Wednesday, February 28, 2007

Chinese Stocks Bounce Back

After the bank run in Shanghai and Shenzhen yesterday, where the stock markets were both down 9%, the up bounce happened today. The markets in China were back up 4% today. Check out the article on it.

The first thing that I thought when i heard about the "black Tuesday" in China was perfect, now i can get in on the dip. As I posted previously, all the people I know in China know it is going to be a great year for stocks. Everyone is going to buy in and make money. This might be a bubble, but it's not going to burst anytime soon. People just saw other people selling and decided to sell themselves. Although it seems that the central bank is going to institute more profit taxes as well as other measures to slow down the Chinese markets, it will not deter the investors. Here's how CNN Money saw it:

Analysts noted factors which boosted the index 130 percent last year and a further 14 percent to this year's peak - such as strong corporate earnings growth and billions of dollars waiting to be invested by newly created mutual funds - remained.

Many Chinese shares are valued at over twice the prices they might command in foreign markets, so fears that a "bubble" could be bursting have accompanied every big fall this year.

But analysts and fund managers argue that the vast demand for equities in China, as well as its isolation from international markets due to capital controls, mean the market as a whole is not prohibitively expensive.

"The mainland's ample liquidity remains fundamentally happy at these [high] A-share valuations and prospects for China growth," said Green.

Although foreign investors continued switching out of richly valued financial stocks this week, there was no sign in the stock or currency markets on Wednesday that they were pulling large amounts of money out of China.

In the big city brokerage trading rooms, where hundreds of thousands of individual Chinese have poured money into stocks over the past nine months, the mood was calm.

I commented on my own post last night in response to my friend wang's post.
However, i don't think today's 400 point drop in the dow was the direct result of any selling of treasury bills by china or a quick de-evaluation of the Chinese yuan (like what happen in Thailand in 1997). It was based on speculation created from fear and uncertainty. That is the only reason why awesome companies with great fundamentals and great earnings fell with everything else today.
Again, there was, and is nothing fundamentally wrong with the Chinese market. It's just a one day scare. The primary victim in this scare: the West.

People in the West have no idea what is going on in China. They are unsure, intimidated and even scared of China. That is main reason why the Dow fell so much yesterday. It will be interesting how the western markets mature in their view of the Chinese market after this jolt. Let's also hope China stops messing with the West's head and emotions.

There goes the Stock Market

The Dow just closed down more than 400 points today. This is the single biggest drop in points since the first day of trading after 9/11. This is the single biggest drop in percentage since the invasion of Iraq in 2003. What triggered it?


hahahaha. The Shenzhen and Shanghai stock exchanges were down more than 8%. This was the largest drop since the 1997 Asian Financial Crisis. A lot of the stocks fell the daily maximum of 10%. This is crazy. The best performers like the big banks (Bank of China, ICBC, China Merchant's), the Airlines (Air China, China Southern), construction companies, communications companies (China Mobile, China Unicom) were all down huge.

What does that mean?
  • The Chinese stock market and economy has a major influence and effect on the global marketplace.
  • This shows the uncertainty of the Chinese market
  • The year of the boar with double luck and double prosperity ive been hearing about has an interesting start
  • The west is really afraid of China. Everyone I know in China knows that this year will be a great year for stocks. With a sudden jolt in the china markets, the US dialed it back and killed their market. While I was watching CNBC channel during it, many people were talking about how this day was unseen in their 20 years of working as a trader.
The interlinks in the global economy due from globalization has created an atmosphere where anything effects everything. Let's just hope a global recession isn't in store tomorrow.

Tuesday, February 27, 2007

NYC Taxi Cops

This Saturday night, I was in New York City, in a car on the east village. I only have a couple of friends with cars in the city and the reasons are very clear why that is. The traffic is decently slow, the streets are small and the parking is non-existent (it definitely feels like Shenzhen). We were trying to go to a friend’s place, but we couldn't find a place to park. Instead of just parking anywhere and not worry about the non-existent tickets that would result, if I were in Shenzhen, we drove up and down street after street, only to find fire hydrants open.

After 10 minutes of looking, we were disgruntled but not defeated. We decided to go a little bit further away to try our luck. While stopped at a right light, attempting to turn right (there’s no turn on red in all of NYC), a yellow cab suddenly came out of nowhere and ran the red light. While it passed the intersection, however, it turned on what seemed like custom-made lights inside that flashed red and blue. My friend and I both thought that it was a taxi that was pretending to be a police officer so that it could get away with violating traffic laws (a very smart idea if it was). Instead, it was just the opposite, it was a police officer, undercover, pretending to be a taxi cab.

The third person in our car explained to us that there have been a growing number of these “undercover” police cabs in the city. They are there not to protect against terrorists or anything of that sort. They are there to catch possible traffic law offenders while blending into the background. They have the ability to issue tickets for parking, speeding, running lights, ect.

This is amazing. Let’s analyze:

  • It is the perfect way to see what is actually going on by blending into the background. People act differently when there are people of authority around. This reminds me of my perspective and situation in Shenzhen (and the title of this blog). Haha.
  • How did this not happen earlier? Air Marshals are on airplanes. Undercover police are on subways pretending to be beggars. It’s about time the police disguised themselves on the street.
  • I’ve described this experience with a bunch of different people. In my limited sampling, it seems that NO ONE knows this is actually happening. I guess it’s a new thing.
  • Talk about irony. When people refer to China, they always talk about how it is an authoritarian police state. However, if your actually in China, you never see police anywhere. Compare that now to the United States. This beacon of freedom and democracy has police hiding in taxi cabs. Wow.
  • China should learn from this. There should definitely be more police on the street in China. Maybe then, the amount of traffic violations and traffic jams caused would decrease.

While talking to my friends who live in NYC, there is a consistent feeling of more and more of their rights slowly disappearing. Is this in the name of safety and terrorism? I don't know. I do know that it feels pretty free in China and taxis run red lights at night without other taxis chasing it down.

Saturday, February 24, 2007

Money Money Money

Before getting to the views of the US of A, I wanted to first discuss the beauty of Hong Kong.

Before I left for the US on Feb. 23rd, I was fortunate enough to spend a day-trip with my grandparents in Hong Kong. My grandfather is almost 80 years old and going strong (he plays tennis 3x a week). My grandmother is approaching 76 and destroys me at pingpong every time. I wanted them to get a glimpse of Hong Kong before it was all done and over with. It had been many years since they had been to the US to visit my family and a little western life would be new and cool.

I had originally planned to take them around by myself on a two-day excursion, preparing everything and staying overnight at my company apartment. However, realizing that that would completely stress and overwhelm me with planning during my vacation, I decided against it. Instead I spent money for the 3 of us to do a day trip through an agency. 250 RMB a person for 2 meals, tour guide, a Victoria harbor boat ride, and most importantly, no planning to worry about. Good deal.

Since I had traveled in Hong Kong a few times (and I work there sometimes) I was prepared for a pretty boring day of sightseeing. However, I was pleasantly surprised by experience and most especially, the tour guide.

Our tour guide was a Hong Kong guy in his mid-30s. He was very social and engaging in his monologue on the bus. With his crude humor, knowledgeable factoids and decent 普通话 (putonghua), he entertained everyone on the bus, especially my grandparents.

Here are some of the highlights of the his tour:

  • A description of Hong Konger’s love and admiration of 邓小平 (dengxiaoping) and the economic reforms he introduced. It was his visionary look on the future that helped make the new Hong Kong happen.
  • A simple, yet interesting description of the difference between HK’s Capitalist society versus China’s Socialist society.
  • Interesting stories about Jackie Chan, and bus rides past his house and office. Hot.
  • An accurate and informing history of Hong Kong and the various waves of immigration with respect to Chinese influence (ie. Cultural Revolution = Rich people coming to Hong Kong)
  • Honest care and advice for his tour.
  • Money, Money, Money.

In the presentation, I noticed that the tour guide always talked about money. With this, I had to count how many times the he referred to money. It could have been how much something was, making money, how to make money, how much a house was, how much the value of the house has grown, ect. (I usually count the amount of “umms” or “likes” people say while they’re talking if they do it a lot. Just one of those things).

It turned out that he referred to money more than 120 times during the trip.


From how much Jackie Chan bought Bruce Lee’s house for to how much the going rate for a box for your cremated remains, from the taxes on alcohol and cigarettes to how much money he lost during the Asian Financial Crisis in 1998, he didnt leave anything out.

This vast and consuming discussion about money brought me back to the different conversations I had with my cousin TT during Chinese New Year’s Eve. That night she discussed how much she disliked Shenzhen and its lack of culture. The city was based around finance and didn't have any semblance of culture. Money and how to make it was what everyone talked about.

When I started thinking about it, I realized that this was dead on. I rarely talked about anything with my friend Simon other than which stocks are good, what business models would be successful in China, how to make money, ect. That’s what Shenzhen revolved around (and I guess, that’s what it was built for).

My cousin Ding, who works for the Shenzhen municipal cultural department agreed as well. It seemed that people were brought up differently here. Here’s what he described:

In the north, kids are brought up with the importance of education (me included). The goal that the kid are pushed to strive for is good grades and going to a good college. True merchants were looked down upon and an entrepreneurial mind was discouraged.

In the south, however, school is very seldom stressed. Instead, the goal that the kids know is financial based. Through experience and hard work, maybe you can do something to make a lot of money. Simon, who has lived in Shenzhen all his life, described the various business ventures he did when he was a kid. He and his friends formed at least 2 different small businesses each year based on the timing starting when he was 9. They would go into selling flowers, shoes, book bags, basically anything to make a profit. This is how they grew up. They believed that “learning by doing” was the way to go. If they ended up losing money in the venture, they would just look at that loss as the price of their education.

In my experience, his Ding's statements were dead on. A friend of mine made almost 1 million RMB in a year by doing the arbitrage game with shoes from Shenzhen to the north. He was only 19. Instead of his parents supporting him in his successful business venture, they were disappointed that he didn't go to college and tried to do anything and everything to get him to go. Currently he's at a random university in Australia, fulfilling his parent's wishes. Typical northern family.

This recent understanding of the importance of money in the regional culture of Shenzhen, Hong Kong and Guangdong province in general, has made me feel many different things. I had seen glimpses before but had never quantified it entirely. Now, after this realization, here are my thoughts:

  • I have had off and on feelings of something missing from life in Shenzhen and I think this is it. It’s difficult to talk to people about anything other than money. After 6 months of this, a person thats previously had not focused on money (me) can go crazy.
  • At the same time, this is good for me. I grew up in a strict-academically based home (my mom is a professor and her parents were also professors) and I need to add the entrepreneurial spirit that’s so strong in this area. Learning through experience is definitely apparent.
  • I often try and think/develop business ideas. Moreover, I have a few possibly successful ideas that I’m working on.
  • Where did this focus on money come from? Was it the influence on Guangdong province from Hong Kong or was it formed a long time ago?
  • This is why Guangdong province is so incredibly successful in the world stage. This is not only where Chinese people who want to make money (whether it’s migrant labor trying to get ahead, HK businessmen with capital, ect.), but it is where the world is coming as well. Of course it’s location and proximity to HK has something to do with it as well.
  • I wonder if the culture is similar in the Shanghai region as well. Can anyone who know about Shanghai add their 2 cents?
  • This entrueural spirit feels like pure excitement. There are so many oportunities in China for anyone with a good idea. It is the ability as a person to take advantage of these opportunties. This is a big difference from the seemingly repetitive life of the US and even NYC.

In terms of my experiences, I am most definitely excited about being able to be apart of this. I feel incredibly fortunate. Simultaneously, however, I wonder how my views, observations and insights about Chinese culture is skewed by living in this area where there is only 1 focus. For example, how can I talk about the Chinese worker where the Chinese worker here might be completely money oriented where people in northern China might be totally different in their focus? You just never know.

As much as this lifestyle is different from what I'm used to, its absolutely pure and enjoyable. Who knows what come of my living here... but ultimately, I guess its most immediate effect is that it’s going to make writing this blog that much more interesting and challenging.

Friday, February 23, 2007

Business Trip

I'm on my 3rd business trip to the company office at Norwood, MA for company strategy meetings all next week. It's gonna be interesting.

Since i'm in the US, i'm gonna switch it up a little bit and try to observe the US through the eyes of a Chinese.

Let's see how it goes

Wednesday, February 21, 2007

Shenzhen, USA?

I am fortunate that I have a lot of family in Shenzhen who can take care of me when I need family love. I haven't needed to ask my 2nd aunts and uncles for anything major, but it feels good to play some tennis, or have a nice lunch with them a few times a month.

Every time I have food with my relatives and their friends, we always go through the same routine. My aunt usually announces the same things to the group:

  • I am an American. Yes. A real American.
  • I've lived there since I was very young.
  • Although it might seem that my speaking ability is good, I cant read or write at all.
  • I'm here as a "intern" at a enterprise based in Hong Kong.
  • I graduated from Columbia University.

I then take over attempting to explain that:

  • I am NOT an "intern" but a manager in charge of product development department with a lot of responsibilities and in charge of 4 employees
  • Although it seems I cant write characters that well, I can type them decently. I have also never had the opportunity to learn the characters and i'm still picking things up everyday. I can read about 50% of the stuff on TV or in the papers.
  • Yes. I am American.

The subject usually turn away from me until further along in the meal where I'm always asked the same 2 questions.

  1. What food is better, Chinese or Western?
  2. Have you become accustomed to living in China?

The answer to the first question is obvious. They're both good and bad. Sometimes I'm in the mood for chicken parm, turkey with mashed potatoes, or a burger and onion rings. Other times I'm in the mood for Chinese bbq, Chinese home style food or dumplings. I even enjoy sushi, tacos and Korean bbq also! And no, steak is not the main food of choice in the US.

My answer to question 2 is more interesting. I've realized that in reality, my life in Shenzhen, China now compared to what it would be in NYC, USA is basically the same. Everyone seems to be amazed at this answer, but to me it’s very apparent. You would go to work during the week and go to the bars during the weekend. That’s life in the US and life in China (from what I’ve experienced).

During this Spring Festival vacation, the similarities are even more resounding. With the mass exodus of migrant labor from the city (I’m assuming at least 4-7 million people left), Shenzhen almost feels like Columbus, Ohio. The traffic flow of the freeways has changed from constant traffic jam and congestion to now feeling like a Sunday afternoon on Route 315 traveling south from Worthington towards Ohio State University. The 东门 shopping area feels like Christmas rush season at the City Center mall (even the sales and the discounts are very similar). The vacation TV-watching and relaxation feels like the boredom of spring break when I was in high school.

Globalization is most definitely taking its effect. It has created a modern life style that is pretty much similar no matter where you go. I have been lucky enough to see it, feel it and experience it in person, not only through my work (by traveling and participating in Chinese manufacturing exporting into the USA) but also my daily life and experiences.

Now if I just found a place in Shenzhen that made a good Chicken Parm…

Tuesday, February 20, 2007

20 Years of Development and Creating the Future

I am a Skype lover. It’s the greatest invention ever. Not only is it incredibly convenient, but also cheap. The webcam video quality is also awesome. Recently, ive been using Skype to catch up with a few friends back in the States. Of course the conversation always revolves around what the hell I’m doing in China, are there police everywhere infringing on people’s rights, ect. ect. Even though people are well educated, they are still ignorant of a lot of things.

Every time I talk about China to friends who don’t necessarily understand China, I often attempt to describe China in the past 20 years and its relative relationship with western growth. People always talk about the problems in China, including: the chaos on the roads, the lack of rule and law enforcement, guanxi in business practices where knowing people is of the utmost importance, and the constant stare down white people get when they walk by Chinese people in cities other than Shanghai. People, however, never really try to look and find the root of these problems.... the reasons why they exist. When I talk to these friends, I always refer them to childhood stories of my living in China (i was born there and lived there until I was 6) and the vast differences between then and now (about 20 years worth of time).

[First, let me quantify my experiences. I was born into a decently wealthy family. My grandfather on my mom's side was a dean of a university (a big deal back then... and i guess, still a big deal.... but definitely a bigger deal back then). My mom was already a professor at the provincial university, getting income both as a professor and a translator (a big deal too) while my dad was in the army doing random stuff, and making a good salary relative to the times. We were wealthy enough to have an abundance of food and goods that others didn’t, as well as the ability to find nannies for me for all the time I lived in China. We definitely lived a privileged life and were able to use and buy all the new technologies coming onto the market.]

When I was born, the first photos that I still have now were taken in black in white (not for artistic reasons, btw) with circular and sharp edges. Only when I was about 3 years old did I have a color photograph (1985). Also, during that same time, consumer goods were first hitting the scene. My grandparents had a refrigerator and a double washer (one side for the washing, one side for the tumbling to get the water out). When I was 4-5, my family was well off enough to be the first families to get a color tv and a one system washer. Back then, there were very few cars on the road. There were buses, but barely any cars (especially ones for private use). You only rode in cars if your dad's company let u ride in it. I never had chances to ride in cars. When I did, I would get motion sickness (like my mom), and complain that I had a fever (youbingle). Other signs of the times includes my mom's grandmother had bound feet and was tiny. My grandmother's older sister even had bound feet. There was only 1 department store for the entire Harbin city (population 3 million). Finally, the first introduction of "pop" or "soda" in orange flavor was there. For the price of a good meal, you could get a taste of the orange soda (kinda like HiC Orange, called jianlibao).

After I left China after my 6th birthday, I had a few chances to come back to china. Only recently (soph year of college on), have I come back to china consistently every summer. Every time back, there are profound changes to the geography where once familiar. Everyone says that when they come back after being away for a while, that they cant even recognized their own neighborhood where they grew up. This btw, is true. I've hung out in and around my grandparent's house everytime I get back. one year there was suddenly huge bridge for a ring road built right next to her neighborhood. Also, the huge market (for things from electronics to meat) was destroyed and a huge mall and supermarket was put in its place (with McD's and KFC), all in a span of a year.

Within the past 16 years, China has come from a place where color TVs and soda was really rare to being one of the fastest growing economies in the world, consistently for the last decade. China is the world's 2nd largest consumer of oil (to the US) where in 1992, it was self-sufficient in oil. China has huge multinational companies who produce consumer goods for the world, huge markets to tap and great opportunities. Everyone seems to have a mobile phone. Everyone goes on the internet, IM each other on QQ and play World of Warcraft. Stores like Wal-Mart, Carrfore and such are everywhere. There are Mercedes, Lexus and Buicks on the roads. McDonalds, Pizza Hut and other restaurants are everywhere. Old buildings are torn down with huge apartment complexes taking the place. It’s crazy. Things are almost nothing like what they were just a few years ago.

What's most amazing is that all this transformation has taken place within such a short period of time. To note: it took the US almost 50-100 years to change what china has done in the past 17 years. [I estimate the introduction in the US: first color TV (1950s), Kitchen appliances (1930s), Cars (1900s), Photos (1920s)].

What does this mean?

China has had to quickly adjust to the changing world that is going by way too fast. That, combined with the previous economic system (socialism, state runned economy) and the way of life (ie, the need to save money), has aided in these things that are wrong. For example, in the US, there is no doubt in anyone's mind that no person would ever traverse an interstate highway and walk across it. No one will ride their bike on the side of the highway or carry their harvest on a horse pulled carriage there. This, however, is commonplace on China's interstates and highways. Because of this, it is important for Chinese to be aware of each other on the road (how many bad accidents have u seen in China) where there are people streaming in and out of traffic, not to mention bikes every where. If I was cut off in the US, I would be scared, annoyed and angry. In china, its common place and just part of life and what people have just come to accept.
Guanxi is soo important in Chinese society because it used to be an economy where the competition for labor didn’t exist. (i learned this in my international politics class). Since there is was not a lot of people providing services back when I lived in China, you could only get things done if you knew someone who knew someone. That means a system of favors was set up so that people would help each other out to both parties' benefit. This seems foreign to us in the US since we could just look in the yellow pages, call a store and pay whatever price they offered. In china, 15 years ago, it didn’t matter how much money you had, the person wouldn’t even talk to you if u didnt go through guanxi to get to him. Things are getting better now in china though. You can get things done with only money (ie. white people's ability to survive), but it still helps a lot if you go through connections. (lets not forget, in the US there's something called "networking").

Why do people in Beijing stare at Americans where they're at the great wall? A lot of people in Beijing are tourists from other places in china. They probably have never seen anyone but Chinese and think white people are just part of the show: Tiananmen square, Mao's mausoleum and that redhead. No matter what people say, Chinese people do not have a lot of interaction with foreigners (laowai). They are very curious and it is definitely not rude to stare. After growing up in a country where everyone immigrated there... and going to school in NYC really alters things. It's commonplace to meet people from everywhere, ever race and background u can imagine. No body stares because no one cares. However, if you go to the middle of nowhere (ie. Iowa, where I've lived before), go into a diner........ lets see how much people stare at u (imagine my mom and I walking into a salon in a western movie and everything stops. yea. that happened).

What is ultimately seems like is that China is evolving too quickly into the global world and it can’t properly adjust to the demands of modern life. There are many things that seem commonplace for the established western world, but will only change with time in China.

So mike, what the hell are u saying? Why did u write all of this?

Well, everything above this was actually background of what I observed in the past few days. It tries to set up what I thought was cool/interesting.

There seems to be a constant problem in modern families today, no matter American, European or Chinese. Instead of talking to one another, people watch TV during dinner. However, one real relief of this situation is that families go out to a restaurant (ie. once a week) and have a nice interaction there to make up for their deficiencies at home. (Are u still with me). Of course there's the preverbal chuck and cheese where the kids go play or the sports bar where there's a reason your there (to watch a football game while eating wings [o lion's head, how I love thee]) but most dining out means people talking and interacting with other people they're with.

Now. With all of its glory and evolution, China has created a system where interaction while eating out was a thing of the past. Now, at decently nice restaurants in southern china (i haven’t seen it in the north yet), the dining floor is surrounded with flat screen TVs playing different shows, movies. For the different restaurants I went to, the nicest and the biggest ones and atleast 20 monitors situated around the dinner area. This is amazing. Instead of eating, making small talk, and interacting with who you’re with, people can just eat and stare at the TV. It feels like home all over again. haha. When I saw a couple, supposedly out on a date, just sitting there watching TV instead of talking, I thought it was really amazing. It is not like Chinese people talk that much anyways when they're eating. Children are taught that talking while eating is impolite. Now having TVs is just another way to aid the silence of dinner.

Not only has China evolved so fast that it can’t "correctly" catch up to what they're supposed to be doing, ie. the people jaywalking across highways, but it has entered a stage where it slowly leaps over and sets the future. (We're too ignorant of how things are supposed to be done that we completely “screw” everything up and change the whole paradigm). I don’t know if this new TV thing at restaurants will catch on... but it seems interesting none the less... It will give Chinese people another reason not to talk to each other. Maybe the west will follow suit and watch TV at nice restaurants now.

It’s just another step in the past 20 years of development.

Monday, February 19, 2007

Senate Democrats take aim at China

In my January 19th post on the Weaponizing of Space, I wrote briefly about what democrats would do with regard to China and the weaponizing of space. From my knowledge, no resolutions were passed denouncing the action by congress. However, that doesn't mean China is off of their radar. Here’s what I wrote on 1/19/07.

The democrats are pissed! I worked for Sherrod Brown in the 2004 election campaign in northeast Ohio to support John Kerry. Even though I know him personally and can say with all certainty that he is a great, honorable and capable American, the freshman Senator from Ohio is going to have a field day with this with support of the protectionist, pro-labor side of the Democratic Party. The democrats need to look strong to their constituents on national defense and this is the perfect forum for that. I wonder what bills or resolutions will be passed on this issue.

Only 3 days ago, I read an interesting Opinion piece from discussing possible legislation that will be introduced into the Senate by Sherrod Brown and fellow democrats that will change the status quo. The protectionists are definitely out in force.

Here is an excerpt of the article:

Also this week, Democratic Sens. Byron Dorgan of North Dakota and Sherrod Brown of Ohio, along with Republican Lindsey Graham of South Carolina, said they were introducing legislation that would strip China of its permanent normal trade status with the United States, subjecting the trade relationship to an annual review by Congress. Brown said in a statement:

U.S. trade policy has failed workers and small businesses across our country. As far as I am concerned, there is nothing normal about allowing our trading partners to use slave labor to compete with our workers. There is nothing normal about manipulating currency to make exports cheaper. There is nothing normal about mouthing concern for intellectual property in the midst of rampant piracy. And if this is indeed normal, then I certainly don't want it to be permanent.

Who knows what will come of this. The last time something like this happened was in 2005 when NY Senator Chuck Schumer tried to introduce a 27.5% tariff on all Chinese imports. That was pushed aside due to talks between Sen. Schumer, and the current Treasury Secretary, Henry Paulson. Hopefully someone will have the same influence this time.

In a Chinese perspective, it seems that these senators are kind of ignorant. They are looking past the other obvious problems with the US economy that includes spending billions and billions on the war in Iraq while simultaneously giving the richest in the US a tax break, deficit spending, and de-taxing and de-regulation of corporations which have been profiting handsomely from these policies. Instead, they point to one thing. The increasing trade deficit with China and the need for a quicker appreciation of the yuan. Here’s what the article predicted (as a lot of economists says) what would happen if China followed through.

In the 1980s, just as with China today, many in the United States were pushing Japan to strengthen its currency. How did that work out for Japan? As Will Hutton, China expert and author of the book The Writing on the Wall: Why We Must Embrace China as a Partner or Face It as an Enemy, told me in an interview late last year:

The more than 50 percent rise in the yen in the late 1980s was the single most important cause of Japan's near 15 years of economic stagnation that followed; if the yuan went up by 40 percent suddenly against the dollar, it would have a similarly devastating impact on China. . . . Such a rapid appreciation of the yuan over a short period could be a tipping point for a wave of unrest, which could threaten the regime's stability. The party leadership sees the demand for fast yuan appreciation as an act of economic warfare. In these terms, you can see why.

And would troubles in China affect America? Here is the scenario that Hutton sees:

China's stagnation would trigger a global slowdown, maybe even recession. ... The World Bank estimates that if China's growth rate fell by just 2 percent, up to 60 percent of China's bank loans would become nonperforming–so threatening both China's and, via Hong Kong, Asia's financial system. The flow of saving to finance the U.S.'s deficit would dry up, probably forcing U.S. interest rates up–so worsening the economic slowdown.

A scary scenario, no doubt–and one both Democrats and Republicans should do their best to avoid.

I would agree.

Sunday, February 18, 2007

Guide to Chinese New Year

Happy Chinese New Year everybody! 新年快乐!

For the first time in a long time, I’ve been given the chance to experience Chinese New Year (cny) while being in China. The last time was when I was 5 years old. Even though, I have never really celebrated cny within in my own family, cny is such a big part of Chinese tradition that I needed to experience it first hand (rather than hanging out drinking in nyc).

In Western terms, CNY could be described as an elaborate combination of Thanksgiving, Christmas and Forth of July all in one. For a brief background, Danwei (an awesome blog) has good description here:

Lets examine the various CNY customs and traditions one by one, with side notes about how people do things in other regions of China.

1. The New Year's Eve dinner.
My extended family had our family dinner last night at a cozy Northeastern restaurant. A total of 23 people were on hand, spanning 4 different generations. I have a lot of extended family in Shenzhen, full of 2nd aunts, uncles and 2nd cousins. It was quite a sight. It was the first time i'd seen many of my family members. We had 2 big tables, set up in our private room with the seating arranged by generation. The elders (my mom's parents) were at the head of the main table. They are seated at the "head" of the round table (usually reserved for the most "respected"). Around them was the generation of my mom. That's where all of my aunts and uncles were. The next generation down (me and my cousins) had our own "kid" table.

For the dinner itself, the food was good and so was the 2 bottles of MaoTai rice wine (aged 50 years). However, most families spend a lot more time eating and drinking than mine. It's tradition for everyone at the dinner to be fairly sloshed and tipsy before leaving. The thing is, my extended family seem to all have 2 things, diabetes and the inability to drink that much alcohol. Needless to day, the dinner only lasted about 1 hour and a half.

For the post-dinner activities, I expected there to be a nice family party of sorts and maybe even Cranium... (something you would expect from a western family). I was surprised to find that after the dinner, everyone returned home to watch the 春节晚会 (chunjiewanhui). There was no festive party. There was just sitting on the couch. At home. Watching tv.

How other Chinese do it:
The most "traditional" part of the New Year's Eve dinner in the north is dumplings. Families very seldom go out to eat for this meal. They usually get together at one member of the family's house and make dumplings by hand. It is very much a bonding experience to make the little things. Making dumplings and majong are definitely the most popular or Chinese activities during CNY.

It is also customary to eat dumplings at the stroke of midnight.

2. 红包

Part of CNY tradition is the giving of the 红包 (hongbao), or red bag. These little red envelopes are filled with cash and are given as a present to people. Last night during our family dinner, there was very little红包 giving. A couple of my 30 year old cousins gave them to their parents. Also, the “head” of our family (the aunt with the most money) gave 2 away to the children without jobs yet (my “2nd” niece who is 2 years old, and my 2nd cousin who is still in college).

There are different sayings of the 红包. In the north, you are usually obliged to give 红包’s away if you are working. If you are not, you don't need to. The people who have a job usually give them to members of their family, who are younger, don't have jobs or people who serve them (like the building doorman, postman, ect). There is usually no exchange of 红包s where person A gives one to person B and person B then gives one to person A (since that would just not make that much sense to trade money back and forth).

Some people, who are already grown up and have jobs often give红包s to their parents. This is less of a tradition but more of a way to show your appreciation for parents.

In Shenzhen, or Guandong province, the test is with marriage. If you are married, then you have to give the 红包 out. If you are not married, you don't have to bother. The money inside are to be new, crisp bills (there are huge lines at banks to get wads of cash in every denomination). The amount of money is based on the person. If you have tons of money, you had better give at least a few hundred. If your poor, 5 or 10 yuan might do it. It really depends.

I still don't know when the 红包s are given. We’ll see if I have to make any edits to these rules in the next few days, but for now, I still haven’t received any红包yet.

3. The 春节晚会

The 春节晚会 is a 4.5 hour showcase extravaganza, held by the Chinese Government annually. It starts at 8pm and lasts all the way until 12:30am. It has become a tradition within itself. There are 3 teams of hosts (who change wardrobe atleast 4x each), tons of different performances by ethnic groups, small comedic skits called 小品, not to mention classical favorite songs that are sung over and over every single year. I even recognized a song that was performed last night that I knew when I was in preschool! That's like 20 years ago.

My experience with the 春节晚会 is limited to my parents. My parents would always get tapes of the 春节晚会 a few days afterwards the event from random friends. While I never saw them watch it, it seemed like everyone did watch it at some point. What was also apparent was that people love . These skits are decently well and its actors utilize the humor of north eastern regional accents and vocabulary (where my family is from).

Instead of heading to a bar for massive amounts of drinking (like your typical NYC new years eve celebration), I spent last night with a few of my cousins drinking Jack Daniels, playing cards and watching the春节晚会. They really did seem to enjoy it and said it is definitely a tradition for CNY. Even though the performances have been “sucking” recently, they still enjoyed staying in that night and watching nonetheless.

How Other Chinese do it.

The春节晚会 seem to be very much a northern China thing. Although I’m sure that people in Guangdong province do watch it, they have their own tradition down here. After dinner with the family, many people go out to the “flower street” to hang out. These streets feel like a street fair. There are a lot of vendors for different flower arrangements, red CNY decorations as well as toys for kids, food and other random stuff. These streets, that pop up all over the city before CNY are usually PACKED for the hours before midnight on new years eve.

In various southern regions of china, a lot of people believe in Chinese vernacular religions. It is a tradition to go to the monasteries to pray at the strike of midnight. My cousin, Simon, was stuck in traffic for 5 hours when he went last night. It is his yearly tradition to pray immediately after midnight, and then hit the bars. Some people travel to far away temples that are considered “a higher level” to pray after midnight for good fortune and luck in the new year.

4. Fireworks

Fireworks was originally invented in China and it is a huge part of the CNY celebrations. In Chinese folklore, the new year was personified as a ghost-like bad spirit. Fireworks are set off to scare him off and any bad luck for the upcoming year. As my cousin said last night: “I don't feel like it’s the new year until I hear fireworks.”

This year, many cities eased their decade-old ban on fireworks. In Shenzhen, however, there is still a ban on it. However, Chinese revelers still ignore the rules and set off their own fireworks. I currently hear bangs and crackles in the distance as I write this. The use of fireworks, however, can cause a lot of injuries. Here’s a CNN article about CNY injuries in Beijing:

In rural areas, fireworks are a huge part of the celebration.