It has been a while since I last wrote, and now I feel the typical blogger’s guilt, the same that drives some weaker souls to start all their blog posts with unasked apologies. But worry not, we are not that kind of blog. We don’t ask for forgiveness here, and that is because we already punish ourselves even before facing the public. What better penance than playing the role of a lab rat for a sociological experiment? Using our own body to test in the open some potentially lethal phenomena?

What follows contains shocking images made public here for the first time. Sensitive readers are advised to close this website now before reading on.

The laowai phenomenon

Everyone familiar with China has heard of this phenomenon. When a person with non-Asian features wanders in the country he gets hundreds of local fingers pointed at him, as he is promptly and thoroughly informed that he is a foreigner (“laowai !”). Even in the 21st century, after 30 years of reform and opening, this behavior is prevalent in most areas out of the foreign-populated centres of Shanghai and Beijing.

Although some foreigners still take offense, it is by now widely acknowledged that the “laowai call” is just  a neutral form of expressing curiosity in a country that is almost entirely uni-racial. It has also been explained as part of a socializing device that consists of stating the obvious to each other, like “Hey, you are back from work!” or “hey, you are a laowai”.

Fig1: Standard testing equipment: “laowai has come!” - “laowai has left!”

But enough theory now. This Summer we took a completely different approach and decided to test the Chinese people’s humour by entering some of the most dangerous bumpkin infested areas of the country wearing the garment in Fig 1. The sampling areas selected were: the tourist village of Zhujiajiao and a fake market in Shanghai.

The challenge was phenomenal, and the reaction of the public was correspondingly massive and spectacular, with whole streets turning their heads or popping out of windows to share in the excitement. It was a great performance of what I believe is called “Kazakh humour”, its main characteristic being that nobody is sure who is laughing at who.

Among the passers-by we discerned and duly registered in the log book the 3 following attitudes:

1. Conspirational –  Those who were laughing with us.
2. Malicious –  Those who were laughing at us.
3. Annoyed – Those who felt they were being laughed at.

Fortunately, the Chinese passed the humour test remarkably well, falling mostly into category #1, with some children and local lowbrows accounting for the #2s. We didn’t encounter any crazy patriot accusing us of hurting people’s feelings, which confirms my previous notion that those people can only be so silly when under the anonymity of the internet. In any case, this T-shirt is a must if you want to be famous in a mid-size Chinese town in the first 5 minutes of your arrival.

Some more pictures of the experiment:

In the fake market

Relaxing facial muscles after hours of being pointed at

The next challenge

If you liked this performance stay tuned for the next experiment. We have obtained the necessary gear to boratize this time an altogether different social group. Equipped with the 7” mangy moustache and the genuine garment in Fig 2, this specimen will make its appearance at the next fashion show in the exclusive M1NT bar. How will the high society in expat Shanghai (more than 50% clad in fake Paul Smith) fare in our test?

Fig 2. Whiskered specimen used for laboratory testing

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 »

This week the international observers are observing us with renewed interest: China’s Annual Central Economic Work Conference is being held in Beijing Monday to Wednesday, where the country’s leaders will decide how to maintain a stable economic growth that will “improve people’s livelihood“.

Expectations are high on the meeting that will change the World. The trouble is, it will not. Xinhua has just published a first official explanation from NDRC, containing no news. The 40BRMB for “healthcare, education and cultural undertakings”, or the 280BRMB for housing projects were already announced before the meeting. If anything, note that now they have added the “cultural undertakings” for extra flavour.

What about all the rebalancing of the economy that we were supposed to see?

Wishful Thinking

What began as a series of advice by some economists has evolved into a streak of generalized optimism, as  more people started to believe that Chinese leaders will take the chance now to rebalance the economy. I suspect this very optimistic and profusely quoted World Bank report is partly responsible for this state of mind.

But the rebalancing of China’s economy, including a social safety net, health care, and all sorts of measures to bring into the economy the 900 milion rural residents that have been left out is not going to happen now.  Because it doesn’t make sense.

Here is why:

1- Hu Jintao hasn’t been able to implement his rebalancing policies during the first half of the 11 year plan. It is difficult to imagine that the development hawks in the CCP will allow him to implement them precisely now. Especially considering that things like a health care system are costly and someone needs to finance them. How much power do Hu and Wen really have to oppose the immediate interests of business?

2- Chinese like to save money, that is just the way they are, it is a trait of character. No amount of health care or land reform is going to make them spend more in 2009. How would it make sense that the same people who were saving during an economic boom decide to spend more now that there is fear of crisis?

3- All the social rebalancing and Scientific Development of Hu might be great for the long term, but they will not help China weather a difficult 2009. The real worries of the leaders now are: How well will the system resist the social and political tensions that will arise? And how well will Hu Jintao and an already fragile Social Wen resist them in the Party?

An emergency package

But there is a more fundamental objection to the notion that the stimulus package will implement any serious structural change: it is not its role. It is an effort to save an emergency situation and avoid the worst aspects of the crisis (notably unemployment) getting too serious.

And the sad fact is that great restructurings are not done in advance of crises, they are done afterwards. Hard times comes first, then reform. As an example, a quick look back at one of the historical cases that is most fashionable these days: FDR started his famous New Deal only in 1933, well after the crash of 29. In the meantime what was Hoover doing? Investing in infrastructure, like the Chinese now.

“Social” Stimulus

So will the package improve the livelihood of the peasants? Well, if you consider that buying a new color TV at a discount price is going to change their lifes, then yes. But otherwise, not.

The subsidies to buy home appliances that WSJ mentions here are clever measures, and they will probably be effective to boost the consumption of some farmers in the short term. Which makes sense, because the factories producing those TVs have to keep running, unless someone imagines that a legion of jobless manufacturing workers can be set to construct roads and railways overnight.

But nobody should be fooled: these are no social measures. They are measures to help the manufacturing companies to find a substitution market for the failing exports.

Another related “social” measure which might be hidden in the stimulus budget is an emergency fund to cover the possible cases of layoff riots. Victor Shih estimates it in his blog to be around 120BRMB in the worst of cases. I don’t think the government would be announcing this fund publicly, as it is a signal for disaster. But if 120B are missing in the 4Trillion package, now you know were to look.

Conclusions

It is all very healthy to dream, but I am afraid the largest part of China’s money in 2009 will go to help the companies resist the crisis and to mitigate the effects of it. The leaders are nervous, and the time is not for experiments.

But enough of stimulus already. Too much has been said, and I have the feeling that there are more important things to watch right now. Namely: Unemployement and Currency.

I have done enough tea leaf reading in my posts as of late, so I will leave these two subjects for next time. But if you want to know what 2009 is going to bring us in China, make sure keep an eye on them.

Last weekend, as I was browsing the net for some material to get over my post electoral withdrawal, I came across this iconic Obama.

I didn’t know exactly what it was, but something in it looked very familiar. Very Chinese. I saved it in my Obama bookmarks, and didn’t think of it again until Sunday evening.

That was the evening when I went to the barber’s to have my hair uncut.

I like the barber down the road, I’ve been going there every month since I came to Shanghai, and by now he knows exactly what I like. This is a great advantage, because I am always at a loss when giving instructions to a Chinese hairdresser. I feel even more embarrassed when they proceed to show me pictures of men supermodels, and rather optimistically ask me to point at one of them.

But Wu Shifu will do none of that. He is a no nonsense professional, and he delivers 20 kuai worth of real styling value. A true perfectionist, he takes care of every detail and will not give up until every single hair is at the right lenght.  Every now and then he stops cutting and reaches for the little mirror with which he shows me around my own head, asking eagerly if all sides are well shaped, and secretly hoping that I will request some virtuoso manoeuvre, perhaps a re-balancing of my temples.

Like usual, last Sunday the man was doing a great job. When it was almost finished and he came up with the little mirror for the 5th time, I thought I might as well give him some little bit of satisfaction for the trouble. And, since we are at it, why not test him for Chinese characteristics.

- Is it OK this side? And here? And the top?

- Um, no, no. Too short over the top, I will have it a bit longer this time.

- Uh, er… longer what, here?

- Yes, please, can you do that?

- Yes we can!-  Snap, snap, snap.

And there he goes snapping away with his scissors, cutting the air close to my head in his efficient fashion, and probably thinking that if he goes on for long enough, my hair will have actually grown longer by the time he is done with it. After 5 minutes of cutting the air thin, while I watched the ultra boring Shenhua-Tianjin  on his TV, I decided that my hair was long enough already, and informed him thus.

- Thank you, master Wu, it looks much better now.

Click to continue »