Small Things Which Say A Lot

December 7th, 2008

For a long time, I have been telling my friends that China is not going to use its foreign exchange reserves to bail out the US and the rest of the world. Aside from the fact that China does not feel like a superpower, it is becoming apparent with each passing day that China has very real problems of its own, and is going to have use its own reserves to help itself.

Another popular argument is that the newly rich Chinese consumers will go out and spend their yuan, helping the newly poor west out of its self-made predicament.

I have a few stories to tell you which make me doubt this.

Recently, at an apartment in Beijing, I went out to take the garbage, which is in the common area of the building near the elevators. Shortly after going into this area, I noticed that the only lights in the area, which has no windows, were two low-energy consumption bulbs on the other side of the area. Nothing else was on except for those two bulbs, including the stairwell, which was completely black and did not have any lights on. Obviously, the building management company, in an effort to save electricity, had turned off the lights to less than what I would consider safe.

So these are the same guys who are going to bail out western consumers from their problems? Hmmm….

Anyone who has stayed in China for any length of time will find small cards which have a photo of an attractive young woman smiling prettily, with a rate card and mobile phone number on the back. On these cards, the young woman will offer “massage services” with services called 西班牙骑士 and 综合保健 offered. Sometimes the cards mention that the young woman is a university student.

Now, what caught my attention recently was that their rates had gone down! The most expensive package 综合保健 or Total Healthcare Package had gone down from 398 yuan to 298 yuan. My guess is that the market was pulling back, and these young women were asking for less, at least according to my completely informal China Masseuse Index.

Then yesterday I flew from Beijing to Shenzhen. On arrival at Shenzhen airport, I took a small 20+ person bus to downtown Shenzhen. During the ride, as we were going downhill, I noticed that the bus mysteriously went silent. Then, it occurred to me that the bus driver had turned off the engine to save gasoline/petrol costs and was coasting downhill until we reached the toll booth. After we reached the toll booth, he restarted the engine, and we were on our way.

Taken in isolation, I would have said that each would at most, have been an interesting and amusing anomaly. Taken together, they paint a picture of a society which is indeed worried about the future, and is doing its best to cut expenses.

So that, from the street, is my reasoning for thinking why China will not help the west. It has too many problems of its own.

UPDATE: Caijing, the leading economics and business magazine in China, has a short report which supports my observations about falling energy demand from Chinese consumers. (h/t to Bill Bishop)

How Chinese Society Is Changing

June 21st, 2008

The west never seem to tire of telling the Chinese, especially Chinese government, about how China should become a more open society, and the Chinese never tire of telling the west to shut up and stop interfering in China’s internal affairs.

The great irony is that for the most part, both sides agree on one thing: that China should become more open. It’s just that many westerners think that they should set a timetable which the Chinese should march to, and the Chinese believe that they should make the changes according to their own internal considerations. I believe that by publicly criticizing the Chinese government and policy, many well-intentioned western critics (and some not so well-intentioned), actually slow down the pace of China’s opening up because if the Chinese government and society changed more quickly, they would be seen as bowing to western pressure. That is something no Chinese government can afford to seen doing.

This is the core reason why I have so little time for most western critics of Chinese government and Chinese social reforms. At the end of the day, the Chinese government and people will have to proceed at a pace they are most comfortable with.

Some say that this is a naive approach which favors the government since, after all, they are in power. I don’t agree with this view. Thirty years of reforms have unleashed social forces which not even the Chinese government can hope to control and completely contain.

One interesting story is that of Fan Paopao, the teacher who ran away from his classroom, thinking first of his own personal safety, ahead of those of his students. Then, he wrote about it in his blog. This week, he was fired from his school, and has now become the subject of widespread ridicule.

But the true significance of the story is that Fan Meizhong is alive, and can freely speak and defend his actions and views in China. If he had had the temerity to do this 40 years ago during the Cultural Revolution, or even 20 years ago, there is a good chance that he would have been publicly denounced for the very least, and maybe have even been killed.

But he has not, and continues to defend his actions on his blog.

China has changed a lot.

It is becoming a much more open society, where different views can be heard. There are borders where the government will not countenance criticism, but as the society changes, those areas are becoming fewer and smaller. The society is becoming more and more what was called in Taiwan 多元化 or what is known in China as 多角化. This means that there are more different groups and subgroups, some of which will evolve their own subcultures within Chinese society.

Mao was never comfortable with this approach, he wanted society to be the same, right down to the dress code, not thinking and not criticizing, just obedient to him and his apparatus. Those days are gone. Like Fan Paopao, people are much more individualistic, and are not afraid to speak their minds. And they are willing to stand up for their views and take the consequences.

Without a doubt, there are groups and individuals in the Chinese government who are not comfortable with some of the changes this is leading to, but they cannot turn back the clock of reform and opening up. There may be many admirers of Mao Zedong in China, but you would be hard-pressed to find anyone who would want to have another Cultural Revolution. (In the Chinese government’s official version of history, the Cultural Revolution is referred to as a “national disaster”.)

I think of the past eight years in the US as being much like America’s version of the Cultural Revolution. After 9/11, this administration tried to push its own agenda on the American people and on the rest of the world. Their interpretation was that those who attacked New York on that day hated America for its freedoms, and that the world is divided sharply between good and evil, with no room for anything in between. This meant that there must be a confrontational struggle which will end in final victory for good and defeat for evil. Ironically, in order to defend freedom, torture, the suspension of habeas corpus and other means which most Americans abhor had to be used.

Most Americans don’t subscribe to this view any longer. We’ll find out in November.

So maybe looking past all the political and social rhetoric, the west, America and China are not that different from each other after all? The challenge is that these changes are evolving in China, and do not make the western press because they are not “news”. This is why many western critics are hopeless ignorant. They don’t understand the social context of China, choosing instead to focus media attention on single issues.

In China, most of the most important things which happen do not make news, but in the aggregate, they are indeed revolutionary in scope.

If the west and China understood each other better and looked at each other in these terms, maybe there would be a lot less misunderstanding.