in the world. The CSR, makers of the trains for the highly publicized Beijing-Shanghai line, has even recalled more than forty of the cars built specifically for the line. Heads are rolling, with those with leadership responsibility connected to the mishap last month of the Hangzhou-Wenzhou line coming under scrutiny for their roles in the disaster. Beijing has even ordered the trains slow down from their unsustainable speeds: trains with a top design speed of 350 kilometers per hour will be lowered to 300 km/h, and the trains designed to run up to 250 km/h will operate at 200 km/h. But no one seems to be tapping the breaks for the society at large, despite economic figures.

Here on the ground, Chinese society – or rather, Chinese people – are still impatiently slamming up high rises like there is no tomorrow, driving recklessly through increasingly congested roadways, and flipping properties like a cook making pancakes on a Sunday at a crowded Iowa diner. Conversations in tea houses and coffee houses  and restaurants are about business – or about money. Never have I heard between sips of lattes by women in vertigo-inducing pumps or men toting man-bags a philosophical discussion about the state of the State or a hearty debate about the direction in which the society is going. It’s all about money: where to find it; how to get it; how to show it off.

CCTV announcer Qiu Qiming said it best:

“If nobody can be safe, do we still want this speed?… Can the roads we travel on in our cities not collapse? Can we travel in safe trains? And if and when a major accident does happen, can we not be in a hurry to bury the trains?” China, please slow down. If you’re too fast, you may leave the souls of your people behind,” he said.

China is still in the fast lane, with little inclination to slow down.

Technorati Tags: bullet train, chinese middle class, high-speed train, infrastructure, moeny, train wreck, urbanization

After I had delivered a book talk (about China Inside Out) to about 60 members of the British Chamber of Commerce in Shanghai a young Chinese lady approached me and said, “I’m having a Naked Marriage”. She seemed confessional, as though she was committing some great sin in the eyes of the Almighty. I had been telling the group – which was eighty percent Westerners – about how the inflated values of everything from property through weddings and even wedding rings were blocking young Chinese couples from fulfilling social wishes for a grand send up to matrimony. “Naked weddings” saw couples basically living together, marriage certificate in hand and that’s about it: no property, no dowry, no wedding ring, no wedding banquet (gasp!). Half-naked weddings at least net the girl a wedding ring.

The young lady at the BritCham talk told me that both she and her lad were professionals working in Shanghai and that together they could not afford to buy a flat. She was from Wuhan, where her family still lived. Her parents didn’t like her suitor, who was from Harbin. He didn’t have any money, they said. Apparently, the young fellow’s parents didn’t much like her, either; I supposed they figured their son should be marrying into money there in Shanghai. She told her father she wanted to marry for love.

He told her, “You’re being unrealistic”.

“I told him I didn’t want to be caught up in a bad marriage and work a job I hated just for money,” the young lady explained to me.

“No one likes their job,” she told me her father shot back.

How ever the saga ends – or the next chapter begins – it is refreshing nonetheless that a generation gap in China just may see a revision of social values thirty years of the Cultural Revolution were unable to expunge.

Related posts:

Naked Marriages

“Straying Cows” Still Unable to Meet Bachelor Demands

Divorce, Chinese Style

Fan Bing Bing is a Fan.

My (Chinese) wife recently accompanied her sister to one of the numerous clinics in Suzhou that perform face-lifts (or cosmetic surgery, as the profession enjoys calling itself. My wife told me the line to the check-in counter was nearly out the door with young women, as young as high school age. “Many of their parents accompanied them,” she told me, which surprised me.

“Why were their parents there?” I asked, incredulous. I spend a lot of my time in China incredulous.

“The parents are paying for the surgery,” she said matter-of-factly, as though implying I really needed to get with the program here in China.

“They’re paying for their daughters to have surgery on their faces?”

“And breasts,” she added.

“And breasts.” I could feel a rush of testosterone weaken my knees at the prospect. (Men are such simple animals).

“The parents believe if their daughters are more beautiful they can catch a boyfriend with more money.” Of course, “boyfriend” in China nearly always means “fiancee”. Doesn’t take more than a couple dates to seal the deal. I imagine, as well, a pretty face and shapely figure don’t hurt job prospects, either; especially if one looks at job qualifications for airline attendants, bullet train attendants and secretaries.

The Straits Times reported in January this year about the Chinese cosmetic surgery industry, “About 3 million people had plastic surgery on the mainland in 2010 in an industry worth an annual 15 billion yuan (S$2.9 billion), statistics from the MOH [Ministry of Health] showed. There were also 20,000 lawsuits against clinics in China in 2010 for botched jobs and “lopsided” results.

My wife figures that about 90% of young girls in Suzhou have had plastic surgery of one sort or another. I think her estimate is rather high, though I am amazed at the rapid growth rate in pretty girls with busts locally – where there had been very few of both just a few years ago.

Or maybe, it’s just that Chinese women are drinking more milk and wearing more makeup.

Technorati Tags: middle class, social trends, urbanization

I recently had lunch with a group of young Chinese in a Suzhou restaurant. They were all in their mid-twenties, young professionals employed in manufacturing, software development and even film. Lost in my own thoughts while supping on a plate of fried rice I heard them talking about Chongqing and Chinese Communist Party. I perked up and offered that surely in Suzhou there was no such thing going on.

“Oh no,” one of the party said. She was a young lady named Lizzie. Lizzie looked over at the would-be film director, Stan, a good-natured, soft-spoken creative type. Lizzie said, “A big Chinese manufacturer of telecomms equipment is requiring its staff to practice singing, aren’t they?” The director agreed.

Apparently, the different departments in the company have ongoing singing competitions judged by top executives at the company. Groups within the departments are required to go to local KTV (Karaoke) parlors to improve their singing skills. The company pays for the singing sessions at the parlors, which are typically better known as venues in which the average Zhou can follow the subtitled cues that scroll along the bottom of TV screens from which boom tunes sung by top singers from the Mainland, Hong Kong and Taiwan. The Carpenters and Eagles are also popular groups to lip-sync. More expensive KTV halls have requisite pretty hostesses to accompany groups of heavy drinking businessmen. I don’t expect, though, the company encouraging the red song sing-a-longs is picking up the tab on alchohol.

One of the young men at the table explained that attending the KTV parlors to practice singing the red songs was compulsory, like showing up for work. The group seemed more amused than disgusted by the corporate compulsory crooning.

Still, you have to wonder if under different circumstances, they too might just follow the leader, suck up their true feelings, and join in the singing with a passion better left in a tragic past.

Technorati Tags: middle class, social trends

I recently wrote a couple posts on my book blog ChinaInsideOut.info about worker unrest disrupting company operations in China, and even entire communities. Zengcheng, in Guangdong province, seems to have settled back down to being the jeans manufacturing capital of the world. The one city alone generates 40-percent the jeans Americans slip over their buttocks. Migrant workers got sick and tired of being treated like second-class citizens and revolted en masse. Staff at a factory owned by Citizen, the Japanese manufacturer of the watch brand of the same name, also recently staged an industrial action.

I’ve written more in-depth about the impact the spate of unrest is having on China-based operations and the knock-on effects on supply chains of international companies that rely heavily on China being a stable Workshop of the World. The report is called, “Social Unrest in China: Implications for Foreign Invested Enterprises”. One of the interesting points I turned up in my research for the report was the overwhelming number of companies at which workers are staging proletariat-style revolts are Asian: Taiwanese and Japanese, mainly, with some Hong Kong investors I suspect are predominantly Chinese Mainlanders “round-tripping”; that is, setting up HK investment vehicles to re-invest in the Mainland as foreign companies: helps in reducing local tax burdens and makes it easier to get their income out of China.

I’ve always been of the mind Asian investors tend to treat their employees as liabilities, disposable; while Western companies invested for the long-term in China tend to treat their staff as assets to take care of and encourage. People don’t like being treated as liabilities. Of course, their are exceptions in both camps; however, I’ve found few exceptions over the years.

Read more about the report here.

Related posts from ChinaInsideOut.info:

The Unrested in China

Workers Still Unrested

I admit I do have two pet peeves about living in China: scalpers and line jumpers – if there’s a line. Few things make me as mad-as-hell-and-I’m-not-going-to-take-it-anymore as people who do either of both: I get quite vocal in Chinese  language at the infraction (which happens all too often here), and have no problem shaming the assailant into civility.

And so it comes as little surprise to me that a couple weeks ago the China Daily reported an Apple worker was involved in an altercation that involved a couple supposed scalpers getting scraped up when they attempted to jump the queue that had formed to buy the new iPad 2 at the Sanlitun store in Beijing. The queue dissolved into mayhem with Chinese characteristics when the crowd saw staff shuddering the store after the run-in. The event seemed to roll up all those grubby elements that sometimes makes living in China a bit of a struggle, no matter the nationality.

I’m just glad I wasn’t the Apple employee who engaged the scalping line-jumpers. I certainly would not have endeared myself to local authorities for fracas I might have contributed to.

image credit: China Daily