The Silk Road to Recovery

by Larry Mongoss, guest blogger

It was interesting to see Xujun’s post on consumer activity in China. Her observations suggest some interesting developments may be coming in the years ahead. Curious about this, I contacted a couple of my friends in Shanghai to get their take on consumer activity. Their personal observations were consistent with hers, but they were prudently reluctant to draw any conclusions from that, especially given the Spring Festival splurging going on. When it comes to officially reported numbers, all were viewed with skepticism.

With all those disclaimers, it is still seems that the Chinese consumer is far more confident than his or her American counterpart. Could this mean that China will help rescue the US?

China and America have had an odd relationship over the past 20 years. Things get produced in China and sent to America. Then, instead of sending back other things of equal value, America sends an IOU. Lots of people, including me, have worried endlessly about what will happen when those IOUs come due. But we have been missing the point.

Now that America doesn’t want so much of the stuff it was not paying for, the Chinese will have to turn elsewhere, most notably to themselves. It sounds like the government, by simple admonishment, can cause a jump in consumer spending. The effect of that may dwarf their 500 billion dollar stimulus package announced last year. A pretty cool technique if it works, especially if it is possible to turn consumer spending back down as well.

Telling Americans to spend more, on the other hand, is not at all likely to work. Many would need to borrow money to make that happen, and right now those that can borrow don’t want to and those that want to can’t – or so it seems. Most Chinese, in contrast, only spend money that they have saved, and many have built up modest accounts over the past decade. Thus, narrowly from the perspective of consumer sentiment and ability to spend, China is much better positioned to grow consumption, and there are signs they are doing just that.

Put simply, the Chinese are taking care of themselves. Domestic consumption appears to be compensating for the fall off in exports, not magnifying it as is happening in Japan. And that consumption, though with a different focus than the export production, is related. All of this is good for China, at least in the short run, but what about America?

Since the 1980s, China has seen amazing economic advancement, in large part from catching up to western manufacturing techniques. Some people have belittled this as just being the activity of copycats, but that was exactly smartest thing to do. It is much faster to copy what is being done than to reinvent it. Giving stuff away, and manufacturing to the needs of the developed world, has allowed China unprecedented growth in both activity, and sophistication.

That sophistication is good news for America, because it also carries over to consumers. Chinese consumers love things that are made in America, and growing consumerism in China is a golden opportunity. In the past, the Chinese government has discouraged consumption to keep the export driven economy from overheating. Now, it will need to discourage exports, to keep the consumer driven economy from overheating.

An exaggeration most likely, but we have a very real possibility to see more exports from America to China. We may, in fact, see the huge American trade deficit turn into a trade surplus. America will be producing things, and giving them to the Chinese along with the money to pay for them. Only this time through, it will be because the money is being paid back by America instead of lent by China.

Unlike the past situation, which was clearly not sustainable, the present situation is. If America can become proficient at producing more than it consumes, it will pay back its foreign debts. Once those debts are paid back, America can turn back to itself, and use that excess production to take care of its retired people. China becomes the training ground for dealing with the social security crises people keep talking about.

For China the path is somewhat more convoluted. They are facing an even stronger demographic adjustment than America. In addition to doing something for the rural population, the Chinese need to temper their domestic consumption with the knowledge that people will be retiring without replacement in the near future. Developing the equivalent of a social security system is critical to keeping China functioning smoothly. Luckily for them, there is no shortage of poor people to practice on.

Hainan, China: Market Crunch

Surprise! Blogger.com is not blocked here in Hainan, though my blog is. This is illogical to me. I'm not sure what I have done to deserve such an honor. This also means that I can log in and post, but can't view my blog normally – quite ironic really.

Let me come to the main point quickly. I returned to China with the lingering question of how people fare in the financial crisis. (Apparently I'm not the only one who is concerned. An American writer friend wrote me to say she "would be fascinating to hear how China is weathering this amazing economic descent into wherever we're going. How is it affecting the people there? I'd love to hear." PekingDuck also had a post on this subject titled "China is the place to be," which attracted quite a few comments.

I've been throwing questions around since my arrival Friday (AA delayed my trip by one day, hardly a surprise). And this is the impression I got:

For urban people, the financial crisis is largely a Western issue. Life and business in Chinese cities are humming along as usual. If anything, the purchasing activity has only increased in the run up to the Spring Festival. A relative who works in the financial sector for a private company tells me that, since last fall, the government has changed its position from discouraging general consumption (in order to slow down the overheated economy) to encouraging domestic consumption (as the world braces for recession). Now, "to consume is to be patriotic," and people seem to be more than happy to follow this calling.

I was in Shanghai Thursday night and saw on CCTV that some cities were subsidizing grocery prices to help stimulate holiday shopping. My experience in Hainan, hardly a rich place, seems to question the necessity of such a policy.

Here are a few photos I took Saturday in a huge supermarket named Da Ruenfa owned by a Hong Kong company, where I went grocery shopping with my sisters and their husbands. I haven't been in such an overwhelmingly crowded store for decades.

Supermarket: an entrance ("New Year Goods Avenue")

The supermarket is one of the biggest I've ever seen, yet there wasn't even enough space for a single shopping cart to turn around. I was told it had been like this crowded for over a month. At the pork counter, people fought like looters ("as if the meat were free," my sister Maple complained). However the fact is that nearly all prices have increased because of the high demand. It was near the meat counter that a staff member came to stop me from taking photos. "We are a business, not a journalism unit. No photos," he insisted. Afterward my brothers-in-law said he probably thought we were from a competitor.

Supermarket: meat counter

After my sisters finally snatched their pork (to make dumplings for New Year eve), they went to the next counter to have it ground, a free service provided by the supermarket. However the staff working there simply ignored all such requests. Instead they were busy selling pre-packaged ground pork for 13 Yuan a pound, a 75% increase from the 8 yuan/pound of our pork. My sisters had a brief conference between themselves on whether to go for the expensive price and abandon their hard-earned unground pork, but they had little option.

There were about 40 check-out lines, each looked like it would take an hour or longer to reach the cashier. We diverted to look for the shortest line, another bit of hard work. Eventually Maple's husband found one at the farthest corner of the supermarket and called by cell phone for us to converge. "Line 15!" he ordered. It took a sweaty battle to push the packed shopping cart through layers and layers of human walls.

Supermarket: an exit

Presumably, it is premature to make a general conclusion from this thrilling shopping scene. For one thing, the biggest holiday season of the year may have colored things. At the dinner table with my family members, who came from different cold-weathered cities to gather in this warm island, Maple's home, for the Chinese New Year, I asked about housing markets and the situation of migrant workers. The consensus was that the export business (in which one of the men works) has been hit hardest (surprise!), especially the light manufacturers such as textile factories in Canton and other coastal cities. Those producers had been the biggest employers of migrant workers. The estimated contribution from the export business to China's GDP is about 20%. There had been about 200 million migrant workers across the country, and among those about 20-30% lost their jobs due to the financial crisis. That 40-60 million people was a big number to cause a stir, and the government worried intensely about the holiday season's "harmony and stability."

That was when I asked if they had heard Charter 08. The answer was uniformly "No," though they knew the name of one of the signatories Liu Xiaobo. My brief description of Charter 08 did not generate much interest. "Useless," one of the men said, in an immediate reaction. Then he thought about it a bit more and said tolerantly that such things were not that bad to have. "The democracy activists and foreign media complaints about our government help to improve policies sometimes. Just one of those natural noises that should be allowed to exist. But if they attack too much they will get attacked back by Chinese people." His assessment was that right now the government enjoys the highest trust ever in history, and others agreed with him.

Their guess on why the government has blocked the spread of information on Charter 08 was it 's timing, with the clouds of financial crisis hanging above the migrant workers and the Spring Festival approaching. At a time like this the government is most nervous about potential chaos and tends to overreact.

My relatives mentioned that local governments such as those in Sichuan, one of the provinces that supplies a large number of migrant workers from its countryside, were ordered to arrange local jobs for the newly unemployed who returned home from coastal cities. There is no concept of unemployment insurance for those people, but apparently actively putting them to work is part of the mandate. Many did get new jobs, I heard, though no one could say to what extent the problem had been resolved. I may find out more about this when I go back to Sichuan after the Spring Festival.

About the housing markets: I heard Canton was again hit the hardest, with an estimated 40% plunge in real estate prices. People say this was mainly the result of bankrupt factories selling no-longer-wanted properties cheaply. Chengdu's real-estate market, where my younger sister bought a yet-to-build house last year, went down 10-20% in the last several months, but it has stabilized since the government began to encourage domestic consumption. Chongqing's housing market has actually been going up, because its prices were low to start with. These two cities are among my planned next visits.

The Chinese stock market has crashed badly, but none of my family members were affected because they are not players. Lucky for them.

Terracotta Typewriter

One more thing before I go --

Matthew Lubin, a writer and editor living in China, is starting a new literary magazine, Terracotta Typewriter. The magazine welcomes submissions from Western expats in China and Chinese expats in other parts of the world, or anyone who has something to say about China. You can write about any subject, as long as there is a connection to China. I think this is a great idea. Please take a look and send your creative work to Terracotta Typewriter!

See you in February.

The Sky Is Not All Grey

Postcards from Tomorrow Square: Reports from China
by James Fallows

A review by Xujun Eberlein

1.
A proprietary approach I use to help assess English journalism books about China is to measure how much they tell me, a Chinese, what I don't already know. This, needless to say, lacks objectivity, and it can easily undervalue an otherwise excellent book. As an example, Out of Mao's Shadow by Philip Pan consists essentially of stories I had already read from the Chinese media or the internet. Not new to me, but that doesn’t mean the book is not worth reading for Western readers (in fact, it is).

On the other hand, this approach raises a high bar for journalists writing about China. To find stories not broadly known even to the Chinese requires not only extraordinarily acute ears, but also the admirably open mind of a deep thinker. Thus, I can narrow down my reading list to a few outstanding books. James Fallows' new book, Postcards from Tomorrow Square: Reports from China, is one of them. Many things he writes about are new to me, but that's the least of the delightful surprises. Continue reading on The China Beat >>

The Mosuo Walking Marriage on Lugu Lake (2)

by Maple Xu

(Maple's travel log continues from The Mosuo Walking Marriage on Lugu Lake (1)...)

On the long distance bus to Lugu Lake, two men sitting behind me had been chatting about "walking marriage." One man asked, "Mosuo men can 'walking-marry' freely, but they don't get to live with their children, wouldn't they be too lonely in old age? Who take care of them when they get old?" The other replied: "The abundant romance of youth, is worth the loneliness of old age. Everything has a price after all."

The two men did not know all the facts. Though Mosuo men live with their mother, and are not responsible for rearing their own children, they have the duty to help bring up the children of their sisters. In a Mosuo family, uncles are the decision makers on external affairs. They have an adage, "The biggest flying thing in the sky is eagle, the biggest walking thing on the earth is uncle." When they get old, their nieces and nephews attend upon them until their death.

Lugu Lake

A friend once told me, his Mosuo friends couldn't understand why the Han people have terms like "lonely old widows" and "five-guaranteed households" (五保户"). They don't understand why Han families are full of domestic fights, even violence and family wars. Those are things they just can't imagine. The Mosuo people living along the Lugu Lake are proud of the auspicious and peaceful ambience in their family life; in this respect they think they are superior to any other race.

*

One morning I was photographing a sunrise at the lakeside, and ran into a bunch of tourists waiting for a bus to return to Lijiang. A fifty-ish northern woman was talking volubly. She said, "Yesterday I asked the young man rowing the boat, 'You sing and laugh all day, do you ever have an unhappy moment?' But he asked me back, 'What is "unhappy"?' I wasn't convinced and again asked a girl who was washing her hands in the lake, 'Are there times that you feel unhappy?' She replied, 'Unhappy? Why unhappy?'"

At this point the northern woman got very excited and raised her voice, "Look! They don't even know what unhappy means! They are always happy!" Her companion replied that nobody can always be happy. The woman argued, "They don't suffer extramarital affairs or property disputes like in our Han families, why shouldn't they be always happy?"

Her friend teased, "Sounds like heaven, then why don't you stay here?" The woman said seriously, "I really wish I were a Mosuo woman!"

That was the moment I understood why my friend has lived here contentedly for ten years.

*

Last night at my friend's teahouse, we warmed ourselves by a fire and chatted. The landlord came by, and I tagged him. "I have many questions for you," I said. He sat down by me and said good-naturedly, "I'm happy to answer any question."

My friend's tea house on Lugu Lake

- First question: How come you and your wife live together?

- That's because we have three brothers but no sister, and our mother died early. A family must have a woman as the household head; I'm the oldest brother, so my wife has to live here and take the responsibility of managing the family. Actually, "walking marriage" isn't the only form of marriage. There is another form: man and woman live together with either one's family. The principle is that the relationship is based on love, to marry by will, to leave freely. If the relationship is terminated, then each side returns to his or her mother's family. Unlike me, my two brothers are in walking marriages, and my youngest brother is the village head.

- How did you decide on your wife?

- Our love is no different from you Han people. When I was young I dated three or four girls. Only after I had children with my wife did the relationship become stable.

- How do you end a relationship?

- When the woman stops opening her door, or the man no longer comes in the night, the old relationship is ended and both sides are free to start a new one. It's all natural.

- How does a woman's family view her man in a walking marriage?

- The man comes to the woman after dusk, and leaves before dawn. At first he would avoid running into her family members. In the morning if you see sheepish men passing by, chances are they are returning home after a night of the walking marriage. The lovers will stay shy, even pretending not know each other on the street, before they have children and their relationship goes public. If you observe closely you will see that, in the night, no matter who knocks on a door, no one inside will open it for you, unless you shout out that you are an outside visitor, then an elder or a child will come.

- Since a man does not have the legal obligation to raise his children, wouldn't that give men too much freedom and women too much work?

- Mosuo women are the happiest members in their family. The female house head has all the power, including control of property and money. Her siblings take care of the children together with her. Even in sexual relationships women take initiative. On the surface, men have all the freedom, but once he is rejected by his girlfriend, there's nothing left for him except a "spring dream." There is a Musuo adage, "Men's heaven, women's world."

- Could a man be walking-marrying to three women simultaneously?

- (Laugh) Where does his time or energy come from? When I was dating my wife, we had a 20-kilometer distance between us. It was only because we were young and energetic that we lasted. Although there is no rule on how many walking marriages one can have, you must terminate one relationship before starting another. Custom and tradition do not allow two relationships simultaneously; an unfaithful man is going to be despised. This is no different from you Han people.

- Would you enter another walking marriage?

- Certainly not. What age does what things. Most Mosuo people settle down after they have children. Furthermore, I'm very satisfied with my present life. My wife is good in every respect!

What he said made my thoughts fly to the Mosuo life style. All relationships are based on love. A big matriarchal family with tens of members is filled with joy and peace. Children are loved by multiple mothers. Elders calmly enjoy their final years with a loving family. In another thousand years, will we Han evolve to such an ideal state? But the vanguard Mosuo people already began the heavenly life 1500 years ago. #

(All photos by Maple Xu, ©Copyright 2008, Maple Xu)

China: Revolution or Reform? - A Summary of the "Charter 08" Dispute

New America Media, News Analysis, Xujun Eberlein, Published: Jan 07, 2009

(Note: the following text is my original draft, slightly longer than the NAM published version, with more complete links. Posted with NAM's permission. - Xujun)

During the final month of 2008, there was a heated debate among Chinese bloggers and commentators outside of China. The cause of it was "Charter 08," a democracy manifesto originally signed by over 300 Chinese citizens and published on the internet on December 10.

Times Online said Sunday that since then it "has been signed by more than 7,000 prominent citizens," but the number is difficult to verify. Two versions of the English translation for this manifesto can be found online, one at nybooks.com (by professor Perry Link), and one at Human Rights in China. While the former is widely linked and reprinted, the latter is a more accurate translation of the Chinese original. A detailed recounting of the birth of the Charter can be found on Fool’s Mountain.

By now the hubbub around "Charter 08" has largely died down, however the issues raised in the dispute continue to beckon for attention. There are unanswered questions as to why the Chinese government and the US media reacted the way they did, and whether the Charter has achieved its intended effect. As such it might be a good time to look back at the reactions the event has provoked, and make a few observations.

The official reaction from the Chinese government was both harsh and overdone. Liu Xiaobo, a primary drafter and signatory of "Charter 08," was arrested in Beijing two days before its publication. No explanation was given by the government. Twenty three days later, Liu was allowed to see his wife for New Year’s Day, but police still did not say why he was detained. Many other signatories were summoned and threatened, according to a post on Fool’s Mountain.

Any discussion of "Charter 08" likely has been banned in China; a Google search using the Chinese keywords turned up no mainland links on the subject.

A well-known dissident writer and journalist in Beijing, Dai Qing, also one of the signatories, said in an interview with Voice of Germany that "the [Chinese] government's reaction is too irrational, a total surprise to us."

On December 11, The US State Department's spokesman Sean McCormack said in a statement that "We are particularly concerned about the well being of Liu Xiaobo, a prominent dissident writer, who remains in the custody of authorities."

According to Time Magazine, Chinese Foreign Ministry spokesman Liu Jianchao told journalists on Dec. 16 that the U.S. position was another example of the unwelcome "interference of other nations in China's internal affairs."

Curiously, major US media outlets, CNN including, have been unusually quiet, despite the fact that the Charter is hailed as a major breakthrough by its supporters. Time Magazine and the Christian Science Monitor were pretty much alone in reporting on the Charter, with the latter commenting in a somewhat upbeat tone that "the Communist Party's hesitancy to crack down harshly on the scholars, lawyers, engineers, and others who issued the so-called 'Charter 08' document sends a subtle signal of hope."

More curious, and changing, reactions, came from Falun Gong, or FLG, a religious and political group that has been banned in mainland China. A search on FLG's Chinese language website Sunday came up with 100 links cheering "Charter 08," with titles such as "Reform Is Dead, Long Live Revolution!" However a click on any of those links gave only a blank page. Remnants of posts here and there indicate that FLG originally found "Charter 08" an exciting sign of the coming revolution and supported it whole-heartedly. Later, though, they made a 180 degree turn after the FLG leader deemed the manifesto not revolutionary enough, but rather a "ghost shadow" of the communist party.

Understandably however, revolution is favored by few Chinese, whether supporters or contenders of Charter 08. In contrast, many pointed out the legitimacy of Charter 08 in accordance with China's constitution.

Among the well-known signatories, Dai Qing calls the Charter a mild appeal. "If the government can't even accept such a mild appeal, I think the government is too frail," she says in the aforementioned interview. A scholar of Western philosophy, Xu Youyu says the Charter is totally constitutional, and his signing was a citizen's "rational and responsible decision." Bao Tong, a high-ranking official imprisoned after the June 4th movement in 1989 and still under house-arrest, angrily inquired of the government "What crime has Charter 08 committed?"

On nearly every website I visited that discusses Charter 08, in English or Chinese, there are not only voices advocating and opposing, but also supporters raising constructive criticism and contenders issuing moral support (plus the usual white noises and meaningless vituperates). The issues that are at the center of argument include – by no means an exhaustive list – whether the ideas are too "Western," or the proposed democracy model suits China; whether the proposal for a "Federal Republic of China" makes sense, or it has gone too far; whether the wording in the Foreword is needlessly inflammatory; whether Taiwan's democracy is a good model for the mainland; whether the aim of the Charter is to agitate the government or have a practical impact.

There are also a few one-of-a-kind remarks worth noting:

-- A blogger on dwnews.com is unhappy that the signatories include a well-known advocate for Tibet independence. He says he is against the Charter because it supports the Dalai Lama's "republic of greater Tibet". (On a related note, On December 12, the Daila Lama issued a statement saying “I am greatly encouraged by the launching of Charter 08.")

- Taiwan News published an editorial on Dec. 25 to praise Charter 08 but also criticize it as "unable to transcend 'great Chinese nationalism' as its implied commitment to eventual unification seems to share the CCP`s rejection of the free right of choice of Taiwan`s 23 million people, not to mention the people of Tibet or even Hong Kong and Macau."

- A religious blogger claims that she does not support the Charter because it doesn't address how to reform the Chinese people's faith.

As a Chinese adage goes, "What bewilders the players, spectators see clearly." A European expat blog in China, Chinayouren blog, which was the first to note the inconsistency between the Chinese original of Charter 08 and Prof. Link's translation of it, published a post on December 26 titled "Charter 08 and political change in China." It assesses positively the Charter's significance and provides several constructive criticisms. The author points that, "A document of this kind should try to seek the maximum consensus in mainland China. This is, in my understanding, the main weakness of the Charter 08."

The post ends with:"… Most importantly, from a theoretical point of view, figures like Mao or KMT should have no place in a Charter that wants to unite the Chinese. The recent History of China is an amazing tale of cruel failures and unequaled successes. Events that need to be openly discussed at some point, certainly, and compensation given to the victims. But direct accusations are altogether at a different level and unworthy of sharing the same document with the generous ideals stated in the Charter. These things do not only weaken the Charter 08 from a practical point of view, but also reduce its soundness as a Universal Statement."

If nothing else, "Charter 08" has stimulated a great discussion on China's future direction. #

Chinese Humor Posters

A friend sent me the following photos. If you can read Chinese, you're guaranteed to get a few chuckles out of them. The English translation on some of the posters is incorrect, so I provided my own. I'm afraid though, the humor may have been lost in translation.

"Everyone pretends to be proper; I'll have to pretend to be improper"

"Dare to love, dare to elope"


"Carrying talent is like being pregnant, only time can tell"

"Oh love is like a ghost - more people believe in it than encounter it."

Today!: China's Premiere Underground Magazine Turns 30

(image from http://book.ifeng.com)

The January 2009 issue of Hong Kong's Mingpao Monthly published an article titled "For Today's Yesterday and Tomorrow" by poet Liao Weitang. It reports on the celebration activities for the 30^th anniversary of Today magazine in Hong Kong during December 11-13. The celebration was initiated by Bei Dao (北岛), and many Chinese poets participated, including my old friends Zhai Yongming (翟永明), Ouyang Jianghe (欧阳江河), Meng Lang (孟浪), and a new friend Xi Chuan (西川, whom I met in Beijing in summer 2007).

American readers probably know nothing about Today, the once extremely influential "underground" literary magazine in China. Nobel nominee Bei Dao was one of the founding editors of the magazine, and his poetry first became known to us through Today. When I was a university student in China, in the early 1980s Bei Dao's sorrowful lines such as "Privilege is the passport of the privileged / low is the epitaph of the lowly" were recited on every campus I visited. Whoever got hold an issue of the mimeographed Today magazine, it was quickly grabbed by another student. The magazine passed from hand to hand until it literally melted to pieces. Oh, what an unforgettable time it was! I can't think of it without being sentimental. We gathered in undersized dormitory rooms in this and that university, in small groups, arguing about China's future and read aloud poems from Today. As the first batch of students admitted to universities after the Cultural Revolution (the so called "year 77," though our first class began in spring 1978), we felt responsible for changing China. Each issue of Today induced more passion in us, even after the magazine was banned (around the time the "Democracy Wall" in Beijing was demolished in late 1980, I think).

I know of no other literary magazines, official or otherwise, that had the influence on young people Today did in the early 1980s. (Around that time there were many others, underground magazines thrived like bamboo shoots after a spring rain.) Later Today resumed its publication overseas, however it has lost its clout. On the other hand, it is the only unofficial magazine from the post-CR time that still exists today.

Bei Dao says in commemorating Today magazine's 30^th anniversary that (in translation):

I want to emphasize that, a nation needs a spiritual sky, especially at a time of materialism. Without imagination and passion, no matter how wealthy a nation is, it is still poor; no matter how powerful a nation is, it is still weak. In this sense, Today returns to its starting point: it revolts not only against autocracy, but also against abuse of language, mediocrity in aesthetics, and wretchedness in life.

Sadly, the impact of poetry seems to be getting weaker and weaker as society grows its material wealth. Perhaps poetry's revitalization requires mankind's purposeful effort to restrain both material wealth and the development of luxury technologies.