This is China! blog

The past month here on the ground in the Yangtze River Delta has seen activity that runs counter to macroeconomic measures in the property development sector. By all accounts, construction sites are supposed to be grinding to a halt and new projects deferred indefinitely. Instead, what I and Western friends are seeing is an acceleration of construction activity. Where for the last two years we’ve only had to bear incessant noise, dirt and dust from sunrise to sunset, now we are hearing construction activity 24/7 the past three weeks (whenever I became conscious in the shift of pace of construction). And new development projects are continuing to sprout up around us in a region that theoretically is economically mature. It seems a near-impossibility to escape the din of construction machines punching the ground or stamping steel or crunching concrete.

One building that friends and I were talking about in the Suzhou Industrial Park is still having floors stacked on its skeleton frame of concrete and steel while construction workers fix mirrored-windows to lower levels of the same structure.

We’re not entirely sure of why construction activity has accelerated recently; however, we’re sure it has to do as much with uncertainty about what the government will do next with the property sector as much as uncertainty about the Chinese economy in general. Some of the questions likely at the forefront of the minds of developers include: will the government end bank loans to developers completely at the end of the year? will they end all construction projects for and indefinite period of time? and will they be able to find buyers for their residential projects and renters for their office property?

One thing, however, is certain: the accelerated pace of construction does not fill me with any greater sense of security in the integrity of the finished structures.

Technorati Tags: bill dodson, china, construction, economy, infrastructure

This past weekend I had the pleasure of introducing Simon Gjeroe to local Suzhou residents interested in hearing dramatic tales from the China’s warlord period. We had gathered for a monthly Royal Asiatic Society (Suzhou branch) talk on Chinese culture and society. Simon is proprietor of Beijing Postcards, which sells reprints and books of photos taken by foreigners visiting China in the 1800s and early 1900s.

The warlord period in China took place during the roaring 1920s, when warlords shifted sides and assassinated each other as often as they changed concubines, and when the majority of expats in Northeast China lived in the lap of luxury. Simon gave us all a unique peek into the life and times Zhang Zuolin, one of the mightiest warlords in China during the chaotic 1920s, as chronicled and photographed by the Danish arms dealer and adviser to Zhang, Robert Christensen. He also showed a 25-minute long documentary about the era, all of which was made up of photos and film footage taken by Christensen himself.

Simon revealed that five years ago Chinese were universally embarrassed by the photos taken of the country in the late 1800s through mid-1900s. “Why,” they would ask him, “do you want to look at old photos of how poor China was?” Now, Simon said, the Chinese make up the majority of his customers in Beijing. I was astonished when Simon pointed out that nearly all the old photographic and film images of China are from foreigners. The Chinese have little idea of what their lives really were like during the end of the Qing and warlord periods.

That is, not beyond the latest rounds of soap operas on Chinese TV.

Listen to my interview with Simon here .

Technorati Tags: beijing postcards, bill dodson, china, history, robert christensen, simon gjeroe, warlords

This past weekend Paul French came out to Suzhou to introduce his latest book to the Royal Asiatic Society. Midnight in Peking is a recounting of the true-life murder of a lovely British expat in 1937, just as the Japanese are about to sweep into the city. I interviewed Paul about the book and discussed with him his motivations for excavating the story and for trying to solve what has been a cold case for more than 70-years. The book has been top of the readers’ lists in Hong Kong and Australia for the past month.

Listen to the interview here.

Technorati Tags: bill dodson, china, detective, midinight in peking, murder, mystery, paul french, peking

A British mate of mine who has worked with Chinese supply chains since the late 1990′s told me he is seeing a sea change in domestic manufacturing. He’d worked in manufacturing in Britain for several decades before coming to China. The Chinese owners of the factories in China are beginning to reign in waste in their production processes. “Before, if they screwed up an order they’d just call in another hundred bodies for pennies, have them work overnight to remedy the situation, then let them go,” he told me. “Now,” he explained, “pay rates have gotten more expensive, material inputs are more expensive, and there’s not as much business to go around. So Chinese owners are beginning to look at how to improve their processes, get the orders right the first time the most efficiently they can. That’s another reason why some of them are looking into or investing in robots to do some parts of the job. Fewer errors.”

The former plant manager put the change into context for me. “It was the same in Britain in the sixties. We wasted a lot of material, made a lot of mistakes. Then, in the seventies, everything began getting more expensive to manufacture. We cleaned up our lines, our processes. Things like Total Quality and Lean Manufacturing came along. It’s a natural process. China’s not special in that way,” he added.

China’s going to find one day that economically, middle age sucks.

Technorati Tags: bill dodson, china, lean manufacturing, manufacturing, suppliers, supply chain, total quality

The Wall Street Journal recently published an investigation into the possible causes of the Hangzhou-Wenzhou train accident of July this year. The findings coincide with research I’ve been doing on pollution created by the manufacture of “green” energy solutions, like the polysilicon that goes into the production of solar power cells.

The WSJ writes:

The problem, these people say, is that Hitachi—fearful that Chinese technicians might reverse-engineer and steal the technology—sold components with the inner workings concealed from Hollysys. Hitachi executives say this “black box” design makes gear harder to copy, and also harder to understand, for instance during testing.

“It’s still generally a mystery how a company like Hollysys could integrate our equipment into a broader safety-signaling system without intimate knowledge of our know-how,” a senior Hitachi executive said.

The Washington Post reported in 2008 that Luoyang Zhonggui High-Technology Co in Henan Province, near the Yellow River, was dumping raw, unprocessed waste into the surrounding countryside, where villagers lived just hundreds of meters away.

About nine months ago, residents of Li’s village, which begins about 50 yards from the plant, noticed that their crops were wilting under a dusting of white powder. Sometimes, there was a hazy cloud up to three feet high near the dumping site; one person tending crops there fainted, several villagers said. Small rocks began to accumulate in kettles used for boiling faucet water.

It seemed that in its rush to build its factory and production processes based on German technology, Luoyang Zhonggui had all but cut out its waste management system.

The Luoyang Zhonggui factory grew out of an effort by a national research institute to improve on a 50-year-old polysilicon refining technology pioneered by Germany’s Siemens. Concerned about intellectual property issues, Siemens has held off on selling its technology to the Chinese. So the Chinese have tried to create their own.

A rush to construct with inadequate planning and preparation; incomplete technology transfer from foreign producers and a lack of understanding of what has actually been transferred; and a blatant disregard for the dangers to human life implementations offer have concocted an industrial base in China that is unsustainable in the long-run.

What other black boxes lay hidden in China’s modernization machine?

image credit: voidspace.org.uk

Technorati Tags: bill dodson, china, crash, Hanzhou, high-speed rail, innovation, pollution, solor power, technology, Wenzhou

Last year in CHaINA Magazine I published an analysis of the implications of China building infrastructure too fast, with roadways crumbling and bridges collapsing. I wrote:

The new decade began tragically in China with the collapse of a newly constructed overpass to the new Kunming international airport, in Yunnan Province. The accident killed seven workers and injured 34. The central government has slated Kunming as a logistics entrepot between China and Southeast Asia, and between China’s east coast and its interior, with its airport positioned to be the fourth largest hub in the country.

The speed at which China is developing its road transport infrastructure is truly admirable. China currently has 3.5 million km (2.2 million miles) of road. More than half of that is low grade, according to Reuters.

Read an extended analysis note on the implications of infrastructure problems for business in “Infrastructure Quality Issues Present Hazards to Business” . (requires registration to access – free).

Technorati Tags: accidents, bill dodson, bridges, bullet train, china, collapsing, high-speed rail, infrastructure, logistics, roads, roadways, shanghai, subway

This has been an annus horribilis for China infrastructure. This year has seen wind turbines blowing up, bridges falling down, bullet trains crashing into one another and, most recently, a terrible accident on a Shanghai subway line I take several times a week. On hearing the news about the Shanghai accident my (Chinese) wife simply shook her head and said, “Everyone knows they’re building things too fast.” She told me of a program she had seen on Chinese national television in which engineers echoed the same sentiment. “I don’t want you to take the bullet train to Shanghai,” she said quickly, “and I don’t want you riding the subway in Shanghai, either. Ride your bicycle!” Of course, that’s hardly feasible with a 150 km to cover between Suzhou and Shanghai; leave alone the thought of navigating Shanghai traffic on a bicycle.”

Nevertheless, it was wise of the central authority to have slowed down travel on all the high-speed rail lines, and to order an audit. The official investigation of the Hangzhou-Wenzhou bullet train accident of the past summer was due out a couple weeks ago. Perhaps officialdom is hoping its citizens will forget they had announced they would publish the findings mid-September. The story that the signal system on the line had failed still stands. However, with the unexpected death a few weeks after the bullet train accident of the general manager of the design company charged with re-innovating and implementing signal technology on the high-speed railways, few dissenters will provide even a gentle reminder to the powers that be of their promise to disclose findings in a timely fashion.

Still, it is jarring that yet another, more stable showcase infrastructure project as the Shanghai subway system should also go off the rails so soon after the Hangzhou-Wenzhou incident. According to news reports, some time before the Shanghai accident subway staff was manually signalling directions to trains on the line because the system had failed. Seems a sort of retribution from beyond the grave.

Perhaps dead men can tell tales after all.

image credit: echinacities.com

Technorati Tags: bill dodson, bullet train, china, shanghai, shanghai subway, subway, subway accident, Wenzhou

Georges Simenon is one of my favorite mystery writers. He wrote over 200 novels in his lifetime, including the Commissioner Maigret mysteries – engaging, compact, and just plain fun to read.

Now Shanghai just might have it’s own Georges Simenon in the person of Paul French. Penguin Viking has just published his novel, Midnight in Peking. Paul is author of several books on the history of Westerners in China before 1949, and is also a well-known China market analyst.

According to the book’s website, one bitterly cold night in January 1937, just as the Japanese army is sweeping southward to capture Peking, the body of a Western woman is dumped, mutilated, in the Foreign Legation Quarter:

… It belongs to Pamela Werner, the daughter of a former British consul to China, and when the details of her death become known, people find it hard to credit that any human could treat another in such a fashion. Even as the Japanese noose on the city tightens, the killing of Pamela transfixes Peking.

Seventy-five years after these events, Paul French finally gives the case the resolution it was denied at the time. Midnight in Peking is the unputdownable true story of a murder that will make you hold your loved ones close, and also a sweepingly evocative account of the end of an era.

The Shanghai launch of the book will be at the Glamour Bar this coming Sunday, September 18, 4:30pm:

Information: http://www.m-theglamourbar.com/Upcoming-events.html
Tickets: 6350 9988 or reservations@m-onthebund.com
RMB75, students RMB20 – tickets include a drink

Try not to miss the event; I’m sure it will be huge fun.

Technorati Tags: bill dodson, midnight in peking

The Hong Kong edition of The China Daily recently invited me to contribute an article about China’s renewable energy development trends and the country’s relationship with southeast Asia. So I wrote about all the dams China is building in the south, southwest and west of the country it’s neighbors are unhappy with.The editor didn’t like the story. It might be Hong Kong, I was told, but it’s orbit is very close to Beijing’s, after all.

So I wrote another story, about how the subsidies for solar power in China will lead to even more (over-)production that will drive down the costs of photovoltaic technologies even further – a natural for archipelago nations like Indonesia, which have islands of people unable to hook into a national grid.

The editor accepted the sun-shiny story. entitled, “China may light up southeast Asia’s energy portfolio”. It’s a fine story; it’s just that it’s so … well, constructive. You’ll find it here, on page 14 of the HK edition.

Technorati Tags: bill dodson, china, electricity, energy, hydropower, indonesia, solar power, southeast asia, trends

Check out a recent Marketplace radio interview in which the intrepid Rob Schmitz interviews me during a National Public Radio report about how energy trends in China are impacting companies – foreign and domestic – doing business in the country.

Listen to the podcast report and read the transcript of the piece here.

Technorati Tags: bill dodson, business, china, energy, marketplace radio, national public radio