This is China! blog

The apartment complex middle manager stood on the balcony of my former apartment and gestured at the apartments just in front of us. “Those sell for more than 10 million RMB each,” he said, his round face excited at the prospect that the neighborhood was on Suzhou’s high-value property map. The property he was talking about faced a medium-sized lake around which scores of other high rises had gone up. He pointed at the new construction just a few hundred meters from where we stood, where high rises in various stages of completion saw a hum of ant-like activity. The site had awoken me the last year every morning at 6am as heavy machinery prepared the site for the work of the day. “Those have all sold out, and were even more expensive.” Some of them did not even have lake views.

But the overwhelming majority of residential construction of the high-end luxury sort in China, it’s no wonder Li Daokui, a professor at Tsinghua University and a member of the Chinese central bank’s monetary policy committee, indicated in a video interview with the Financial Times recently that the Chinese property market was even more dangerously perched than the American market before the housing bubble State-side collapsed. His point was basically that while Americans were fulfilling the American “dream” of buying a home, Chinese believe home ownership a necessity. The rapid and artificially stimulated inflation of housing property values in China has left the overwhelming majority of Chinese without the wherewithal to address that necessity. If housing remains so stratospherically out of reach of average, hard-working Chinese who are trying to play by rules clearly bent to the advantage of those in power, Li’s point that such a blatant inequity could ignite social discontent on a massive scale.

Meanwhile, with an inevitable correction (of questionable level, admittedly) in the market, new-money homeowners could find their investments turned to plaster-dust.

With such a dire prognostication, it’s no wonder his video interview is banned in China.

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They’ve ripped up the road in front of my apartment complex in Suzhou. One day, two months ago, white-washed barriers topped with basketball-sized lights went up on both sides of the street. The local powers that be needed to expand the road as an on-ramp onto expressway connecting Shanghai and Nanjing. The area has been filthy with no safety barriers or warning signs of the construction sight and dangers encountered in simply crossing the street to buy groceries. Construction starts from 6am, kicking up dust and tempers, and ends around midnight, seven days a week.

The lack of a civil society is the secret of China’s success. There were no civic council meetings about the implications of the expanded roadway; no consultations about the impact the construction would have on the environment (once a rich marsh land) and no certainly no townhall meeting in which citizens could air their opinions. The project was simply done. Without previous notice, without repercussion. The project just appeared one day. We all simply walked around the rubble that had once been a relatively out-of-the way apartment block.

China’s is a donut civilization: its civil society hollowed out millenia ago – if it ever had one. It is a civilization without the “civil”: an “-ization”, a process of ebbs and flows as cyclical leaderships dictate. The citizenry merely fall in line, protecting their own, promoting their own, ignoring the rest as long as the rest at any given time does not interfere with the accumulation of wealth and extension of progeny. The lack of civil society in China is evident in unkempt public places, fights on the streets, suicides in companies, viral violence.

It’s the lack of a civil society and the channels for airing local disputes, concerns and issues that is China’s greatest strength: Chinese have for millenia been able to mobilize the masses to build some of the greatest structures in human history and to bring nearly twenty-percent of humanity out of desperate poverty into modernity in thirty years. And it is China’s greatest weakness: when everyone is headed in the wrong direction at the same time the entire society goes into decline, like lemmings, following each other off cliffs. Chinese “-ization” has given the society three generations of young people willing to perform mind-numbing work in de-humanizing conditions for long hours, days on end.

It looks as though the next generation has a lower threshold for the lack of civility that has levitated China’s rush into a wealthier future. Foreign investors need to adjust their expectations for doing business in China accordingly. As Foxconn and Honda are already learning.

Further reading: NYT

Eurobiz Magazine recently interviewed me for an upcoming article on salary pressures on China operations and CSR-related activities companies may be investing in to retain staff and brandish their image in the local community. The same day as the interview Foxconn saw its 10th suicide of an employee. Keili Stremel, Deputy Editor of Eurobiz, asked me what my take was on the suicides. I told her I believed Chinese employee expectations for their lives had altered radically in ten years: in 2000, migrant workers in the millions worked at back-breaking jobs 12- to 14-hours a day 10-days a week, with a day off. They made a pittance, worked for the most part in squalid conditions, and saved most of their meager salary to send to the family remaining in the hometown. Chinese ten years ago could tolerate this condition because life on the farm was far worse and made even less money.

Now, young people of the same age but different generation have seen what the good life has to offer. And, frankly, they are in no more a rush than anyone else in this high-strung society to take their slice of all modernity and a consumer lifestyle promise to offer. However, modernity in China has become a relatively expensive commodity, and obtaining so much of what they see on the streets and on TV frustratingly far off. In a society in which the highest values an individual can obtain involve desiring stuff, acquiring stuff and showing the stuff off – NOW! – the dehumanization of the assembly line is like an emotional lobotomy. Even if a Chinese employee has a white-collar job, so much of what he or she should be able to acquire materially while they’re still young seems so much further off than before; especially that dream home where bride and baby make three – and grandmas and grandpas make seven – a great financial weight to carry, indeed. A cognitive dissonance has arisen in which people have to want things in order for the society to work; however, they have to want the policy-acceptable things that do not present a threat to any authority figure, in business or in government.

Mind you, all of this is happening at head-snapping warp speed, 24/7, with no sense of rest or reflection.

In other words, Chinese society is cracking up – not from an infrastructure point of view – but from a humanistic one. Anyone know a good shrink?

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Perhaps because I’m about to have my first child in a couple weeks, I’m a bit, well, sensitive. I’m sure most every would-be father feels the same way. (And the mothers even worse, I’ve found! ^_^) Everyone keeps talking about Ceasarian sections here in China. My wife told me a couple nights ago she met another Chinese woman in a local market who had just had a little girl. While the woman was in labor at the local maternity hospital the three or four nurses in attendance kept insisting the woman have a C-section. The woman refused. However painful the experience, the doctor had assured her before she had gone into labor that she would not require surgery. So why were the nurses so intent on the mother having an incision in her belly that would forever sever the muscles in her abdomen? “The nurses each get a paid a commission by the doctor who performs the surgery,” the woman in the market told my wife in a whisper. “Whatever you do,” the new mother advised my wife, “however painful it might be, don’t let them do a C-section on you if your doctor already told you you’ll deliver the baby alright without one.”

I told the story to two of my magazine editors in Shanghai, whereupon one of the Americans told me he had read somewhere (China Daily, he thought), that China has an obscene number of C-sections per capita compared to the rest of the world; about one-in-three, he seemed to recall.

So, while eating dinner and watching the local Chinese news just hours later, what report should air but one involving pregnant women who are having C-sections in Suzhou. “Preganancy is so painful,” one of the women exclaimed on-camera. Other women in the report nodded agreement and cackled something in the local dialect. A Chinese doctor thankfully came on and assured the viewing audience that however painful, natural birth was actually a better option for infants, if possible. Of course, the doctor was a guy, and hadn’t to my knowledge been through a pregnancy himself.

Still, this C-section fad reminds me very much of the “sinification” of ultrasound technology: a mis-application of technology in an attempt to trump Mother Nature herself.

My friend Scott Tong, Bureau Chief for Marketplace, a business program on the American radio network NPR, told me a couple days ago he was finally able to get his piece aired on the relationship between baby traffickers in south China and adoption agencies in the States. It took a bit of to-ing and fro-ing, he had told me weeks ago, since producers were concerned the article would rattle the cellophane sensitivities of NPR listeners who themselves had adopted children from China. As interesting as the radio report is Scott’s background article on the meetings he had – or didn’t have – with agency buyers, middlemen and government officials. It all makes for an insightful media treat. And reading from the comments on the page, listeners appreciated Scott’s effort in getting at the heart of an opaque bit of business in China.

Find the report here.

Scott Tong and I recently had a spirited discussion while speeding back to his office in Shanghai in a taxi late one hot afternoon. Scott is China bureau chief of National Public Radio (USA). We talked about how the bride price in China is increasing all out of proportion to reason. The bride price is the increasingly gratuitous dowry young men are expected to give to young ladies with whom the men would like to wed. Now, on top of cash amounts upwards of tens of thousands of US dollars, men in the countryside are expected to also have a flat already bought; some women even expect their mate-in-waiting to already have invested in a car. Scott told me about the research of Columbia University economist Shang-Jin Wei. Wei found a direct correlation between higher rates of savings in families with young men who needed marrying off compared to those without.

Other Chinese have confirmed the dismal state of being an average Chinese family – or, more challenging, a family in the country-side – when it comes to paying a bride’s family off. One Suzhou taxi driver, already married to a woman from Shanghai – lamented that, “Chinese men have only one chance at happiness, while Chinese women have at least two.” I asked him what he meant. He explained, “Chinese men have to pay the dowry to the woman’s family and buy an apartment before they marry. Afterward, the man has no money. The woman, though, has the man’s money and then, if they divorce, can get another dowry. The man, though, can only afford to get married once. After that, never again.”

Pity the Chinese suitor.

Further reading: WSJ

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Chinese forums and blogs last week were abuzz about the latest spate of violence in children’s elementary schools here in China. Much of the anguish and anger seem to be targeted at the accelerating income gap in the society, exacerbated by corruption and nonchalance by local government officials. I have my own theory: China has become high-strung.

Just a couple days ago I experienced a perfect example of the degree to which the society has become anxious to the point of breaking, this past Sunday, during the May Holiday festival. Most countries take time off in the first week of May to celebrate May Day. Theoretically, the Chinese masses are supposed to relax during the three day weekend. (translation: shop till you drop, and eat and drink with abandon). Instead, I found myself awoken at 6am on the second day – a Sunday – by the incessant construction of a new collection of high-rises next door to my own. The construction went on until 8pm that evening. (and started up again the third day of the holiday). A bit sleepy during the afternoon, I sought to take a snooze – half-hour would do it, I figured. Instead, fifteen minutes into the nap the canon-booms of fireworks launched me from the comfy sofa. Newlyweds were arriving at their freshly appointed home, and felt the need to frighten away the same evil spirits that had apparently been be-deviling a different set of newlyweds at noon, just a couple hours before.

Literally minutes later a hydraulic drill began carving into the cement walls in the apartment the floor above our own, a common enough occurrence most days of the week. But this was a Sunday afternoon! We called the compound guards to apprehend the offenders, but they were unable to find the culprits, whose timing was immaculate: they stopped when the guards came into the building, and started up again minutes later. I bade my wife farewell in the hopes of spending a couple hours outdoors with mates over a few pints of beer.

While waiting for a taxi at the entrance to the complex of apartments I witnessed a fender-bender between two cars – a small bump, with nary a scrape – after which the drivers of the two cars emerged to begin punching each other. The twenty cars waiting to get past them on the road were not impressed with the display of misplaced testosterone, and blared their horns. The stalled chain of cars were immobilized by the raised barrier along the median, and by the tall wall keeping the cars out of one of the multitude of new construction sites that sliced the thoroughfare into a single lane. Most residents in most cities throughout China find traffic daily frustrated by construction that literally appears overnight, but takes weeks to evaporate.

The rate and massiveness of modernization in China is fraying nerves and sensibilities. Mainland Chinese are stressed beyond comprehension: stressed with change, with catching up with the rest of the world – with each other – and with simply staying in place in a world of accelerating reformation. A culture that for four thousand years has trundled along, metaphorically, at the speed of an ox cart suddenly finds itself ripping through time and space at supersonic speeds. Few individuals or groups can withstand such inhuman stresses without the occasional gripe. Or grisly deed.

I had just walked out of the luxurious Raffles City Mall in Singapore when I saw a great black plume of smoke sucked into the sun. As it’s my first visit to city-state, I wasn’t sure if fires in busy intersections were a regular occurrence. A car had exploded curb-side; actually, not just any a car: a Ferrari, low slung, previously banana-peel yellow and, now, charcoal grey. The fire had started in the engine, at the back of the car. The boot completely had melted, most of the engine was ash. The tires had completely melted down, so the chassis rested on the scorched tarmac.

One of the things I have realized during my first visit to Singapore is that it is a society on the go. It fared the Global Recession relatively well, and has been liberalizing its economy, and enlivening its notoriously dull society. As one Singaporean university student told me, “The government isn’t controlling things as much as it used to. Just a few years ago, there was only one art school. Now there are three. The government doesn’t direct us to certain jobs any longer; now we can have more possibilities.” I recall a couple years ago the Singaporean’s concern at the dearth of entrepreneurial talent; it had been directing its best and brightest to careers in government and nationalized enterprises.

I like Singapore. As one British expat who’s lived in Singapore 13 years and raised a family here told me, “It’s easy to knock the government. But things work here.” He described to me what a dream it is to come off an international flight at the Singapore airport and be through passport control and customs in less than twenty minutes. Just a few minutes more with little wait at the taxi stand, and he’s home.

It seems a safe city. I’ve seen only one police cruiser. Most of the uniforms I see are of school students who club together after class, chattering, fooling around, teasing each other, sharing after-school snacks. School days, though, are clearly long, with students heading home after 5pm.

Though business brought me to the nation state, I’ve made the time to walk some of its boulevards and side streets. Despite its small size, the diversity of the population is a breath of fresh air after more than a year of not having traveled outside China. Ethnic Malays, Chinese and Indians pretty much socialize within their own groups, but work together at government and service jobs. It’s also nice not to be pushed and shoved – as is the rule, rather than the exception in China – to queue in line without complaint; to hear (and say) “sorry” when crossing too close into someone’s personal space, or even bumping into them; and no loud hocking or spitting on the sidewalks. Though it would be nice to chew a stick of gum now and then, I’ve gotten over it. Singapore makes an extreme effort to put the “civil” into civilization, something Chinese society on the Mainland has a long ways to go in its wen ming campaigns.

But then again, Chinese leaders are more concerned with keeping the momentum of economic growth roaring at Ferrari-like speeds. We know, though, what can sometimes happen to overheated engines – no matter how finely tuned.

A friend and one of the funniest guys I know in Suzhou, Turner Sparks, recently received a write-up in the New York Times about the franchise he runs in China, New York-based Mr Softee. Turner not only runs the ice cream truck, but he also hosts a Friday night stand-up comedy show in one of the bars in Suzhou, showcasing the talents of local expats and Chinese comedians alike. The article is an excellent case study for any Westerners who want to transplant their business models in China, when the Chinese are simply clueless what the business is on about – especially franchises. As the article mentions, Turner and his former college room mate, Alex Conway, President of Mr Softee China, had all kinds of hoops to jump through in China, the first of which was “selling products out of a truck. Mr. Soft Heart trucks were assigned specific routes and parking spots, with no deviating allowed.” Mr Soft Heart is the Chinese name for the company. The article goes on to explain how the company educated Chinese consumers about the product line and flavorings, and how some flavors simply did not fly.

The article is as light and fluffy as the ice cream itself, except more educational – and less fattening.

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A third-born Chinese young lady recently told me how she almost did not exist. Her father was extremely disappointed at her birth, given his wife had already born him two daughters. The father’s plan in the Anhui countryside was to leave the newborn in a field for the dogs. A grandmother intervened and took the infant in, though the hungry child had the same status in the household as a doorstop.

The result of such deeply entrenched generally accepted parochial thinking in China is that the country has way more bachelors than potential brides. The countryside of Anhui has ratios as high as 127 boys to 100 girls; deeper in the interior sees proportions of 175 boys to 100 girls; while even higher still is the Beijing municipality, where the ratio of boys to girls born is nearly 3-to-1, according to the Economist Magazine.

Now, according to the young lady, she is part of a huge “buyer’s market” of young brides who expect potential suitors to have already bought a house and provided a dowry to the girl’s parents. In the cities dowries are around 50,000 yuan (about US$7,000), while apartments in even the smaller cities can now run as much as US$150,000 to start. Countryside families of girls, Third-Child explained to me, are far more uncompromising, expecting as much as 300,000 RMB (about US$40,000) as dowry, in addition to the purchase of a home before the boy even contemplates a proposal of marriage. “In the countryside we say the men are ‘buying’ a wife; in the city, it’s a little less overt than that, though it’s still expensive for the boy.”

Third-Child told me the stress boys are experiencing now is so great that many despair, considering lives of crime to acquire the money families are extorting for their daughters, or simply giving up on finding a girl ever in their lives.”Families with girls are so happy now because they can actually make money from their daughters instead of paying it out if they had sons who needed a wife.”

Though in many instances boys can turn to the extended family to pitch in for the purchase of a marriage-nest, even extended families are finding it difficult to contribute more than a few thousand RMB to the cause of despairing nephews. “One cousin asked my parents for money, and was upset at the small amount they could give him,” Third Child explained. “My parents explained they had their own expenses living in the city, and still had to save money for themselves.”

I asked Third-born about the market for Vietnamese women imported into China. She told me, “Even the Vietnamese girls don’t want to live in the countryside. Though their families may not require large dowries or the girl may not even need a home bought first, the girls do not want to live in a situation as poor as the one from which they’d come. They want to live in the cities.”

Pity the Princelings of Pekin.