Last year I wrote a post about foreign entrepreneurs in Shanghai that included a Big Question with a link:  Who gets rich in China? The page attracted a ridiculous amount of search engine hits considering its dumb content, which proves that it was indeed a hot question. Time passed and I never got around to writing more, but my intention was just to echo the phrase I so often hear from disgruntled expats:

“Who gets rich in China? The Chinese!”

I am afraid I don’t have a better answer now than I had then, but recently I’ve been talking business with some entrepreneurial friends, and one problem has come up so many times that I think it is worth a post. And I hope this is useful for foreign start-ups in China to avoid making a bad decision from day zero and ending up, a few years down the line, mumbling the bitter phrase. The problem I refer to is the market dilemma, otherwise called the expat trap. Click to continue »

The mysterious ways of computer science.

Today for example, I completely panicked when I stumbled into one of the bugs of wordpress. For some reason, when you add a “click to read more” tag next to a section in bold, it goes and turns the whole blog to bold, including sidebar, titles and header. So yes, I think I have gone bold for a few hours,  but it was not intended. I hope I didn’t hurt any feelings.

The Goose Huggers

But this bolding effect is nothing compared to the vicious attack that this blog is suffering from an international band of Goose Huggers. 

I have been wondering for a while what is going on with my Goose post. It is attracting more clicking action than anything else around here, and by now it has become already the most popular of my posts. 

Click to continue »

From the post left unfinished last week. Some of the main arguments read (or heard) in China Crisis discussions:

The Time

Economies don’t grow indefinitely.  Low cycles follow high cycles and after 30 years it is about time. China cannot break the laws of economics, so the recession must necessarily come in the next X years. The country hasn’t prepared itself politically and psicologically to face this period. In the end, we are sure to have trouble.

Of course, this argument is of little value without the X, and many proponents of a time limit have failed in the past. This is the field of technical analysts and other mystical thinkers. Mythology also plays a role:  In Chinese history, cataclysms mark the end of a cycle. An earthquake preceded this crisis, and a solar eclipse is coming in July, the dynasty has lost its virtue. These arguments tend to work better with a bit of hindsight.

The Markets

The World’s economies are interdependent today. China’s economy is largely dependent on exports and FDI. The weight of these external factors in China’s growth has been much discussed, but regardless of the exact numbers, few doubt that it is a significant motor of the economy. External motors failing, China turns to internal ones: investment and consumption. Today, strong public investment, mostly in infrastructure and energy, is making up for the loss. Click to continue »

It’s been half a year since the first announcement of the Chinese stimulus package, and the time has come to look back and ask ourselves: how is the Crisis doing to-day? Well, we don’t need to surf very far to find some hints. Judging by the attention she gets  in the media, the Crisis is still in tip top form, barely upstaged by a drove of sneezing pigs, and plotting her next move in the People’s Republic.

And in the meantime, we have read so much about her that the debate gets old, the initial guessing game we merrily joined some months ago giving way to a phase of weary expectation.

So, finally, is there going to be trouble in China or not – Will the Wall Fall? I have my own opinions about this, but I’ll keep them clear off this post. Instead, I want to  summarize some ideas appeared in the sinosphere, list the main arguments from each side, and let the reader choose which make sense.  Luckily, this is the kind of discussion where the same arguments are fluently used to support all views, so the list can be made manageable.

But first of all, let’s examine the parties. In this business of Chinese Crisis Watching there are 3 main schools of thought,  which can be roughly classified as follows:

A. The Optimistic Executives:  Old China hands with long memories, bullish consultants with short ones. Optimistic people with or without a stake in the optimism of their clients. Just to list some recent ones.

B. The Academics of Doom:  Everybody knows the highest fulfilment of a dismal scientist is to announce doom and then have doom come. On the other hand, there might be something in what they say…  some examples.

C. The Rosy Men of the Republic: This 3rd group is endemic to China. It consists of a set of highly prepared bureaucrats who resolutely believe in the Feelings of the Motherland, in Santa Claus and in the Theory of Scientific Development. You can see here some of their latest achievements.

The English-speaking sinosphere is a little world, and we rarely see the big names that populate other provinces of the internet. But we do have a great advantage: debate here is relatively free from partisan politics.  There is not much in the way of left-wing China blogs, for instance, and American republicans don’t go about throwing  green tea parties just because grandpa Wen announced a healthcare plan. 

In fact, the left and the right in China are conveniently concealed behind the red walls of Zhongnanhai. There are few leaks, and the real data which analysts use is pretty much available to anyone with an internet connection and some notions of mandarin. This is a level field where you can browse around, draw your own conclusions, and enjoy your tea leave reading with Armstrong’s great cover of  ”La vie en rosy“.

But enough if the rosy chit-chat. Here’s the points.

Chinese ultra-blogger Han Han is starting a magazine. He announced it previously on his blog, and his last post is already giving the details to send in article drafts and job applications. I learned this last night from my friend 2Ting, who was eagerly preparing her CV and intro letter. The literati of the post-80s are very excited, it appears.

Han’s magazine, which still doesn’t have a name to avoid imitations, is presented in this blog post. A very Chinese and a very Han Han announcement, interesting for several reasons. But before I speak of it let me give some background on Han Han. I’ve been planning to write about him for ages, and never found the time until today.

The man

Han Han is 2Ting’s idol. He is also the idol of thousands of others post-80s Chinese, and he has become – in spite of himself-  a symbol of this often caricatured generation. His bio is interesting: while attending middle school he won a first prize in a famous literary contest, then he dropped out of high school and started writing  popular novels and driving race cars. By now he has become one of the best selling authors in China, and, if I got my stats right, the most read personal blogger in the World. Click to continue »

Oh dear. This is a disaster. I haven’t written anything for a month!

Now is when I have to come up with some good excuse.  Like:  Spring has finally come to China; I have been travelling a bit in the dusty real-sphere of Shanxi; a band of homeland friends cheerfully invaded Shanghai, bringing with them some good Rioja wine.

The cat got my blog, what.

Of course, the real blogging spirit never dies. The blogger mind is a highly evolved mechanism, constantly absorbing stimuli from the environment and processing them into hot controversy.  When not at the computer, he will continue to blog the pub over the old pint of Tiger, moderating the comments of his table-mates whom he suddenly addresses as “subscribers”…   This behaviour led to some critical situations, and soon several of my friends were inviting me to kindly  get back online. At my earliest convenience.

And now that I’m back, the creepy thought:  what has China been up to all this time? 

Be advised, reader, that I haven’t opened a newspaper for the last 3 weeks. This is more than enough for a  fast country like China to change itself beyond recognition. For all I know, we are still in a socialist system with Chinese characteristics, governed by a mysterious CPC oligarchy, still doing quite OK  in a World crisis that somebody else started, and glad to point this out at every possible occasion. God, last time I checked we were asking the US to dump the dollar and start using some World wide currency. Like in Star Trek!

I hope I can get back in the loop over the weekend, and normal service will resume promptly.  Thanks for sticking around.

There was some buzz last week on the Chinese internet about this supposedly new concept of  Online Democracy. The excitement started with the weird “elude the cat” story, and then continued when Premier Wen JiaBao chatted online with “internet friends” .  David Bandurski of the China Media Project, who has been watching these things for a long time, was rather sceptical, although  some interesting ideas appeared in his comments.

I go back to this because I am surprised there hasn’t been much said about the internet chats that for the first time have been organized with legislators participating in the NPC-CPCC Annual Sessions. Where has all this gone?  Not even the Chinese language internet seems to be very interested, judging by the search 网络民主.  It is obvious that without a strong push of the propaganda machinery the “internet friends” don’tpay much attention to these initiatives.

And why didn’t the State Media push it this time? Perhaps they are bored of it already, or perhaps  not everyone was very hot for the idea of “online democracy”. For example,  NPC chairman Wu Bangguo, one of the strong men in the politburo standing committee, who made these encouraging statements yesterday.

In the end, it is not so much about democracy (that’s too big a word for the NPC), but more about trying to give it some sort of role in participatory politics that would allow the legislators to take into account at least some requests of the public. The problem is, this year again, the NPC has given an image of being just a big annoying “Carnival”,  where the guest’s only role was to clap at the words of Mr. Wu.

Did I say the only role? No wait, the deputies  also have the duty of making proposals, and some of them must be pretty talented, judging by their phrases “amazing like thunder”.

ULN takes you for a browse

But follow me for a minute as I browse the Chinese internets, see what interesting things we can find on this subject. A good place to start is izaobao, with their daily roundup of bloggy stories: Click to continue »

Oh, thank you, thank you Xinhua and thank you editor Yan.

Thank you for adding now pictures to your yesterday’s article :  China’s “scientific development” works to counter economic downturn. And thank you for choosing the most beautiful of the slides you published last week, the one which I call:  “La vie en rosy”

Now it has the completeness I was looking for. I will keep your article for further reference in my database of Crisis Commentary, and I will look at your slide every time that Shanghai weather makes me feel down.

Xinhua has come up with the most brilliant in-depth analysis of the economic crisis that we’ve read to date.

BEIJING, March 8 (Xinhua) — China’s relatively fast economic growth has caught the eye of the world at a time when most of the countries are experiencing the full wrath of a raging economic slowdown.

As some Western media questions why China works, the world’s economic experts and scholars are also wondering the same thing: What tools China has to keep its economy resilient and why it is well-positioned to weather the financial crisis?

The answer lies in the nation’s unique growth mode featuring a “scientific outlook on development.”

Economists and bloggers of doom, read and learn.  For the sceptics, this editorial is based on the work of recognized specialists, such as:

• “Analysts”
• The vice president of Stellenbosch University
• The Colombian ambassador to China
• “The international community”
  
• Velia Hernandez, professor from the A.N. University of Mexico

And many other “economic experts and scholars”.

Finally,  science at the service of the community.  And the question is, what do I do now with my two months worth of canned tuna?

Ever since I opened this blog the problem of credibility has been in the back of my mind. These days, the comments of a tenacious part-time troll, as well as some recent events that shook the Chinosphere have brought back the subject to the top of my agenda.

It is well known that Chinablogs* (defined as blogs about China in English) are only a tiny part of the Chinese internet, and their readership is insignificant compared to their Chinese counterparts. But it would be a mistake to dismiss them as irrelevant. For some time already, especially after last year’s  events – Tibet revolts and the Olympic torch saga were a turning point -  readers from all sides have questioned the media’s impartiality regarding Chinese politics. Just or not, the fact is that these accusations have cast a doubt, and many have turned to blogs to try to find an independent point of view.

Some things make me suspect that the influence of Chinablogs in shaping the World opinion about China is more significant than their size might suggest. The famous #cde affair, where a well known entrepreneur and blogger in China caused the RMB/dollar exchange to move after a post on his blog, forcing the Chinese government to issue an official notice, confirmed this idea. Also, the world media are sending some of their best writers to China, not to become correspondents as used to be the case, but to open a blog and speak about what they  see outside their window – among other things.  Blog sceptics might want to look at this Boston Globe article to see just how influential blogs can become.

And here is where my question comes in: what legitimates  Chinabloggers to give opinions about this country, its politics, economy and other fields that affect the well being of billions of people?  Where does our credibility lie? Are we misrepresenting ourselves as experts in China without any serious basis? Click to continue »

Today I am starting my review section with one of the books on Chinese economy that has impressed me most in the last year, “Capitalism with Chinese characteristics”, by MIT professor Huang Yasheng. It is a book that clearly stands out from the recent China books, and it might be destined to become one of the big references in the field.

There is no shortage of good China books in the last years. Many are written from a business perspective, by people with first hand experience who will tell you exactly how things are done here. Others look at the available economic data and build interesting theories to explain them. Few go deeper than this, to look into the heart of the matter: the politics behind the Chinese economy.

The problem is:  it is so difficult to obtain reliable information on Chinese policy that most efforts in this field turn into circular arguments over the same limited data. Professor Huang breaks the circle by going back to the sources and questioning directly all the mainstream assumptions, leaving many of them upside down. The situation in China requires this approach, as he says in the preface:

In studies of American economy, scholars may debate about the effects of, say, “Reagan tax cuts”. In studies of the Chinese economy, the more relevant question would be, “Did the government cut taxes in the first place?

By going back to the archives of what, in his own words is “some of the world’s most medieval record keeping”, Huang Yasheng is able to come up with a whole new picture of Chinese economic policy in the last three decades. This book is the result of painstaking archival research into rarely examined files, such as a “22 volumes compilation of internal bank documents” or the archives of the Ministry of Agriculture.

A qualitative leap from the classic tea leave reading, and one that deserves some careful consideration, even if the conclusions drawn will not be to the taste of every reader. Click to continue »

I have a bunch of friends back in Spain who are always quick to send me the juiciest China news coming up over there, and to supervise that I’m fulfilling my duties as a bridge blogger.

This time I have received a couple of links from Spanish newspapers El Pais and El Mundo where there is evidence of at least two different Chinese industries that continue their cheerful expansion to the West in spite of the World Crisis: These are the industries of Shady Barber Shops and Mahjong Gambling Dens. Fourteen of them have been closed down in a recent police raid in Barcelona.

These are the two articles, one very recent, one from last year:

In recent months local residents of the districts of Eixample, Sants-Montjuïc, Gràcia, Horta-Guinardó and Sant Martí, had brought to the police their suspicions that many hairdressers opened recently by Chinese citizens were something more than to cut and dye hair.

Yes, how perspicacious. I never knew of these things  during the three years I lived in Barcelona. For linguistic reasons I had quite a few friends in the Chinese migrant community over there and I frequented the Chinese areas of the city. As far as I know these FDIs must be very recent.

Anyway, so much for the Chinese hairdressers’ expansion. Although gambling and prostitution are not among the Rights that this blogs stands for,  I can’t help feeling a bit sorry for those Chinese that see their  business seized by the police. Something must have gone wrong with their otherwise perfectly profitable business model. Perhaps they didn’t remember to “glocalize instead of globalize”. Perhaps the local police superintendent is not keen on Asian chicks, or maybe they chose the wrong hand to oil. Who knows.

The New Iceland?

Since we are at it, and on a completely different subject, check out below this scary chart of Spanish unemployment that newspaper El Correo published this week. Two little thoughts:

First, I am seriously afraid that Spain is going to turn into the next Iceland. The growth of these last years was so based on the real estate bubble that troubles could be smelled all the way from China. Am I going to turn into a poor immigrant in Shanghai working my ass off to send money back to homecountry? It would be an interesting role reversal, after all the Chinese I met doing exactly that in Barcelona. Oh well, it was  inevitable at some point, I guess, I just never imagined it could come so soon.

Second, as an engineer I note again how numbers and charts are powerful tools of manipulation. The chart below  goes so high on the Y axis that it almost needs logarithmic scales to fit in the paper. A mere problem of the units chosen, of course… or of the number of copies the newspaper wishes to sell.

Inversely, it would be very easy to make this graph look flatter with a more harmonious  objective in mind… CCTV, take note, you might consider hiring a specialist like me to re-engineer your charts and numbers for harmonious results. But then, what do they care, they simply would not publish the negative charts.

(yes, it is CCTVbashing week this week)