Yesterday I went for a walk on Nanjing Lu and I witnessed a strange phenomenon I had not seen before: the mooncake brokers. It was last Saturday of mooncake picking season, so they were all busily walking up and down the street, scanning the crowds for potential buyers and sellers.

A bit of background: Every few moons, the Chinese celebrate some important festival dating back to the dawn of history, which they spend visiting their extended family and enjoying traditional activities together. The core of these activities involves, of course, eating things, which is why every festival is associated to some particular edible present, generally small, sweet, and roundish in shape.

Of all the very commercialized Chinese festivals, the Autumn Moon is probably the most profitable for the companies involved. The mooncake, particular snack of this festival, has the advantage of being relatively durable, and so well adapted to spectacular red and gilded packaging in the Chinese style. Under these circumstances, there is virtually no excuse for a Chinese not to give and receive the traditional present. Company to employees, neighbour to neighbour, cadre to “ernais”, for a fortnight the beautiful boxes circulate freely in the country, always given in pairs.

A lonely box of mooncakes separated from its partner

Now, the funny thing is that, as far as I have ascertained, mooncakes are not to the taste of many Chinese, who rarely eat more than half in one sitting. But this is of little importance, because few by now see mooncakes as foodstuffs. Rather, they treat them as legal tender of the Face Reserve. Failing to give and receive the appropriate amount and value of mooncakes before the Autumn moon is akin to social bankruptcy. Everybody knows the price of the major brands, so this “face currency” is as reliable as 24 carat gold.

The final result of all this is that most families end up with a surplus of mooncakes. Of course, knowing the keen commercial character of the Chinese and their aversion to “langfei”, you don’t expect them to sit on their piles of boxes. They don’t, and the whole season turns into a curious race to get rid of mooncakes before the Autumn Moon is gone and they loose all their social value (the edible value lasts a bit longer, but that is secondary). And so, the boxes received from the company are given to a neighbour, the ones from the neighbour quickly handed to old auntie Li, who gives them to her park dancing instructor and so on, each pair of boxes passing through many pairs of hands.

Fortunately for the families in Shanghai, mooncakes have an extraordinary liquidity during their 2 week trading time, partly fueled by the habit of the large public corporations to hand out mooncake vouchers instead of giving the boxes directly. All the major mooncake companies have outlets in the commercial streets to redeem vouchers. It is in the vicinity of these points, particularly on Nanjing Lu, that the street brokers set up shop. They buy the vouchers at a discount from passing employees, and then sell the redeemed mooncakes to the less fortunate self-employed and to other bargain hunters.

Saturday, the asking price for the main brands was at 50% of face value, and selling price was at 70%. The difference between these numbers is the spread, which is also the net profit of the broker.

The Nanjing Lu mooncake stock exchange

As I walked in Nanjing Street I was analyzing this phenomenon with my friend Little Yi, who was also there to redeem some vouchers.

“Wouldn’t it be better,” I said, “if the companies just gave money directly?That 20% spread is a net loss for both employees and company”

“No, no,” she assured me, “the mooncake voucher is essential, companies wouldn’t give money”

“But they do give envelopes of money in the Spring Festival!”

“But this is the Autumn Festival,” she sighed, giving me the silly laowai look. “No family wants to be left without mooncakes in the Autumn Moon!”