Americans spend too much and Chinese don't spend enough

The gist of this New York Times article from last week is that China holds approximately $1.5 trillion in US government debt, China realistically has no other choice but to keep buying this debt, and the buying of this debt has "helped enable America's own fiscally dubious habits." That is one insane marry-go-round ride. 

Another interesting takeaway:

Now, the United States and China are trying in their different ways to adjust. American policy makers are urging more savings and less consumption. Chinese officials take the opposite tack, promising to encourage more consumption and less saving.

Americans spend too much and Chinese save too much. 

There could not be a safer time to use high-speed rail in China than right now

So this happened, apparently because of this. Two high-speed trains collided four days ago and it has been all over the news, both in China and internationally. This is not the first time there have been problems with the high-speed rail lines in China. Most recently much as come out about the corruption and construction problems associated with the new Beijing-Shanghai rail line. Two weeks ago even The China Daily ran an editorial pleading for a probe into the management of the new line. 

But you know what? Even with all of these problems, there could not be a safer time to use high-speed Chinese rail.

Waiting to board the high-speed train at the new South Beijing Railway Station.

The Chinese government is very harsh and extremely thorough in its response to any event that has somehow shaken the public's confidence in the government's management of the country (see the earlier post about corruption executions). Two recent examples have been the milk scare of 2008 (when it was found that melamine, an industrial chemical, was being added to baby formula in an effort to artificially raise the measured protein concentration resulting in some baby deaths) and the large scale destruction of schools as the result of the Chengdu earthquake (building codes were not properly followed, resulting in hundreds of school children deaths). 

This phenomena of government action after an accident is worldwide, but the extreme measures China takes to gain back public trust after these accidents/errors is enormous (think airport safety after 9/11 except happening much more often). In the next few weeks, the whole of the government will seemingly be focused on rail safety and rebuilding public trust in the system. Not sure if I would put odds on another execution, but you never know. 

2 Minute Interview: A German In China.

Below is my interview with a 27 year old German who has traveled back and forth between Germany and China the past three years. He's tall. That's pretty much all I can say. 

Me: "Can I interview you for 2 minutes?"

German: "Um, I guess."

Me: "Why did you come to China?" 

G: "Like... what?"

Me: "Why did you originally come to China?"

G: "I watched the olympics and was very impressed actually."

Me: "What surprised you the most when you came here?"

G: "How dirty and noisy it was. A negative surprise. I was positive (sic) surprised by the international community and everyone makes friends so easiy, and the chinese language is not as hard to learn as it looks like."

Me: "Um, another question..."

G: "It's been one minute already!"

Me: "Okay, okay. Everytime you go back to Germany, do you miss anything about China?"

G: "Well, everytime I go back i get board very quickly. Which sounds crazy, but its true. I get bored after one week. So it's good to come back to China."

Me: "Do you have a chinese girlfriend?"

G: "I don't..." [Pauses in deep thought]

Me: "Do you like Chinese girls?"

G: [Shrugs his shoulders] "I do like chinese girls."

Me: "You don't want to talk about it?"

G: "Well I do like chinese girls but it always seems like I end up with the Russians. I do need a Chinese girl to improve my Chinese."

Me: "Hmm... What's your favorite meal and favorite city?"

G: "Since I am a Qingdao ren [Chinese word for person], I would have to say gala [steamed oysters]. Qingdao, even though it's hard to tell because Qingdao is the only city I lived for a long period of time."

Me: "Any other information you'd like to say?"

G: "You can find me on Renren!" [Renren is a Chinese social network]

Me: "You're on renren? Why?"

G: "Don't know. To find girls."

Me: "Has it worked?"

G: "Girls get back to me but I don't really meet them. Good to use the characters [Chinese writing] you know to talk to them." 

Me: "Well this has been an exciting interview!"

G: "It was very exciting for me too!" [Sarcastic look on his face] "Tell everyone to find me on Renren!"

The beginning of the end of free wifi? Not really.

One thing I have always enjoyed in China and thoroughly missed when being back to the US is the amount of available free wireless internet. Most cafes, Western restaurants, and sports bars in major cities tend to have free Wifi available. This was massively convenient when on the run with no private access (such as when on a trip or on the other side of town before I splurged on 3G access).

Word comes via the New York Times that business in Beijing now have to pay $3,100 (about 20,150元) to install security software on all public Wifi networks. I assume this is a one time fee. So is this the end of free Wifi as we know it? No. Guess it depends on who is saying 'as we know it.' I can only speak from a foreigners point of view.

Most foreigners use free internet in three types of places: coffee shops/cafes, Western restaurants, and sports bars. So let's start with those. 

  • Coffee Shops: The popularity of these free wifi networks at franchised cafes is hard to dismiss. Every single Starbucks I have entered in China has seemingly 60-70% of its patrons on laptops (or more recently iPads) using the internet. It is critical for places like Starbucks to offer free Wifi as the product they are selling is relatively expensive (even more expensive then in the US). Free Wifi has been a bullet proof way to get people in the door and has helped Starbuck's expansion in the country. I don't see this changing for most cafes as free Wifi has become such an incentive for costumers. The cafe mentioned in the NYT article that stopped offering wireless stated a 30% drop in business. If the installation of the software is a one time fee, how can the cafe not afford to pay it? Seems like the economics would dictate paying the one time fee to keep 30% of your customer base. 
  • Western Restaurants: You will see a large drop in the number of restaurants offering Wifi, but this makes no difference at all. Unlike coffee shops and cafes, I see very few patrons, whether Chinese or expats, on a laptop. 
  • Sports Bars: Most sports bars will pay the fee. You have too many foreign patrons on computers or iPads following games or doing work while watching. These bars have enough revenue to pay this one time fee. 

So all in all, for the average expat, they won't see much change (maybe a small cafe here or there that no longer offers Wifi). I also truly believe the same is true for the typical Chinese businessman or teenager. Most Chinese businessmen wanting to get online at a cafe now frequent the same well known Western franchises as expats. And these will continue offering Wifi. Most teenagers wanting to get online outside of the house go to internet bars which all have wired access and already require personal identification. 

A few more observations:

  • You know who may benefit the most from this law? China Mobile and China Unicom. They have been desperately pushing their new 3G internet services (both those built into phones and also usb sticks for laptops). For many Chinese businessmen, there has been enough free Wifi that a 3G usb stick is not an attractive purchase. But if enough local places stop offering Wifi, a 3G usb stick may suddenly seem like a better purchase.
  • If I was a bar/cafe owner, I would want this software installed. The scariest thing I could imagine is customers on my Wifi network and me having no control what they are writing, searching for, or looking at. It takes one customer to post something the government does not want and the Wifi internet location of that posting is traced back to me. That's potentially bad news. 
  • It seems this rule is currently only for Beijing. How long before the same rules are applied to businesses in other cities like Shanghai, Guangzhou, and Shenzhen? This seems like a very traditional Chinese government thing to do. First enforce the new law in only one city or for one group of people, and if all goes well, make it country wide. But if the law, as first initiated, comes up against resistance and generates immensely bad press, it is quietly withdrawn, stated that the law is being reworked, and in reality is put in the trash, never to be implemented again. So this whole episode seems like a trail for the government to evaluate if they can push this country wide. 
  • If Wifi is popular enough that unplugging it drops business by 30%, isn't this enough incentive to pay the fee. I remember news stories about cafe owners in America getting rid of free Wifi because patrons would come to use the internet but spend very little on drinks or food. I don't know the exact economics, but Wifi in cafes here can be very important for keeping high customer numbers.

Chinese word of the day (It's the small words that trip you up)

橙色 (cheng se) = Orange (as in the color)

So last night, after almost 5 years in China, I tried to say the word for orange color and drew a complete blank. Made me thought, "have I ever used the word for the color orange before?"

I thought maybe the name of the color would be the same as the fruit, but then thought that might only be an English convention. Sure enough though, the name of the color and fruit are directly related (the fruit is 橙子 - cheng zi).

色 (se, pronounced 'suh'), is a suffix used for colors, examples being white (白色 - bai se), black (黑色 - hei se), and red (红色 - hong se).

Apple, do it for the children. Get this China Mobile deal done fast

Apple needs to get this China Mobile deal done fast, because nobody in China uses China Unicom (except me, iPhone owners that want 3G, and a few other 180 million or so people). The Wall Street Journal reports that a deal might be close. 

So I get 3G service on my iPhone, and it's very good service, but I don't get to do any of the cool things that all the people my age get to do on China Mobile. Things such as being able to buy a special sim card allowing them to use their phone to pay for metro and bus rides, or winning pre-paid service when they scratch the prize space on their restaurant receipts. 

I have asked many Chinese friends why everyone, especially the 30 and unders, use China Mobile and not China Unicom. Most of the answers I get amount to, "I dunno, just because, it's better."

I just asked a friend sitting with me now and she said:

I don't know. I started using it in school before. I'm just used to it. My father also said something before about how China Unicom reception was not that good. 

Upon asking her if she would consider changing to China Unicom and why not (because I already knew the answer), she said:

No... I cannot really say why. 

The other day I asked another friend and all she could say was:

I don't know, China Mobile is just cooler and all the young people use it.

People think finally opening the iPhone to Verizon in the US was big? China Mobile has 600 million subscribers, or twice the size of the US population. 

As far as I can tell, most young people use China Mobile but they just don't know why. It is just 'cooler' and they have been using it since they got their first phone. And they're not going to change carriers (not matter how immensely easier it is to do here) just to get the iPhone on 3G (there are iPhones on China Mobile, but I can tell you they were not bought at official Apple stores). 

So Apple, get this deal done, and fast. I would recommend announcing a China Mobile deal at the unveiling of the iPhone 5 and get that sucker out here as soon as possible. 

The best (maybe?) Chinese Apple knockoff store i've ever seen

Today on the web I came across a posting about an Apple store knockoff (posted by BirdAbroad). I have seen many Apple store knockoffs in China, but this may be the first using the correct Apple store employee name tags. 

I do however often see shops selling Apple products in a Apple store-mimicked environment. Even in busy computer markets, the stalls selling Apple products are routinely made to appear like Apple stores, no matter how small the stall selling the products. This is especially true of Huaqiangbei computer market street in Shenzhen.

Below is one of the most interesting I have found (some old photos, excuse the quality). Located in one of Huaqiangbei's huge computer malls, out of nowhere within rows and rows of small computer stalls is an "Apple Experience Center." It looks far different from any of the other stalls around it, just like real Apple stores. 

So Apple not only created new, outstanding stores in the US (and around the world), but also seemingly provided non-official retailers a styling template for selling their products. A template that happens to look excellent when placed next how computers are normally sold in large computer markets.