Divorced from Reality

January 17, 2016

I spent a large chunk of the last week sitting in meetings with our Chinese partner talking about expansion throughout China over the next several years and one thing I was struck by was how all of the conversations were completely divorced from the macroeconomic reality in China.  There was no mention of China’s economic troubles, whether it be the falling stock market, an oversupply of housing, falling economic growth, overcapacity in the manufacturing sector, or any number of statistics that point to a rapid deceleration of the the Chinese economy.  The only thing that came up was the devaluing the the Chinese renminbi and its mention was prompted by the Americans in the room.  Equally absent was any discussion of the current political situation in China, though that is slightly less surprising.  However, on the whole if we were sitting in a roomful of American or European business executives, the economic climate would have certainly been a part of the discussion and even maybe one or two political quips, including some comment about how unfathomable Donald Trump’s candidacy is and the sad state of American politics.  But there was none of that in these meetings.

It’s often something I wonder about when I see people wandering the mall or around me at a restaurant – what do they think about what’s happening in their country?  Do they even know what is happening in their country?  It’s very likely they may not be fully aware of what is going on since they would need a VPN to read foreign news sources and the Chinese media is largely silent as to the country’s economic doldrums.  Plus most people are too busy watching tv shows and movies on their phones to pay attention to the news, whether it’s CCTV or one of the many government publications sitting untouched in the newsstands around the city.  My meetings last week confirmed for me that there is a disconnect between what the reality of what is happening in China and how people are engaging with that reality.

Much has been written about the housing glut in China and no matter what city I travel to, I’m usually greeted with too many cranes to count as I drive into town from the airport. So many cities seem to be all about building new central business districts replete with malls, office buildings, and more apartments.  And yet the question is the same – who is going to move here?  If the government is seeking to continue its drive to urbanize and move the rural population into the cities, I cannot imagine that they are going to be re-settled in these luxury housing developments that continue to rise all over the country.  The malls are a whole other phenomenon.  How many luxury malls does a country need? Apparently there is no limit, but when I was in Chengdu I walked through a few of these new malls and some were eerily empty, both of people and stores.  Apparently the SCMP and I went to some of the same malls.  In Shenzhen the malls seem to be more for strolling than shopping with most people just wandering the mall, taking pictures, eating and drinking, but not really holding shopping bags.

I think at this point there is no disagreement that the Chinese economy is slowing down. The problem is that nobody quite knows how much.  The official statistics are less telling. It’s more about reading between the lines or anecdotal evidence of such a slowdown. It will be interesting to see what number the government announces on Tuesday for 2015 GDP growth.  There is so much gray when it comes to this country and not only on the economic front.

Over two weeks ago, Lee Bo, a publisher of books critical of the Party disappeared in Hong Kong. He was the fifth person to disappear in connection with this particular publisher.  He was last seen at his warehouse in Hong Kong before New Year’s and since then there have been a series of odd occurrences including phone calls to his wife from a Shenzhen number where he is speaking Mandarin rather than the Cantonese he uses at home and a letter to his wife that he is going to be away for awhile taking care something on the mainland.  The Hong Kong government has asked Beijing where he is and over two weeks later they still have not received an answer.  The issue at stake is that because of the whole “one country, two systems” between HK and China, Chinese law enforcement officials are not supposed to be coming into HK and taking away HK residents.  They are supposed to go through proper legal channels if they have reason to want to interrogate someone.  Coming in and secretly ferreting a HK resident across the border is a serious violation of the principle behind “one country, two systems”. It’s more than problematic that Beijing has not given the HK government an answer as to  Lee Bo’s whereabouts and shows a serious lack of regard for HK and its autonomy.

So I digress.  The point of all of this writing was that I still wonder if Chinese people actually know what’s going on with their own country or simply do not care.  I don’t know if I will ever be able to get a straight answer.

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Eating and Beaching

November 29, 2015

I’ve just returned to my room in Shenzhen after an action-packed weekend excursion courtesy of our Chinese partners.  The weekend began with a 9:10am meeting at school to board buses for what’s known as the Yantian Seafood Street (盐田区盐田海鲜食街) on the other side of Shenzhen. Just to give you a sense of how big Shenzhen is, the city is 50.6 miles across at its widest point.  Shekou, where our school is located, is on one side of the city and Yantian is way on the other end.  The “Seafood Street” is kind of what you’d imagine.  It’s a row of restaurants serving fresh seafood.

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Yantian Seafood Street (盐田区盐田海鲜食街)

All the restaurants generally serve the same things, but I guess the quality of the preparation depends on the chef.   We ate pretty well.

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Yantian Seafood Street (盐田区盐田海鲜食街)

It was one of those Chinese feasts where the dishes just kept coming and there was obviously a heavy emphasis on fresh seafood, including fish, snails, crab, crawfish, shrimp, and clams.

After lunch, we re-boarded the bus and were on our way to the Sheraton Beach Resort in Huizhou.  The whole reason for this trip was a big “thank you” to the teachers and staff for all of their hard work getting the school off the ground.  It was appropriately timed to coincide with what would normally be a long Thanksgiving weekend in the States.  I was just fortunate enough to be invited along since I am out here spending time at the school.  Anyway, back to the weekend.  So we pull up to this hotel after passing all of these new condos being built as vacation homes or investments for people in other cities.

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New condos on the way to the resort

The hotel is a Sheraton, but like most things in China, it’s almost, but not quite what you’d expect from a Sheraton.  The construction of the building is a bit shoddier than you’d expect in the U.S., the AC in my room didn’t quite work to the point where they had to bring a fan up, and the bed was just a tad harder than you’d expect in a hotel.  But with that said, the grounds were really nice, including the scented hot tubs that were dubbed “hot springs” with “restorative properties”.  The view from my oceanfront room was also almost, but not quite.

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Yantian Seafood Street (盐田区盐田海鲜食街)

As you can see, the view is pretty stunning, but then there’s a power plant off in the distance.  It’s just part of a Chinese resort.

We had another feast for dinner, including a lucky draw, which is a Chinese raffle where people were able to win iPod nanos, iPad minis, and an iPhone 6s.  Definitely some great prizes, but alas, I did not win.  The night ended with a dip in one of the restorative hot springs, the jasmine scented one to be exact.

This morning we woke up around 7am and made our way to . . . yes, another massive meal, this time the breakfast buffet.  Breakfast is one of my favorite meals and this buffet had both Western and Chinese options, including a congee and omelette station.  Congee is Chinese rice porridge that you can add meat and vegetables to, as well as various spices and sauces. I like it, but it’s a bit too heavy for morning, especially after a day of feasting.  Instead I opted for the omelette station and cereal with yogurt and fresh fruit.

After checking out, we piled back into the bus and went to check out a new development about 20 minutes away that looked like something out of Hawaii, but with a Chinese flair.

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View of the shoreline from the fishing boat

It was very pretty, but I am left wondering who is going to be living here.  It’s one of those planned Chinese communities where eventually the envision 70,000 people living in the area, but it’s about two hours from Shenzhen and an hour from Huizhou, a city of 500,000 people.  People were being bussed in on a continual basis, presumably to check out the renditions of the development and see model apartments.

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Part of the 3-D model of the planned community

I tried asking about who would be living here and the most I could get out of anyone was that many people would be buying these as investments and then renting them out like timeshares.  Apparently this part of the coast is thought of as a weekend destination for a lot of Shenzheners, but then one person from Shenzhen told that this locale was popular two years ago and many people had moved on to a lake about 40 minutes north of the city.  I am not sure what that means, but it still begs the question as to who will be populating this area.  Might I add that the land is owned by a large Shenzhen company, China Resources (or Haurun (华润)), which is also building a training university on the site.  This same person who told me the site was popular two years ago told me that because China Resources is well-connected to the government in Shenzhen, both parties stand to make a lot of money on this site.  However, these apartments are not being built for the common Chinese person, so even though housing prices are less here than in Shenzhen, the people who need relief from those high prices will not partake in this development.  It does not help that the high speed rail stop is a bit of a distance away and there are no other readily identifiable jobs nearby.  However, I digress.  We spent the afternoon here, including a jaunt out on a fishing boat in the bay and then another gut-busting lunch.

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Leaving the dock

Around 1:00pm, we piled back into the bus and made our way back to Shenzhen.  It took nearly 3.5 hours due to inexplicable Sunday afternoon traffic.  You hear about traffic being bad in China, but it’s not until you’re sitting in it on a packed bus that you really understand how bad it is.  It was not just our road, but as we passed other highways and city streets, they also appeared jam-packed.  It makes you think about global warming and how what we’ve done in the States is being acted out on a massive scale in China as Chinese people embrace the car much like we do as Americans, but there are nearly five times the number of Chinese people as there are Americans.  Just sit with that for a second.

So now I am back in Shenzhen and still taking stock of the weekend.  It was my first time along the Chinese coast and parts of it were quite beautiful, but part of that may be because they’re not completely built up, yet, so remain relatively unspoiled by large crowds.  It was also one of those weekends that would be easy to take from New York in the States, like going out to the Hamptons, up to Cape Cod, or down to the Jersey Shore, but in China, it required the planning by locals who know the ins and outs to make it a memorable experience.  While a whirlwind, I was impressed at how we were pretty much on time everywhere and also had a chance to experience a part of China that most Westerners don’t really get to see, even if it was on the more luxurious end of things.  But now it’s back to reality and another workweek.

 

 

Today’s New York Times had an article about Ordos in Inner Mongolia and the local government’s efforts to build a brand new city about 15 miles south of the old city.  Reading the article, I was struck by how similar Ordos’ expansion appears to what is happening in Linyi.  North of the Benghe River, the local government has embarked constructing a new city from scratch.  New luxury towers and villas have sprung up on what was once farmland for as far as the eye can see.  Like in Ordos, the first tenant in this new “city” will be the local government, who is moving its offices from the old city around People’s Square (人民广成) to the new city north of the river.  Residents are presumably the next to follow.  The NYT article does a good job aggregating what I have been saying in my posts about Linyi and its many splendid towers with no one living in them.   While its amazing that a government can harness so many resources to build a new city entirely from scratch, the wonders of today’s state-driven capitalism can easily turn into tomorrow’s follies.  Only time will tell.

View of Linyi's new city north of Benghe