Sunday, June 26, 2005

"Frying" Real Estate, Stock, and Goods

In the "Prologue" to the previous set of 5 posts, I noted that chao dipi or frying real estate was a problem in Zhongguancun. It is also a problem throughout cities in China and the world (witness the current real estate boom/speculation).

To clarify things, I want to quote extensively from a book by Ellen Hertz entitled The Trading Crowd: An Ethnography of the Shanghai Stock Market, published by Cambridge University Press (1998). Find it at Barnes and Noble here: (

I quote from Professor Hertz in order to clarify the meaning of chao or frying, which she discussed here in both a general and particular (to the Shanghai stock market) context.

The following paragraph is found on pages 140-141:

"Chao literally means "to stir-fry," the characteristic cooking technique in Chinese cuisine. It is used in the stock market--but also in the stamp, real estate, antique, goldfish, foreign currency and other markets--to refer to buying and selling within a very short time period, profit being earned through price differentials (chajia), rather than "real" increase in value. My informants always appeared mildly amused by the term, suggesting that its culinary connotations remain close to the surface. When explaining the analogy, informants highlighted rapidity, that is, the fact that the contents of the wok are transformed from raw into cooked food in a very short time. At a second level, the reference to food highlights the fact that one earns one's living (and hence one's eating) through this activity: someone who "stir-fries" stock for a living eats as a result of what he does. Finally, stir-frying involves a quick flip given to the contents of the wok; this flip has its analogy in the somersault (gentou) which stocks make when they double in price, and, paradigmatically, it is this quick somersault, as opposed to the steady climb of long-term investments, on which the dahu [big players of the stock market] nourishes himself."

I hope to return to chao in the future in reference to chao huo, a type of goods in Zhongguancun. As a teaser, chao huo refers to the practice of selling electronics products that have been stir-fried from a second electronics store. The U.S. equivalent would be Best Buy selling a VCR that it bought from Circuit City and then re-sold to the Best Buy customer.


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