This is China! blog

Friends in Shanghai last week asked me what I was going to be doing during the May holiday. “Ride the subway!” I answered brightly.

The first line of Suzhou’s subway opened this weekend to much fanfare. Speeches, huge helium balloons tethered to the ground, and fireworks displays all marked the occassion. The event put me in mind of the first train on the transcontinental railroad in America a hundred fifty years ago making stops at frontier towns. Everyone came out then to greet the newfangled contraptions. Suzhou citizens were no different.

The line is the first of five total that will lace the city. Apparently, after all five lines of the subway are completed in Suzhou – sometime in the next five or six years – the underground will connect with Shanghai’s own, creating a mass transit web between the cities by 2020.

My family and I thought that by waiting a day after the official launch the crowds would be thinner than on opening day. They weren’t. Worse, many of the local residents had little experience on subways, so getting through the electronic gates and from the platforms was torturous. Locals had no experience swiping their cards on the kiosks or feeding the machines the passes. Lines were also long at the electronic kiosks where passengers had to buy the subway passes. Two or three clerks at a time had to help people select destinations on the computer displays and inject their cash to retrieve the travel cards.

The couple stations we were at seemed not to have enough ticket machines. The trains themselves took about 60- to 70-percent the capacity of Shanghai underground cars; the platforms were narrower than Shanghai’s, as well. No matter the time of day on the Sunday during which we rode the train downtown and then back again to the Suzhou Industrial Park space in the cars and on the platforms was standing room only. The space constraints will likely make for many a grim rush hour.

The public center of Suzhou – Guan Qian Jie – a mile-long walking street bordered with shops, restaurants and and local retail outlets – was bustling. Restaurants were full and lines were long. From McDonalds to the noodle shop chains like Kang Shifu, consumers were munching their way to relaxation in the spring sunshine.

Nevertheless, there was a palpable sense of excitement in the air in and around the stations. Now, Suzhou had something mostly the largest cities in China had: an underground. As my wife gleefully said while we waited on the subway platform for the next train, “Suzhou isn’t just a little town anymore!”.

A British friend who works at a European lifestyle luxury brand maker in China told me how sales for their top of the line wares are not taking off the way they are in other countries in the Asia-Pacific region. Sales have been through the roof in South Korea, Japan and Thailand. China, though, is so-so.

“The problem,” my friend told me, “is the Chinese with money read the label and see ‘Made in China’. If they’ve already bought one of our products, they return it; if they haven’t bought it yet, they return it to the shelf.

“They simply don’t trust the quality of products made in China, and don’t understand how something made in China could be so expensive.” My friend went on to tell me that despite the designs being cutting edge and the highest quality fabrics used in clothing lines and the best materials in their appliances, the company is struggling to reach the sort of tipping point in purchases amongst China’s nouveau riche as they have in other Asian countries.

As I write in my upcoming book (Wiley & Sons, due out early summer 2012), “China Fast Forward: A Blueprint of the Technologies, Green Industries and Innovations Driving China’s Future”, Brand China has come to be associated in international markets with cheap, chintzy and unaccountable. Apparently, the Chinese think so, too.

I write in “China Fast Forward” how the most successful Chinese companies seeking their fortune in overseas markets actually remake their Made In China image into something Western, international-sounding, and bland; that is, innocuous. Others want to associate themselves with a strong Western national-brand image.

The Financial Times recently published an article about the growing haute couture business in China. Now, some high end domestic products aspiring brand-hood are designing clothes in Shanghai and having them manufactured in Italy. Just so they can have attached to them the Made in Italy label, with all the sense of style and attention to detail the image entails.

Of course, we don’t know where in Italy these wares are manufactured. An Italian neighbor of mine in China told me there are villages in Italy whose economies have been based for centuries in textile manufacture. “Now,” she told me, “there are more Chinese than locals in many of these villages.”

National brands in these days of global supply chains just aren’t what they used to be.

Technorati Tags: china, globalization, haute couture, made in china

I’ve just returned from week on business to India. I gained several deeply etched impressions:

1. I was absolutely ecstatic to return to China. Relatively speaking, it was clean, orderly and safe. It was nice being home.

2. India is full of a dizzying array of economic opportunities and will continue to have so for a long time to come, mostly because of government gerrymandering and malfeasance.

3. I have never met so many pleasant, intelligent and imaginative people as in India.

4. The Indian government’s lack of will in bringing even the rudiments of sanitation, infrastructure and utilities to its people after all this time is criminal, given the energy and initiative of its people.

6. Any competition the media promotes between the economic development of China and India is bogus. There is not and never will be competition until the Indian government truly shows its concern for its citizens by building basic infrastructure for ALL to access, no matter the socioeconomic level.

7. Despite transgressions against human rights and corruption on a systemic scale in China, at least things have gotten done and the quality of life for most of the country’s citizens is far beyond what it was twenty years ago. Now when I encounter a frustration in China, I mutter to myself, “At least it’s getting done”.

I look forward one day to saying as much about India.

Technorati Tags: economic trends, social trends

My (Chinese) wife eagerly pointed at the leather bag on the sofa in our living room. The pattern on the over-sized purse was a soup of multi-colored D&Gs jostling against one another like microbes in a petri dish washed with the blandest agar. If my wife hadn’t pointed the bag out to me as I was on the way out the door I wouldn’t have spotted it on the neutral fabric of the couch.

She said conspiratorially, “That’s the ayi’s bag. Do you know how much it cost?” Our ayi comes in three mornings a week to help with the cleaning. My wife giggled at the prospect I’d guess very wrong.” I shrugged. It was an ugly handbag and I didn’t much care our housekeeper had blown a month’s salary on fake couture. Besides, I was late getting out the door.

“It cost more than 10,000 rmb,” she announced. 10,000 rmb is nearly US$2,000. I frowned. I’m used to her conjectures, mostly deigned from the neighbors, the local television news and internet forums. “Impossible. It’s fake,” I retorted, hurriedly slipping my shoes on. Besides, the ayi, a young woman, was more disposed to wearing jeans and sneakers than touting haute couture.

She shook her head, smiled broadly. “It’s not fake, it’s real,” she said with genuine excitement. “One of the people the ayi works for gave it to her.”

“Gave it to her?” I said irritably, “Why would someone give the ayi an expensive purse?” It also bothered me the confounded thing was so ugly, in a baroque, ostentaious sort of way. It rubbed against my sense elegant simplicity – not that I’m either.

My wife said excitedly,” The woman who the ayi works for has a rich boyfriend. The man is already married, and has a lot of money, the ayi told me. He bought an apartment for the woman. He gave the woman the purse as a gift. The woman said it was ugly, and gave it to the ayi.” I could believe someone else thought the bag unattractive.

I nodded, paused a moment. At least the story made sense, given what I’d heard about the spending habits of the nouveu riche in China. Certain circles of society in today’s China are awash with so much money men can afford second wives and hideous bags that are hideously expensive.

The woman was likely annoyed at the man – probably bacause he also had to pay attention to business and to his wife – and was so spoiled she thought nothing of giving the bag to an ayi. I’m sure she was looking forward to replying to the man when he would one evening ask, “Why don’t you ever bring that purse along that I bought you? You know the one: that lovely Dolce & Gabana bag.”

Then she would respond, “Oh, I have too many purses; I gave it to the ayi.”

“You what?!” he’d splutter, spitting out his Cuban cigar.

She would flash a faint smile.

Ah, love in the fast lane.

Technorati Tags: china, middle class

Technorati Tags: chinese middle class, globalization

I type out this entry with index fingers. A few days ago a couple fingers got caught in a door that was closing too soon under absurd circumstances. Hence, I’ll be hunting and pecking the keyboard for at least another two months, three weeks, until finger nails grow back.

A recent Wall Street Journal article transported me back to the bandage-changing station at the Kowloon Hospital here in Suzhou. The hospital is privately owned by a Hong Kong group.

The nurse who changed my dressing was a battle axe, and managed to use the tweezers with which she was armed to such effect. She was heavy-set, with glasses, nearing the speed barrier of 40-years of age that seems to sour so many faces.

She was so barbaric in her attendance and devoid of empathy that I shouted at her through the pain she was uneccesarily inflicting to pay attention to what she was doing. She tore the bandages from my fingers without waiting for the peroxide to do its work, impatient to get back to text messaging on her mobile phone. One of the fingers began to bleed again.

I took the first new wrapping off myself, for her to redo, she had swaddled it so poorly. Admittedly, the doctor at the same hospital who had changed my dressings just two days before was careful and considerate, a real gentleman. The contrast could not have been greater.

The Wall Street Journal article discusses how China is suffering a dearth of skilled, educated labor able to manage in a service environment. Laurie Burkitt writes in the article: “In 2011, there were roughly 1.4 million more job openings than applicants, up from one million a year earlier, according to data from China’s Ministry of Human Resources and Social Security.”

A great deal of the problem has to do with rapid urbanization creating consumer markets for the few that should be staffed by the many who come from the countryside. Rural residents rarely have the opportunity to go to finishing school – anywhere in the world. So, job hopping and poaching are rife, while service levels remain relatively low across industries, including luxury, hospitality, and health care.

I devote an entire chapter of my book “China Inside Out” to the services dilemma in China. In my upcoming book “China Fast Forward” (Wiley, Spring/Summer 2012), I focus on the challenges the leadership has in staffing and training employees for the services outsourcing sector Beijing wants to grow.

And as for my demonic nurse: I hope – as Dante would have had it – she retires to the seventh circle of Hell, where former patients take turns changing dressings on her that reflect their own injuries, and changed in such a manner as she recalls the original incident. Again and again.

That’s how bad it was.

Chiang Kai Shek: the Early Years
Saturday, March 17, 5pm – 7pm

Come celebrate the first anniversary of the Suzhou chapter of the Royal Asiatic Society (RAS) with a talk by Jonathan Fenby on the early life of Chiang Kai Shek, followed by a reception hosted by the RAS. Mr. Fenby will trace the rise of Chiang from 1911 to 1937, against the backdrop of a country torn apart by feuding warlords, ruthless gangsters, greedy colonials and pugnacious political parties.

Mr Fenby is the author of the newly released “Tiger Head, Snake Tails: China Today, How it Got There and Where It Is Heading”. He is also author of a biography of Chiang Kai Shek and of “The Penguin History of Modern China: The Fall and Rise of a Great Power, 1850-2009”. You can read what the Wall Street Journal had to say a couple days ago about his books on China here.

He has served as the Editor of the Observer, the South Morning Post and Deputy Editor of the Guardian. He was named a Commander of the British Empire (CBE) in 2000 and a Chevalier of the French Order of Merit in 1991.

Saturday, March 17, 5pm – 7pm. The Suzhou Bookworm, Gunxiu Fang 77, Shi Quan Jie. Purchase of Literary Festival ticket required for entry (50rmb); includes a glass of beer or wine.

RAS membership applications available at the reception, so be sure to collect your pennies to join!

Technorati Tags: china, expat life

The Financial Times recently published an article on “luoci”, in which Chinese employees suddenly quit their jobs for lifestyle reasons. The article reminded me of a conversation I had a few days ago with a professional Chinese woman name Lucy.

Lucy is in her mid-thirties. She was planning on going on a retreat to a Buddhist temple. Feeling stuck in her career and stuck in her marriage, she was on a quest to find out what she really wanted. Her husband thinks she’s nuts, as her career and her “job” at home taking care of their son should be enough.

Her mother thinks it’s inappropriate for her daughter to be studying to improve herself: a mother and wife’s role revolves around the household. ”It’s ok to have a job,” Lucy explained about her mother’s sentiment, “it’s just not alright to know to much about yourself.

A Western plant manager in Suzhou told me a couple days ago one of the company’s staff tried to commit suicide on the factory site. The friend said the young woman had tried to jump out the fourth floor window of the ladies room.

Another staff worker had caught the would-be jumper by the ankle as the young lady tumbled out the window. Other women helped haul the woman inside. The plant manager soon arrived on the scene. He said the woman was shaking violently.

She was still focused on the window from which she had just been pulled. She still seemed intent on dashing her head on the sidewalk beloe. I asked my friend if he had any idea why the woman wanted to kill herself.

A Chinese associate recently invited me to high tea … in Suzhou, a lovely second-tier city near Shanghai. We drove to Jingji Lake, near the Suzhou Performing Arts Center, and parked by one of the many construction sites demarcating the city. The area is called Moon Bay, and is supposed to approximate a small European village – or what Chinese property developers believe will pass as a small European village to Chinese consumers: all low rises with peaked roofs and earthen exteriors loosely assembled around a vacant “town” square.

I have actually walked through the Potemkin village many times. It is usually empty, except for the photographers clicking portraits of young women in frou-frou dresses accompanied by their bored fiancées (who don’t understand they are actually in training on how to behave for the rest of the domesticated lives). The only viable businesses I’d ever seen operating in the square was an Indian restaurant – hugely successful with expats – and a resort-sized Chinese restaurant famous for its Suzhou cuisine, always packed with locals.

So imagine my surprise when my companion, an amiable Chinese sales director for a European logistics firm, opened the door to a Whittards of Chelsea tea shop and insisted I follow her down the brightly lit corridor. I had peered into the shop before, as an avid fan of tea in all its splendor, but had never seen anyone buying teas from the gaily lit shelves in the foyer.

The decor was straight out of an edition of House and Garden, with an emphasis on Garden. The drapes and upholstery were the sort of floral designs associated with the affluent in Anglophile countries, all framed with dark-stained wood. The place was packed with animated customers.

Tea has been a part of Chinese culture as long as there have been Chinese. Last year, according to the China Tea Marketing Association, China produced over 400 million tons of tea. Two-thirds of the production of the tiny leaf went on to become black tea. Most of the production of black tea, though, goes to the domestic market. Only about five-percent went on for export. “Stiff competition from other tea growing nations in terms of pricing and stringent quality controls imposed by importing nations have made life difficult for many Chinese tea growers,” according to the China Daily.

With the popular concern domestic consumers have about the integrity of foodstuffs grown and sold in China – including tea – international sellers have a window of opportunity to make inroads into the country with quality tea products. Once local vendors clean up their act, though, they’ll be doing their best to replicate the English tea experience.

Whittards of Chelsea is a famous English tea house and shop that for 125 years has been selling select teas, coffees and porcelain (china) to discriminating customers. According to the website of its Shanghai shop, “It offers more than 30 kinds of house teas, over 80 types of specialty teas, and around 40 varieties of fruit and herbal caffeine-free blends.” Increasingly affluent Chinese love that sort of product.

The greatest growth in individual income has spread beyond first-tier mega-cities like Beijing and Shanghai. Cities like Suzhou and Hangzhou are still seeing growth in income levels; however, not as much in third- through fifth-tier cities, like Chengdu, Yantai and Fuzhou.

The main tea area at Whittards-Suzhou had about ten tables, each of which could seat three to four individuals. Toward the back was a larger table that could seat upwards of ten customers in a semi-private area. “They have a club you can join,” my associate explained to me as we settled at our table. “It’s further back.” I asked her if she was a member. She said she was not.

The waitress passed us heavy menus. The young woman was dressed in a simple frock of floral design and wore a small cap that reminded of engravings of the bar maids of yore. I perused the generously illustrated menu. It was stocked full of teas from around the world. There were even some Chinese teas.

My companion asked me to order; she was already keenly aware of my enthusiasm for infusions. I ordered a pot of Earl Gray with oil extracted from the rind of the bergamot oranges grown in India. I looked around at the customers buzzing with light caffeine highs.

Every table was full in the place. 95-percent of the customers were women in their 30s. They dressed well, though not splendidly; at least, they were not the Gucci crowd. They clearly had disposable incomes and time to spare – likely husbands who worked at good jobs, not necessarily executive level.

My associate told me the place was popular with young people who were open to new experiences. And the price was right: for just over 100 rmb the polite and attentive waitress delivered us a strong pot of Earl Gray (no re-fills) and a three-tiered platter of finger sandwiches, tarts and biscuits, all freshly made.

After nearly two hours of conversation, nibbles and imbibing a fine brew, we still had left-overs of tart and cookies – an excellent value. Clearly, importing interpretations of tea into China at a price-point that made it accessible to the new middle class was a winning formula.

As we walked down the long corridor of the establishment to the exit a group of six university students piled into a dining room just off the hallway. They were dressed in jeans and inexpensive down coats and chattered excitedly with one another. Truly, this was a world their parents could never have known of at that young age.

An ancient brew continued to be the ambassador to the world for an entirely new generation of tea drinkers.

Technorati Tags: chinese middle class, globalization