I never thought of this before, but when I was asked this week which was my favourite province in China, I naturally answered Zhejiang. I have been travelling there again on QingMing holidays and I have been reflecting what a remarkable place it is.

Zhejiang is the smallest province in the mainland, just a bit larger than the Chongqing municipality. But in this small area it contains some of the most beautiful places to visit in China. From the imperial gardens in Hangzhou to the islands off Ningbo or the beautiful cloudy peaks, it is like a whole China in miniature has been condensed there for the traveler to visit conveniently.

But it is for people watchers that Zhejiang is most remarkable. The almost 50 million people packed there have managed to get the highest GDP per capita of any Chinese province, something even more impressive considering it contains no major cities, and it is usually taken as an example of development through local initiative as opposed to the models in Shenzhen, Shanghai or Tianjin. Click to continue »

This business trip in Sichuan is really full of surprises. Today we went to visit the Project, a giant industrial complex which will be, upon completion, the largest factory in the World to produce X. A typically Chinese megaproject on the bank of the Yangtze.

But the surprise came when we went to town for lunch, and I found out that the river that flowed into the Yangtze at that point was called the Wu. I hadn’t realized before, because the industrial park takes a different name, but sure enough, our client confirmed this point: we were in the riverside town of Fuling.

If you have read the classic China book “River Town”, you know why I was so thrilled. If you have not, then go and get it now. Since you are reading my blog, chances are you are one of those crazy Westerners that seek to understand the Chinese. This books explains them all for you, and in the process it gives you a rare glimpse into the life of inland China. It is fascinating, especially if you don’t live in the country already.

The Book

I am taking this chance to do a little review of River Town, so I can start to catch up with my old plans of running a book reviews section. Considering this book is relatively old and already well known, I will just stick to the main points and try to keep this post reasonable.

The story is very simple, it tells the experiences and feelings of the author during his 2 year stay as Peace Corps in Fuling, a third tier town on the Yangtze.  Nothing really happens, except that it is inland China in the 90s, and everything happens. The book is enjoyable from the beginning, almost every page right to the end.

Here are the key points as promised:

- Very enjoyable natural writing, with vivid descriptions of the places and the people. One of the best examples I know of literature meeting anthropology. Memorable is the description of the Fuling streets and their “stick-stick soldiers” in the initial chapters.

- The author is a fine observer, and he has the advantage of direct access to his students, who write down for him their opinions about a variety of subjects. One of the main highlights of the book is the contrast between the Fuling and the Western mentality, expressed on the background of the classics of English literature.

- For the sake of balance, some points I liked less: towards the end the  book looses some strength (not surprising, after the great first half). The scientific detachment of the author can become a bit exasperating, and sometimes it feels like the anthropologist has taken over the writer. The last dramatic scene with the mob doesn’t help to fix this, and I couldn’t help feeling that it was an unnecessary addition. But then, that is only my opinion, and I was never in Fuling in the 90s.

The River Town

From what I have seen today, the town of Fuling is doing pretty well, changing so fast that it is almost impossible to recognize it in the descriptions of the book. For one thing, it took us less than an hour to get there from the center of Chongqing, which qualifies it as a close suburb. This is in great contrast with the backwater river town of the 90s.

Now the Fulingers are going to have some World class production facilities, and a good part of the population will be working there, with thousands more coming from all over China. It feels strange to realize suddenly that I have become myself one of the characters (although a very secondary one) in the story of the transformation of Fuling.

There seems to be only one thing eternal in China, and that is the masses of the working people, the “laobaixing”. Sure enough, the stick-stick soldiers are still there and in good shape, running up and down the stairs with massive loads hanging from their bamboo poles. For them, nothing has changed.

It has to be my lucky day. Today’s marathon meeting in Chongqing was aborted mid-session, and we had the whole afternoon for ourselves to explore the city in the mist.

The place feels like all the energies of China concentrated in one tiny peninsula. The result is not beautiful, perhaps, but it is intense.  By dinner time, my colleague was disappointed that we’d failed to spot any picturable monument, so I asked a taxi driver to show us the views.  He took us to this breathtaking spot on a nearby mountain called “One Tree” (一棵树):

Below, in the middle of the Yangtze, lies the city of Chongqing, and this view was in itself worth the visit. It is the best skyline I have seen in China.

It is not he buildings themselves, they can hardly compare with the towers of Pudong. It is something to do with the round perfection of the scene, the glowing isle on the Yangtze,  and the sudden revelation that there is some higher order in the dusty chaos below.

My colleague summarized it in a single phrase, that can be more or less translated to English: “She was beautiful from far, but far from beautiful” .

I am back to Shanghai with some interesting anecdotes and some mildly funny pictures of Japan. Unfortunately, I will not be able to post any of that,  because this week I am busy with work trips in China, and especially because this is the HSK week. It is just as well, I guess, after all this is not Japanyouren, and there are funnier travel bloggers out there if you are looking for a laugh.

Before I disappear for a week into my studying den, let me explain you again this business of the HSK. It is short for 汉语水平考试，or Chinese Level Exam, and it is the official standard to measure your level of mandarin, accepted by all universities in the mainland. It is also a very crazy exam, designed to squeeze out of the examinee’s brains as much linguistic information as possible in 3 hours, and then put it down in measurable statistical terms.

As it happens, the HSK is an exam that does not mainly measure your level of Chinese. It measures your determination, endurance and sangfroid, and your faith in a better life after the bell. The good side of it, apart from hardening your soul, is that it gives you a good taste of the ultracompetitive Chinese education system and their university entrance exam. It is even reminiscent of the 科举考试, the old imperial examination to select the bureaucracy, which famously caused some of the candidates to lose their wits and become heavenly kings. For a foreigner who is serious (deranged) enough to try to understand China, this experience is essential.

But back to the facts: This Saturday 17th is the HSK advanced, and I am going to fight for a level 9, out of 11 possible levels. I need to get this degree desperately, for the sole honourable objective of beating my own record. This is the Olympic spirit.

My practice essays with thoughts on the Four Books

Here are some details of the exam: the reading section contains text with a total of over 4,000+ characters, the equivalent of some 10 pages in a standard format novel, and on that text you have to answer 15 questions (not choose a,b,c,d, but actually answer with a sentence). There is a total of… 15 minutes for this part. I tested with a native Chinese friend and that is the time she took just to read the text at normal speed.

The essay writing is another scary part, because you get so used to typing with the computer that when it comes to handwriting characters you don’t even know where to start. At least here you do get 30 minutes for an essay of 400-600 characters, so you actually have the time to read what you are writing, and to consider if you really want to express your own point of view in an exam which contains exercises like:

“The concept of scientific development leads our people towards a more ——- society”  ( a-harmonious, b-harmonic, c-harmonium d-hormonal)

This example is not exactly literal, I am quoting from memory. The point is the HSK has a strong Beijing flavour, and some of the phrases are taken directly from CPC handbooks and the helmsmen’s theories. In a way, it feels like the Four Books of the imperial examinations all over again: the Thought of Mao Zedong, the Theory of the 3 Represents, the Concept of Scientific Development… As the old saying goes: All things they’ve changed, and nothing has changed.

First impressions are usually mistaken, but they are also interesting because the eye is alert to any novelty, and the culture clash is rich with ideas. Warning: this post contains sweeping generalizations. Take it for what it is, and if you are serious about understanding Japan you might want to look somewhere else.

I came to Japan quite randomly, I wanted to spend the holidays in a quiet and relaxing place,  and in the week of the Chinese National Day, Japan seemed the only place near enough with the right conditions. I am preparing for the high level HSK later this month, and the plan was to take a few hours a day to practise my characters.

I chose the South of Japan on purpose, with the vague idea that they would probably be a bit more relaxed than in the North, and therefore more suited to my Southern European nature. I soon found out my assumption was wrong.  For one reason, there seems to be no such a thing as “South Japan”. Although this place is clearly in the South, they call it West Japan.  And the character of the people here is diametrically opposed to any notion of latin indulgence I might have harboured.

The cultural shock came right from the first contact. It was the passport controller at the airport of Fukuoka. I had been given the immigration card in the airplane and, like usual, I had quickly filled my “address on destination” box with a lazy “Hotel Nagasaki”. I couldn’t remember the real name of the hotel, and anyway these things are never checked in any reasonable country. In Japan they are.  And that is how I met my second Japanese.

“What did you write in this box?,” said the inspector when I was led to his office, pointing at the place in my card.

“Hotel Nagasaki?” I said.

“There is no hotel by this name”.

“No, no, I didn’t mean it literally,” I explained, “It is short for ‘a hotel in Nagasaki’.”

“Reservation receipt please?”

“Er.. it is in my mailbox, I haven’t printed it out.”

And they took me to a series of offices until they found a place where I could connect to the internet and produce my hostel reservation from hostelworld.  This took about an hour, enough to convince them that I was a dangerous outlier, so the inspector led me to the searching department.

My third Japanese was an older man who did the most meticulous search I have seen in my life, even feeling with his bare fingers all along the sole of my well seasoned travel socks. He searched into every possible hiding place in my bags and my body, except for that precise one that you were just imagining.

All the while, the three of them -my first three Japanese -  treated me with scrupulous respect, constantly smiling, and polite to the point of scary.

One of the things that was shocking in my first dealings in the shops is the “hi!” sound that they emit all the time, to say hello or to hand you something. It comes constantly and accurately, timed like a semiquaver, dressing any human exchange with a singular martial tone.  But the most awe inspiring feature is their absolute, compulsive, anal obsession with cleanliness. This country must be the cleanest place I have seen in the World by a large margin.

I came to this conclusion during lunch in one Western cafe in Nagasaki, were I witnessed some peculiar behaviour. It was raining outside, and every time a new client finished paying his order, the cashier walked around the bar with a clean tissue and bent down to wipe the drops of water left by the client’s shoes. A completely unreasonable action, even for safety purposes, because the other side of the cafe next to the entrance door was permanently wet and left unwiped.

The only explanation, I figured after a while, was that the entrance area was out of the field of vision of the cashier, hidden by the tables. It wasn’t a safety procedure, it was just that she just could not bear the sight of some drops of water on the spotless floor in front of the bar, even if it was almost pure H2O from the immaculate street outside.

I am impressed by this aspect of the Japanese culture, and I wonder how  the thousands of Japanese living in Shanghai cope with the hygiene situation there. I guess this explains why, being by far the largest foreign community in Shanghai, we see so little of them. They must all stick to their Gubei compounds and restaurants and avoid leaving the area unless it is strictly necessary.

The service in the restaurants here is excellent, and the food is prepared with so much care that you actually feel sorry to eat it. The Japanese like things well done, and they manage because, like most Chinese, they are very hard workers. But there is an essential difference in the motivations: Chinese exert themselves for a dream, to buy a car or a better house, or just to avoid being left behind by their fast ecoomy. Japanese already have all those things. Like Westerners, they have little left to dream that can be bought with money.  So it seems that they  work for the sake of work well done, out of a strong sense of duty and perfection.

When I came to Japan, I was prepared to find meticulous people who revere order. I thought it would be somehow similar to Germany, and although that kind of country is not exactly my idea of fun, it definitely fitted the bill for my week of retirement and study. But Japan is not even comparable to Germany. As far as I have seen it goes further in the field of obsession, to an extreme that for a newcomer -a Southern European one, at any rate- feels like borderline pathologic.

I don’t want to judge the character of the different peoples.  Each culture has its own ways, and all is well as long as we get along. I just wonder if the little world of efficiency and perfection that the Japanese have built around them is not but an exhausting illusion, and if, somewhere in the middle of all their productive activity, they find the time to think of what is important and just enjoy. The people I am meeting here-starting from the fourth one- are positive and friendly, and I have no reason to suspect they are not contented.

I have just been speaking with a PhD in electro microscopy who is in Nagasaki for a World congress in the field. He tells me that more than half of the participants are German and Japanese, because these two countries rule in electro microscopy applications. Somehow I am not surprised.

“It is a good thing we have Japanese and Germans,” I told him, “Otherwise we would be in trouble to wipe the dust between the atoms”

The other day I saw a tourist bus from Nanjing that caught my eye. On one side the name of the travel company was written in Chinese characters, and below it there was a text written in a mysterious language:

“ISGNOG NAIXUOY EHCIQ UOYVL NAITGNEH GNIJ NAN” 

Initially I thought it must be Uyghur, but then I realized the combination of letters was bizarre even for that language, and it led to some diabolical phonetics. A satanic chant? A magic formula? After a while I was too curious to leave, so I had to ask the tour guide who was sitting inside.

Can you guess the language before you continue?

Click to continue »

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

You haven’t really seen a city until you have been to its zoo. I have known this fact since I was 5 years old, and after many years I suddenly remembered it again last Sunday, and I decided it was about time I went to the Shanghai zoo.

When you grow up you realize zoos have a good side and a bad side. I still enjoy watching a tiger as much as before, but now I have more of an environmental conscience, and I can’t help a sense of guilt at the thought that my joy costs its freedom. Fortunately, the clever sign at the entrance reassured me that the animals environment was taken care of.

NOT!

I was shocked by the behaviour of a big part of the Chinese visitors to the zoo. In spite of all the forbidden signs they kept throwing all sorts of food at the animals. Parents encouraged their little kids, and they all made fun when a monkey could not open a sealed packet of chips or a can of soda. Dozens of people watched and laughed, and nobody thought it was wrong, no guards to be seen either.

They were putting the animals in danger of cuts, poisoning, etc, and in the same time they made the cages so dirty that some animals were literally living in a garbage dump. Some kids were also putting themselves in danger by jumping the security barriers or hand-feeding monkeys.

But what made me saddest of all was to see the king of the junkyard, the Lion, who was taking a lazy nap after lunch. The public had come to the zoo to hear it roar, and they would hear it roar. In 5 minutes I saw 3 bottles of water full of water fly towards the lioness head. She was so used to it that she didn’t even move when she got hit in the paw.

What’s up with Shanghai? I am really surprised because I always considered our city a civilized place. How can people have such little respect for those beautiful animals? And how can the council allow this to happen? I hope somebody puts an end to this situation immediately, it hurts the animals, and it gives a sad image of the city for the Expo.

For comparison I add a picture I took in the zoo of Pyongyang, were as far as I know I was the only visitor of the day. I complained that the animals received political indoctrination, but otherwise the place was much cleaner than Shanghai zoo.

BTW: Kim never travelled further than Russia.

Have you been watching Xinjiang TV these days? I am a fan. It’s the new Love TV, a 24-7 concentrate of all the corniest efforts by the Chinese official media to promote harmony after the events of 5th July. Smiling kids, flowery dances, long meetings of interethnic neighbour associations discussing love and togetherness. Best served with tequila, lemon, and a grain of salt.

But seriously. It’s been a month since the events of Urumqi, and it feels like there hasn’t been much done in the way of analysis. All the channels of the media were red hot for a week, but they cooled down as soon as the blood dried on the streets, and no new insights are forthcoming. Too soon the debate has been hijacked by unproven claims of opportunists like Kadeer, and the predictable responses from China. The peace loving Uyghurs and Han who lost their lives in Urumqi deserve better.

So yes, I am consciously watching XJTV, and I suggest you do the same. For lack of anything better and in protest against the rest of the media establishment, both Chinese and foreign. Because no matter how awkward XJTV’s efforts might seem, at least this TV station is doing its job.

The events of Xinjiang are more important than the bland Summer coverage would lead us to imagine. It is probably the most deadly single political riot that has happened in China since Tiananmen 1989. It is also the only major case of social unrest where the international press has been granted permission to report from the ground. And there are important lessons to draw from the experience, particularly in the fields of 1- Media and 2- China’s policy.

The Chinese Media

I am and I will always be against State-controlled media, and every person I respect here, some CPC members included, agrees with my point of view: without the freedom to blame, all comment is meaningless.

But precisely because we don’t believe in that media, we don’t expect too much from them. After all, it is not the fault of the writers or editors if they live in such a system, not everyone can be a hero. From this relative point of view, we can say that the Chinese media – or the CPC, which is the same in this case - has done a good job.

Indeed, one interesting phenomenon in the aftermath of the July 5th events is the media’s role in calming things down on the Han side. We made fun of all those silly heart warming articles, but probably the love talk was crucial at a moment where ethnic feelings were getting out of control. How many times in the World have you seen interethnic clashes* killing more than a hundred to simply peter out in 2 days with no more than moderate force applied by the State?

By choosing to focus on the positive, turning the blame on external elements and being loyal to the principle of harmony, the Chinese media did a valuable service to their country and probably avoided many more deaths. This might seem obvious now with hindsight, but it might have been just as easy for them to try to appeal to the pride of the Han and disaster would have ensued.

The Free World Media

But what about the media from the free World?

The Xinjiang events were of particular interest for many of us following the debate of anti-China bias in the Western media. In the highest point of the discussion, after the Tibet 2008 events,  the Western media always had the point that, since they had been banned from the area, they couldn’t be held accountable for inaccuracies in their reporting. Now we have the first major riot where this argument is not valid. The time is to evaluate the results. How well have they fared?

In my opinion, it has been disappointing, at least for two reasons.

1- In a large part of the media there was a clear prejudice against the Han and against the authorities. Not all were as extreme or ignorant as this example, but the principle was clear: their mission was to witness how inhuman the Chinese system is. Even if some of them later moderated their reports, the harm was already done, and when travelling in Europe mid-July I found it a common opinion that “China is slaughtering its minorities again”.

2- Fortunately, free media IS to some extent free and diverse, and we have seen some examples of fair reporting from the ground. In particular I was following the Telegraph journalist Peter Foster, who did a great job of reporting honestly what he saw. And then, I got to this article, only 4 days after the events, and to my despair he announces that he leaves on holidays. Like blogger B&W Cat noted, almost all the others soon followed suit and, to this day, nobody has told us what really happened in Xinjiang.

In the meantime, Xinhua and the others stayed at their posts, showing the Chinese and the World who really cares about Xinjiang, and who really cares about China.

Some Conclusions

There is something very wrong with the World media, and it is something much deeper than a anti- or pro- China stance. It has to do more in my opinion with how it is organized. Remember the line:

By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.

It is a pleasure to read Adam Smith and imagine that, indeed, the invisible hand is working every day to make our lives better. And yet, this example has made clear that if there is one industry were the hand cannot work it is the media. That is, of course, unless we accept that its role is to produce “the truths we like to hear” in the same way as the role of Apple is to produce computers we like to use.

Because that is exactly the problem. The minute the media sees that there are no obvious CPC crimes, that the police is handling the situation well, and that actually a communist authoritarian regime sometimes does things better than a democracy, this is not interesting. It is not even about political lobbies or advertising companies’ pressure, it is simply that most readers don’t like it. It is more comfortable to live with their solid categories, Islamism bad, communism bad, democracy good. And the invisible hand says: journalist shut up.

There is a lot of talk on the internet about the future of traditional newspapers, and many are analyzing the reasons for their demise. Well, how about this one:

There has been a major political riot, the most deadly in 20 years in the most important rising country in the international scene, and the media has still not even attempted to explain the reasons behind the events, instead working full-time as a mouthpiece for a self-appointed leader in Washington with very dubious legitimacy, and who might possibly be connected with the terrorist group who has organized the killings of more than 100 people.**

I am not so idealistic to think that internet and blogs are going to change the situation. The information lobby will always be powerful, whatever the shape it takes, and in the end the mainstream reader will always read what he wants to read.

For the people who care, the only hope, now as always, is in diversity. And fortunately the internet works in the right direction for this. Visit this link for just one example of how a blog can provide you –if you take the time to read carefully- with better commentary than your Sunday paper.

* Interethnic clashes:  whether or not the initial violence was organized by terrorist elements, by the time the Han mobs went out with bats it clearly became an interethnic clash.

** More about this upcoming.

Some pictures of my recent travels in Shanxi & Shanxi. As with past editions, 5 words per picture.

The Shanxis have solid history 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.

More bad news about the Crisis. Yesterday All Roads had another of those worrying posts: 3 Announcements and 2 Rumours, and not one of them good.

Still, on our return from the double New Year’s season, many of us are suprised to see the sky is not falling on our heads, and the dire predictions we did before the holidays have not quite turned true. Indeed, the Crisis in China seems to have a very annoying quality for bloggers: it is not happening. Yes, we’ve had bad news coming every week for the last months, we’ve seen experts we respect telling us how bad the unemployment is, how many factories are closing. And all of them are right, if we look at the numbers. Yet, on the street, no Crisis to be seen.

What is going on here? Who is taking our Crisis away, depriving the dismal scientists of their fair share of joy and fulfilment? And more importantly: is it not time to deem the whole affair a bluff, and go join the ranks of the optimistic, together with the guys at the World Bank and the CPC?

Where are all the Crises Gone, long time passing?

You might remember that post I wrote where I started out wondering about the different perceptions of the Crisis in China and in the West. 3 months have passed and this contrast is, if anything, sharper than before, as I have seen during my New Year’s travels. Right now Europe is bleeding, there is no question about this. China, on the other hand, looks to the casual observer like a normal, almost healthy economy. One cannot sense the Crisis.

In Shanghai, Zhejiang, Fujian, three of the engines of China’s economy, I have seen nothing going on but normal everyday life. The shops are full of people, “we hire” signs are on the windows, and taxi drivers remain for the most part optimistic - at least those who didn’t buy shares. One of them even told me: “Riots only happen in Guangdong, in Shanghai we are civilized”

Back to the office, in my work with industrial investors in China I see the same picture: while some Western clients have cancelled or postponed their 2009 FDI projects, not a single project has been stopped by our Chinese clients, which are all large SOEs.

The time’s for the Ox and don’t give me no Bull

Here are 3 reasons that might explain this strange gap between theory and observation: delay, transparency and inertia.

• Delayed effect: The crisis comes to China in a very different way than to the West. In our case it was a bursting financial bubble,  hitting us all with the speed of sound. In China, it is different. They didn’t have the “complex financial instruments”,  their financial system was relatively isolated. In China the Crisis is caused by exports and FDI, which is a far less explosive mix. Look at FDIs, for example: a typical project cycle to build a factory is 3 years, and there’s a point of no return somewhere in year 2, when the construction is mobilised and the equipment paid for. This introduces a long delay while the ongoing projects finish and until the absence of new projects cause panic in subcontractors. Same effect with the production of factories which had a large backlog in 08.

• Inertia: China is a massive system that has been moving at high speeds for 30 years. This doesn’t stop in one day. It is not only the phisical momentum of the thousands of ongoing projects, it is also psycological inertia. in the minds of many Chinese the system is strong, and there is no reason to believe in a Crisis that has never happened in their working lifetime. Behaviours do not reflect fear, and many go about their New Year’s shopping like any other year. Worse still, some seem happy to believe that it is America’s fault and this is an American Crisis; and mind you, not all agree that smart China need lend the old brother a hand.

• Transparency: This is the most important reason of the three, and the one that scares me most. For all the good things that one can say of CPC’s economic policy (yes, they did draw 300million out of poverty) there is one serious fault that nobody fails to notice: Lack of Transparency. With the largest part of the economy dominated by SOEs or following direct orders from the party, it is not unreasonable to think that there might be a bigger soup on the fire than we are led to believe.

I don’t want to cause alarm or instigate hoarding behaviours like that of our old professor, but this is not looking good. If there’s one single best way of making a Crisis more deadly, that is withholding information and letting it burst only when it is too late.

The two pillars of China’s growth in the 2000s were SOEs and FDIs. The FDI leg is seriously failing now, and the effects will be felt progressively. Even with all the financial might of the Chinese State, it is hard to imagine the SOEs taking the place left by the FDIs, let alone going out to take over the World. I cannot see the Chinese companies leading the effort, I can’t see their necessary creativity and initiative to open new markets to replace the lost export ones. All I can see is a bunch of Giant SOE’s which are better at leveraging their massive size and influence than at impressing us with their products.

There is something quite anomalous in this perceived calm of today, and this blogger thinks that he can smell a Rat. But the time is not for Rats anymore, it is for Ox.

Which is one 2 bits short of a Bull.