Living in China. I Made It Rain in Shenzhen Today

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It seems like it hasn’t rained more that a light drizzle in Shenzhen for many weeks, maybe several months. The vegetation seems healthy, so I assume it’s not a problem. Most likely there is enough baby piss running off the sidewalks to keep things green.

I come from a family of farmers, and I’ve always heard rain is good, though I’ve always questioned this. Still, I was a bit concerned. Could it be possible that plants actually need rain as my grandfather told me? Maybe, maybe not. He was old. How much could he actually have known?

When I fired up my p.c. this morning the little weather icon said it would be warm with a 30% chance of a thunder shower. Nothing unusual there. There were similar predictions many days over the past several weeks, and it never rained.

But in the unlikely case that my grandfather was right, and plants actually need water to thrive, I decided to make it rain today.

How did I do this? Easy. I purposely went out without an umbrella.

As soon as I hit the street there was a light drizzle. It didn’t last very long, and didn’t even wet the pavement. I continued my umbrella-less walk.

I choose a route that kept me close to overhangs and cafes where I could take shelter in bad weather. The sky got darker. There were occasional lightening flashes.

Suddenly it hit. A full fledged thunder storm. I ducked into a café to read until it passed.

The storm didn’t last very long. It began at 14:40 and ended by 15:10. Still, a lot of water fell from the sky. I feel certain the sidewalks were cleansed of baby piss, the sewers were flushed, and the trees were watered,

So all the farmers and street cleaners of Futian can thank me for this weather event. I am available for banquets, honoraria, and light worship.

 

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Living in China. Marching or Stumbling toward Urbanization?

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NOTE: An edited version of this piece was published in the Shenzhen Daily on April 8.

Newly elected Premier Li Keqiang said on March 14, the biggest development potential for China lies in the process of urbanization. China is a country where about half of its people are still living in rural areas decades after the biggest urbanization wave in history began.

According to the Global Times, the vice premier has had a life long interest is urbanization, and considers its continuation imperative to healthy economic growth.

Li was quoted in People’s Daily saying, “Urbanization is not about simply increasing the number of urban residents or expanding the area of cities., More importantly, it’s about a complete change from rural to urban style in terms of industry structure, employment, living environment and social security.”

What does this mean? Simply put, urbanization is the process of country people moving to cities in attempts to better their lives. What do rural immigrants into the cities hope to find in their new homes? Mainly relatively high paying jobs, but the lure is not just economic. Immigration is also a result of loss or degradation of farmland and pastureland due to development or land grabs, conflicts, the attractions of anonymity, proximity and ease of mass transport, and the opportunity to assert individualism.

Cities offer a larger variety of services that aren’t available in rural areas. Supporting the provision of these services requires workers, resulting in more numerous and varied job opportunities. Elderly individuals may be forced to move to cities where there are doctors and hospitals that can cater for their health needs. Varied and high quality educational opportunities are another factor in urban migration, as well as the opportunity to join, develop, and seek out social communities.

Cities are a cause of, and a response to, world economic growth. Cities, both large and small, are at the heart of the fast changing global economy. Writing in 2012, Li noted that urbanization is a “huge engine” powering China’s growth. Generally, urbanization is viewed as a positive for a society or an economy, but like most everything it is neither all good, nor all bad.

Li noted that China’s urban population of just above 50 percent is “much lower” than the 80 percent average in developed nations. Li’s championing urbanization has been a central theme of his career. As he once said, “Urbanization is not about simply increasing the number of urban residents or expanding the area of cities. More importantly, it’s about a complete change from rural to urban style in terms of industry structure, employment, living environment and social security.”

Asian urbanization has been studied in depth in Thailand. Professor Iam Thongdee of Mahidol University in Bangkok found Thai farmers are seen as poor, stupid, and unhealthy. As young people flee the farms, the values and knowledge of rice farming and the countryside are fading, including the tradition of long kek, helping neighbors plant, harvest, or build a house. He found Thais are losing what they call Thai-ness, the values of being kind, helping each other, having mercy and gratefulness. A similar pattern may be emerging in China.

In addition to the disappearing long kek, Thailand urbanization has also resulted in massive increases in other problems such as obesity, disease, pollution from dirty cooking fuels and primitive stoves, and poor access to clean water and sanitation. In addition urbanized populations are exposed to modern environmental hazards, such as air pollution, exhaust fumes, food poisoning, and industrial pollution.

City life, especially in modern urban slums of the developing world, is hardly immune to pestilence or climatic disturbances such as floods. Yet they continue to attract migrants. Examples of natural disasters include the 2011 Thailand floods and 2007 Jakarta flood. Urban areas are also far more prone to violence, drugs, and other urban social ills.

The cost of living in cities is usually very high when compared to country life. While it is probable that earned income is much higher in a city, the cost of living can eat it up, sometimes leaving the urban immigrant living a poorer lifestyle that before his relocation.

There are other drawbacks to urban living in China. Many find a lack of housing, and an infrastructure that has not kept pace with population growth. Others decry the lack of property and other rights because of the Chinese hukou system. Estimates run as high as 60% of newly urbanized people in south east Asia live in slums without power or running water. They are subject to poverty, crime and disease.

A study recently released showing the quality of urbanization of 246 Chinese cities using a number of social and economic criteria. Shenzhen came in at the top of the list with a score of 77.63%. It was followed by Beijing and Shanghai. The CPC called for the country to “noticeably enhance urbanization quality.”

City populations are growing faster than city infrastructure can adapt. This can be addressed by the government re-allocating resources to adequate infrastructure development, including roads, hospitals, water treatment facilities, and schools. Adequate living spaces and good sanitation must be made affordable to even the most poor.

Social services must be developed and developed to be able to cope with the new and growing problems resulting from urban poverty. Medical attention must be available. Slum dwellers need police protection from the base elements of society. Schools and universities must give equal treatment to the children of immigrants.

The government must enable the immigrants to participate in being members of society. They should not be forced into invisible corners and then overlooked.

The pace of growth in China’s cities is at risk of slowing, according to Nicholas Eberstadt, a demographer China’s workforce may shrink, with the number of 15-24 year-olds forecast by the United Nations to decline by almost 62 million people in the 15 years through 2025. The one child policy must be examined.

All of these things require scarce government resources. Li has a daunting task ahead of him as he attempts to make urbanization a benefit to both immigrants and to all of society.

 

Living in China. Tuesday’s Adventure

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By law pedestrians have the right of way when crossing a street in a zebra. Recently there has been a campaign to ticket drivers for not yielding to pedestrians.

At a zebra close to my house the police set up a camera trap to catch people not yielding to pedestrians. They had a camera strategically placed on a tripod aimed at the zebra.

I asked the police if I could photograph them. They said yes. I went across the street and ordered a cold lime fizz where I could sit and cool off while I watched.

Within a couple of minutes they bagged their first scofflaw. I got up and took my camera across the street. A small crowd, maybe 15-20 quickly gathered. As I reached the scene I steadied my camera arm on a yellow safety pylon when, crash!

One of the police had put his camera atop the pylon. I had knocked it to the pavement. He picked it up and turned it off. The lens didn’t retract properly.

I have never had any interaction with Chinese police, but I’ve heard rumors and horror stories about them. I had visions of myself disappearing into a jail cell surrounded by non-English speakers for weeks, if not months. I imagined being tortured and forced to sign papers I didn’t understand. I saw myself being beaten and expelled from the country.

I immediately apologized many times. I also made it clear that I would be happy to pay for the camera. The policeman and a couple of his friends kept turning it off and on. The lens moved, but never retracted properly. There was more attention paid to me by the onlookers than to the driver who had been stopped. I broke out in a sweat.

Fortunately one of the civilians in the crowd spoke English, and relayed my apologies and offers to reimburse to the officer. After a couple of minutes, the bystander told me the police said I should go on home. Thankfully, I did.

 

Living in China. The Chinese Real Estate Bubble

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NOTE: An edited version of this piece was published in the Shenzhen Daily on April 15.
Several years ago in the U.S. there were advertisements running all over the media for mortgages, second mortgages, home equity loans, and other housing related financing schemes. Some ads offered to loan 110%-125% of the home’s value. Others offered to make mortgages with no down payment required. Interest rates were historically low.

Encouraged by government policies, loans were made to people who couldn’t afford them. Loans were made to people without requiring a verification of their incomes. Repayments were kept as low as possible by requiring only interest to be repaid, thinking the rising market value of homes would build equity. With all the money these policies attracted into housing, the value of homes rose far above historic rates.

The bankers and mortgage brokers who made the loads sold them to money center banks who bundled them and resold them to investors, insurance companies, and other banks. The rating agencies gave the bundles top scores, indicating they were suitable for investment.

Fannie Mae and Freddie Mac, government agencies, bought loans from originators, and the originators used the proceeds to make new loans. Commercial property was on a path similar to that of housing.

There were at least five national TV shows about house flipping, where investors were shown buying a home, fixing it up, and re-selling it quickly for a large profit. The good times rolled so long as real estate was involved. Irrational exuberance was the rule, not the exception.

Meanwhile the stock market was booming with the dot.com bubble. Stock investors put some of their gains into housing. Everyone was getting rich.

Then, in 2001, the dot.com stock bubble began to deflate. People re-evaluated their finances and began to pull in their horns a bit. The house of cards began to collapse. Interest rates edged up causing adjustable rate mortgages to become unaffordable to marginal owners. The rise in home values ended, and began heading down. The mortgage bundles began to unravel as borrowers defaulted. Banks, insurance companies, and investors who owned these instruments found out they would default.

Similar scenarios were being replayed all over the world. The world’s economy began to slow. The worst financial crisis since the 1930s began. We are still feeling its effects today.

While not a perfect parallel, China is experiencing its own real estate bubble. Housing prices have gone up more or less constantly for many years. Some years the gains in value have been at unsustainable levels of 10-20%.

As the Chinese economy booms, many are getting joining the ranks of the affluent. They have high incomes well beyond what they need to live. Many spend their money on luxury goods like expensive automobiles and designer clothing. Others invest in housing.

Since the march of home values has been more or less straight up, housing has proved to be a historically intelligent investment. It was reported that house prices tripled between 2005-2009.

Starting in 2010, the Chinese government began enacting policies to curb the growth in real estate values. Chinese mortgage policies are considerably stricter than western standards. Still, in 2010 they were tightened further by requiring a 40% down payment on second homes. Many places including Beijing enacted restrictions on who could own a home, and how many homes a person could own. Interest rate were increased several times. New taxes on real estate transactions were introduced.

By the summer of 2011, the rapid rate of housing inflation began to slow, even stop. It looked like the government had successfully stopped the bubble from growing. But no, the housing market began to show signs of coming back to life in 2012. Recently the government passed a 20% tax of capital gains from the sale of a second homes. Whether that will slow things is doubtful.

There are two ways the inflation in housing can be slowed or stopped. The first if for the government to remove itself from the housing market. Eventually the laws of economics will cause the value of real estate to rise too high, and it will collapse of its own weight. Of course, this would hurt many people in a number of ways. Understandably the government doesn’t want to stand by as people lose their savings and investments.

The second way housing prices can be influenced is by making alternate investments available. The crux of problem is Chinese have very limited choices where to invest. As families accumulate wealth, they discover there is little they can do with it other than buy houses. The money accumulates like steam in a pressure cooker. It must have somewhere to go. The government has attempted to keep the lid on the pot, but eventually the steam will find ways to escape.

Banks pay interest on deposits that barely keeps up with inflation, so keeping it in deposits is not a good alternative to the 10% gain possible in housing.

The stock market is not trusted because Chinese accounting and transparency standards make evaluating shares difficult. Recently the American company, Caterpillar, took a $580 million USD write off from an investment in Zhengzhou Siwei Mechanical & Electrical Manufacturing Co., Ltd. of China when accounting fraud was discovered. If a large multi-national company like Caterpillar with legions of experts and accountants can be cheated, what chance does a small investor have in the capital markets? People instinctively realize this.

The best way for the government to curb housing speculation is to do what it can to make investments other than real estate available. If people are allowed to feel comfortable investing in stocks, mutual funds, foreign exchange, overseas markets, tangibles, etc. It would remove much hot money from the housing market and slow the irrational increase in values.

 

Living in China. I Know She’s a Pig, but I Love Her Anyway

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pigSo far as I know there are no hog farms in Futian, so I assume the porker shown being led into the Candor Pet Hospital is a beloved pet. And looking at her, what’s not to love?

This picture was taken a few days before the great Shanghai pig swimming event.

Living in China. What I Saw Today, Redux

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There is a building being constructed next door to mine. The construction noise is irritating, and goes on 12-14 hours a day, 7 days a week.

When I got on the elevator this afternoon, there was a large puddle of melted ice cream in the center of its floor. Apparently a mannerless, inconsiderate Chinese kid dropped it and instead of picking it up and putting it a trash bin, left it to melt. The day started badly.

I crossed an 8 lane highway on a zebra. There was a single car coming in one direction, the other traffic was held at a traffic light a few blocks away. The inconsiderate Chinese stepped into the zebra and forced the lone car to stop instead of being polite enough to wait two seconds to let it pass.

There were street sweepers every block sweeping leaves that dropped constantly. There are plenty of trees that don’t drop leaves, but the Chinese are too stupid to plant them. Government planning at its finest.

I saw old ladies going through trash bins looking for plastic bottles. How much can a plastic bottle be worth? Don’t these people have any sense of dignity? Shame?

I was harassed by many people trying to press fliers for real estate or restaurants into my hands.

A group of 5 boys passed by flipping playing cards into the air. The left a filthy trail of littered cards behind them.

I dodged piss, shit, dropped food, and puke as I walked. The air was bad. There were several areas in the park where I smelled urine.

I was amazed at what passes for fashion in China, especially Chinese women who seem to think a combination of leopard skin prints, plaids, stripes, and polka dots all at once is attractive. They also like to wear very high heels or platforms that cause them to wobble like a drunk when they walk.

I had to wade through knots of disgusting old men blocking the sidewalk as they sat playing cards and spitting sunflower seed hulls.

Car alarms seemed to blare constantly. The dopey Chinese seem to be unable to master the art of locking and unlocking their cars without setting them off.

A man was walking to my right. Suddenly he cut left right in front of me. Our feet tangled and I nearly fell down. He could have crossed behind me with no problems, but the thought didn’t occur to the inconsiderate turd.

Someone must have told the girl on the right that orange goes well with red, and the other one that leopard skin prints go with everything.I stopped in a café for a beer. It was very busy and there was only one table available. I decided I would order a small snack to justify tying up the table. They had a picture menu and I pointed to a dish of scrambled eggs stir fried with sweet green and red peppers along with onions. When the dish came out there were no peppers. I looked around, and other plates had peppers, so they weren’t out. My dish was flat tasting without the peppers. I didn’t eat it. Why didn’t someone notice it was not prepared correctly and fix it? Idiots.

My beer was cool, but not cold. The moronic Chinese have not mastered the art of restocking warm beers into the back of the cooler while pushing the cold to the front.

It seemed like everyone was screaming into their phones in the restaurant. The din gave me a headache.

My bill was 26 RMB. I didn’t get a discount, nor did I get a sweet or a few peanuts. Aren’t they aware of who I am?

On the way home I passed an old man who stared at me. I smiled and nodded at him. He continued to stare like a mindless owl as we passed. He never smiled back. I hope he strained his neck.

I bought a small bag of tangerines. I ate one at home. They weren’t sweet.

My day ended with thoughts of moving to Thailand or Cambodia dancing in my head.

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