Zhongguancun 中关村

Zhu Kezhen's Diary

2011-09-22T03:33:00.000-07:00

'Shanghai Mayor Chen Yi spoke for one hour, explaining the importance of theory to the Communist revolution. He said that the Communists were humble and willing to listen to advice, that criticism should be penetrating, and that the essence of democracy was both that the minority followed the decision by the majority and that the majority should respect the opinions of the minority.

What he said was very reasonable.

Next Feng Ding from the Party Department of Propaganda spoke of Marxism and Leninism as the highest principles of all the theories in the world. He said that subjective opinions of the proletariat were more objective than the objective opinions of the bourgeois.

What he said was really hard to understand.'

Zhu Kezhen
竺可桢日记
9 June 1949

(Edited slightly from an article by Zuoyue Wang, translated by him, on Saving China through Science)

Wo Ju (Woju) – Snail Space 蜗居, Episode 30

2010-04-30T10:09:00.000-07:00

Episode begins with Haiping warning Haizao about having the baby she is pregnant with from Secretary Song. Haizao is optimistic that Song will help her and her child. Haiping says that only pessimists survive, and that she can only rely on herself.

Later in bed, Haiping and Su Chun are discussing Haizao. Haiping blames the city. "This broken city! This broken city! (这破城市！)" she exclaims, it is such that she cannot even take care of her own sister. Su Chun exhorts her not to blame the city, since every life goal and every place one lives is chosen by one's self. There are many people like Haizao, who care only about their short-term gains.

Haiping and Su Chun discuss the fact that they will get the keys to their apartment the next day. Haiping wants to have the apartment appraised both for size and quality. Su Chun says they have bought an apartment off the plan (in advance, 期房) so it is just like making a wager. They will only know about the quality after they live there for a year or two. And their usage rights are only for 70 years, not 80, and by that time the apartment will be worn out.

Haiping and Su Chun run into Grandma Li's son, daughter-in-law and grandson. It turns out that the apartment given to them because of the death of Grandma Li is two floors under Haiping and Su Chun's apartment. They will be neighbors again. Haiping complains that they cannot get away from life of the shikumen.

Secretary Song buys much expensive furniture, imported Italian furniture, for Haizao and her stomach is noticeably large.

The next scene is of Haiping and Su Chun at a cheap market for finishing supplies. They buy some discarded tiles, a kitchen, and building supplies. Haiping is seen lugging heavy supplies up the six flights to their apartment. They put in the floor, a rug, and a table and are putting finishing touches on things.

A man comes to the door of Haiping and Su Chun's new apartment. He says that the apartment they live in, along with many others in the xiaoqu, is 2.7 meters less area than in the contract, meaning they paid 20,000 yuan extra (or didn't get what they paid for). They are asking for all the residents to sign a petition in order for them to weiquan "uphold their rights". The man also has a petition to change the property management since it is an "open system", meaning that the garbage collectors are not employed, and only come when they want. Haiping signs both petitions.

Secretary Song's wife is waiting when he arrived home late. She is angry and he says they can divorce. She cries. Song says he knows that Secretary Sun is investigating him, and he will either become a dragon (master) or will spent the rest of his life in jail. His wife is concerned.

Haiping says: "Gold houses and silver houses are nothing compared to one's own dog-house (金窝银窝都不如自己的狗窝). Today is the most at ease I have ever been in my life."

Wo Ju (Woju) – Snail Space 蜗居, Episode 29

2010-04-30T10:07:00.001-07:00

The scene from end of last episode repeats, with the roof the house falling on Grandma Li and the construction workers and cronies fleeing.

Grandma Li's son and daughter-in-law frantically pull bricks off the pile, also unearthing construction hard hats. One of the hard hats has a water bottle inside with the worker’s name painted on it.

Secretary Song receives a call, and the person tells him to look at the newspaper. On the front page, the first story is about a demolition where a 77-year-old woman was killed by a collapsed building. Song is furious. He calls Boss Chen to his office. He curses and yells at Chen. He tells Chen to die. Song tells him to give one of Chen's two remaining apartments to the Li family, and solve all their economic needs. The other apartment should be given to the police, and if the man who organized the actual demolition is arrested, Chen should take care of his family. Chen says that he thinks there might be a problem, because the police "eat vegetarian" (吃素) [are immune to bribery?].

Song goes to Haizao's apartment very late. She awakens and comes to ask him what is the matter. He says nothing. She says she is pregnant. She wants to get an abortion. Song tells her to have the baby. They argue.

Song arranges for a nanny (保姆) to take care of Haizao. He also takes her shopping and buys the dinning room table that his wife had looked at, but was too grudging to buy.

Secretary Sun (Song's superior) arrives back from Beijing to hear the new news.

Secretary Song and Boss Chen are in Song's office. Chen says that he will decorate the apartment for Grandma Li's family, and everything will be okay. Song says: "a life for an apartment". Song tells him to decorate the apartment in a durable way, not a luxurious way. He also tells Chen to give them 20,000 yuan, and not 200,000 because otherwise they will think the money comes so easily that they can rely on Chen for the rest of their lives. He also tells Chen that he will be taking the apartment that Haizao is living in.

Secretary Sun upbraids the investigator. He wants proof, proof of an official's misbehavior, proof the loan from Bank President Xie, proof of the demolition and death of a person. "Let the proof speak." He says that their investigation must continue, despite resistance from people in city police. Beijing is also investigating.

Wo Ju (Woju) – Snail Space 蜗居, Episode 28

2010-04-30T10:05:00.001-07:00

Secretary Song's wife and daughter are upset because he is never home for meals, and sometimes doesn't come home at night. He comes home late again and his wife tells him to sleep in the den. He grabs her, pushes her down on the bed, and rapes her (apparently). The next day Song calls his wife to say he is not coming home that night.

Boss Chen and his cronies are thinking about a plan to frighten Grandma Li. Chen says putting a dead cat or some feces in her house, but his cronies say that is too low for him, a big CEO. Instead, the cronies say they will use the "thatched boat to catch arrows" [use someone else's offensive to gain the offensive, from Three Kingdoms one of four classics of Chinese literature, I think].

The investigator comes to see the head official, Secretary Sun. The investigator says: "We have learned of a new development. Bank President Xie has borrowed 300 million from the bank and given it to Chen Sifu (Boss Chen)’s company. We have also learned some things about Dajiang Property. Besides the shikumen project that is related to Song Siming (Secretary Song) [i.e. the demolition involving Grandma Li], they found out that all the funding for Chen's company to list in Hong Kong comes from the bank, a Hong Kong businessman, and Tianda Property (the real estate company owned by Song’s other friend)." Secretary Sun tells the investigator to increase their surveillance of activities and not let out any word of the investigation. The next day Sun will go to Beijing to tell his boss in person.

Song has Boss Chen buy a Ferrari and redo his image to look like a CEO.

Song tells Chen to hurry up and complete the demolition. Chen meets with his cronies. They tell him the "grass boat/catch arrows" plan is to first distract Grandma Li's son and daughter-in-law with a first demolition team, then knock a hole in the wall with a second team. Once it rains, none of them will be able to live anymore. Boss Chen says this is a good plan. Then he says: "You idiots! This is not 'using the thatched roof to borrow arrows', it is called 'doing one thing under the cover of another' (暗度陈仓). You never studied!"

4 construction workers go one way, and the rest go the other way. The first group start to knock on the walls, and Grandma Li's son and daughter-and-law come out protesting.

The workers and Boss Chen's cronies pull Grandma's Li son and daughter-in-law away from the building. There is an argument with much pushing and shoving. Meanwhile, two construction workers scale the house and start to cave in the roof. Grandma Li awakes and screams "Help!" but no one can hear.

Grandma Li gets out of bed and crawls for help. It is unclear if she is crawling to get out or crawling to get under the demolition (so that it will intentionally fall on her). The roof falls on top of Grandma Li. Her son rushed inside.

The workers say that even though they knocked in the side where Grandma Li was not staying, she intentionally crawled under the roof so it would fall on her. They run off.

Wo Ju (Woju) – Snail Space 蜗居, Episode 27

2010-04-30T10:02:00.000-07:00

The last scene from the previous episode repeats again. Secretary Song tells Boss Chen to pay off Grandma Li or solve the problem in order to be involved with the entrance of a Hong Kong businessman into Jiangzhou real estate. Boss Chen leaves.

Secretary Song calls Haizao and says they should eat together with Haiping and Su Chun in the apartment Haizao is living in. Song wants to be a part of the family. Song arrives and they start eating. Haiping and Su Chun are both awkward. Eventually, Su Chun confesses that he wants to quit his job and go into business for himself: opening an online bookstore for children's books. Song promises to introduce a classmate of his who is in the publishing business. Song leaves. Haiping is furious that Su Chun wants to quit and didn't tell her before.

Song tells one of his real estate friends that he needs to find a road out, and he will use Boss Chen's company as a shell for listing in Hong Kong. Without any [political] background, Boss Chen's company will not draw any attention. His friend asks him to explain but Song demurs, saying they will discuss it at dinner.

At dinner Song tells a story: "Once there was a place called America. There was an old man with three sons. The oldest and the second oldest were both working in the city. The youngest son and the man relied on each other to survive in the countryside. One day a man came and said, 'can I take your son into the city to work.' The old man said, 'No, absolutely not. Get out of here.' 'If I find a spouse for your son in the city, can I take him there?' The old man said still said, 'No, get out of here.' The man asked again, 'If the spouse I find for your daughter, your future daughter-in-law, is a daughter of Rockefeller, would that work?' The old man thought for a minute. In the end, the idea of his son being the son-in-law of Rockefeller moved him. He agreed. A few days later the man went to the magnate and oil king Rockefeller and said, 'I have a spouse for your daughter, will that work?' Rockefeller said, 'No, get out.' Then the man said, 'if the son-in-law I find for you is the vice-president of the World Bank, would that work?' Rockefeller agreed. Another few days later, the man went to the president of the World Bank and told him to appoint a vice-president. The president of the bank laughed, 'I already have so many vice-presidents, I cannot appoint another one, especially immediately.' The man said, 'If the vice-president is the son-in-law of Rockefeller, will that work?' The president agreed. So this young man immediately became the son-in-law of Rockefeller and the vice-president of the World Bank. This story tells us that the abilities of the young man are not important; what is crucial is how you gather the strings and build the bridge [work as a go between] and operate things. If he [Boss Chen] just shows up at the appropriate time. We will be the brothers and the father, and can ask him for whatever we want. We already have our Rockefeller who will build the bridge with strings. What we lack is a World Bank."

One of the friends at the table says: "Ok, my bank can do it. How much is needed?" Song holds up three fingers. "30 million, alright". "Add a zero," says Song. "Ah!?" Song says he is not alone in this project, and there is no risk. We need an asset form filled out with 300 million. Then, when the company lists, 300 million will become 3.5 billion. The bank's money will be returned." "Okay".

Boss Chen tells his works to frighten Grandma Li to get her out, as all the other households have left, and she is the last dingzi hu/

Wo Ju (Woju) – Snail Space 蜗居, Episode 26

2010-04-30T10:00:00.000-07:00

The scene from end of last episode repeats, with Su Chun going into his new office.

The general manager of the factory apologizes to him and says that they may need Su Chun to invite Mayor Zhang out for some events in the future. One of Su Chun's colleagues tells him that he heard Su Chun is the Mayor's wife's sister. Su Chun suspects that Haizao's lover, Secretary Song, is behind this, not Mark.

Haizao is bored. No one has time to eat with her and she has nothing to do: Song is working, Haiping is teaching Chinese, and Su Chun is being taken out to karaoke and banquets by his colleagues.

Song's wife and her friend have a long conversation about marriage, mistresses, and life. Song's wife knows he is back with Haizao.

Haizao starts to practice yoga.

Su Chun's colleagues ask him for a favor over dinner. They also give him a gold Buddha statue. They continue to drink and dine with him. He gets drunk and they take him to a massage parlor. When he awakes he runs out of the room.

Secretary Song calls Haizao and tells her to go look at apartments. If she likes them, he tells her to call him.

Haizao does not like the apartment because it is too far from her work and from Secretary Song.

Boss Chen comes to visit Song. Chen complains again about Grandma Li and her stubbornness in not leaving. He has done everything he could, knocked down all the surrounding buildings and even their roof, polluted water runs through the area, there are cockroaches, mice, and bugs. Song suggests that he give a little extra money to them. Chen says that he is in the business of making money, not losing it. A dozen square meter house demolished in exchange for an over 100 square meter apartment. Song says he must solve the problem, no matter what. There is a Hong Kong businessman who wants to enter Jiangzhou real estate, and it will involve Chen's company if he can finish the job.

Wo Ju (Woju) – Snail Space 蜗居, Episode 25

2010-04-27T17:07:00.000-07:00

The end of last episode is repeated after the restaurant name, South Beauty, is shown again.

Secretary Song's friend tells him that the real case involves a factory in Fujian Province that manufactures the same product as the one in Jiangzhou. They are asking for help from Song in order to join the two factories together so that they both profit, in which case the Su Chun issue would be meaningless. Song promises to look into the issue.

The executive from the ship-building factory makes a call and demands that the case against Su Chun be dropped immediately.

One Month Later

Su Chun receives a notice that the case against him has been dropped. Then a top executive from the factory comes to tell him that they have joined with the Fujian factory, and to thank Su Chun. He is dumbfounded.

Young Bei takes Haizao's mobile phone to find Su Chun's number and sees a text message from Secretary Song. He is angry, tells Haizao he wants to break up, and strangles her. After releasing her, he leaves.

He returns the next day to get his things and move out.

Haizao goes to Secretary Song's office and waits by his car. When he leaves work, he sees her crying. They drive off.

Secretary Song tells Haizao that he helped Su Chun with his case. Haizao says she accepts her fate and will return to Song's side.

Song tells Haizao to live in the apartment he lent to Haiping and Su Chun. He says that soon they can go look for housing and buy one.

The next morning outside the apartment complex, two people in a car write down in a notebook the department of Song.

At Grandma Li's house, she is still lying in bed. Her daughter-in-law tries to get her to move around. Grandma Li says she wants to die. The daughter-in-law says she can't die because it would be worth anything. Grandma Li says: "Oh, so my life is only worth a hukou".

The head of investigative unit goes to the leader, named Secretary Sun. Sun says to keep waiting to see what their overall scheme is before they act.

Su Chun is congratulated by his colleagues at work. He gets a new office.

Wo Ju (Woju) – Snail Space 蜗居, Episode 24

2010-04-27T17:06:00.000-07:00

Haiping goes to the police station. They ask her about the blueprints that Su Chun drew, and whether he gave her money. She says nothing. The police say they are giving Su Chun an opportunity for a light sentence, and that her lack of cooperation will hurt him. She remains silent. The police leave the room.

A group walks into the Jiangzhou City Planning Showroom. Secretary Song is among them. He calls Mark (the foreigner Haiping is teaching) to ask about something, and Mark tells him about Haiping and Su Chun.

After Haiping leaves, the police talk about the case. Su Chun has confessed, but they lack other evidence. In particular, they can't find the 50,000 yuan that Su Chun took since it was not deposited in the bank.

Song asks his friend to look into the case -- "to see how deep the water is, so I will know from where to engage the issue". 24 million yuan is the claimed loss, but they only gave Su Chun 5,000 yuan a month in wages. The annual income of the entire output of the company is only 35 million. The company is a ship-building factory. Song’s friend tell him that if he is unfriendly with the man, he can help Su Chun get a light sentence; if he is friendly with the man, he will have to use his guanxi to get the company to withdraw its case. Since no indictment has been made, this will end the case and the involvement of the police.

Haiping goes to her lawyer but he says that the case has been taken over by one of the best lawyers in the city. Haiping is puzzled and calls Haizao. Haizao knows nothing about it.

Mark claims that he helped Haiping. She is very happy.

Su Chun is released from jail. He is at home waiting from Haiping, who is walking home with Mark. Haiping is ecstatic to see Su Chun when she arrives home.

As Secretary Song and the lawyer are leaving, someone is taking photos from the second floor.

Song meets with the right hand man of the ship building factory boss. He asks to have the case ended. The man agrees, but says there will be questions from above and the law may still move forward without them. He then leaves.

Wo Ju (Woju) – Snail Space 蜗居, Episode 23

2010-04-27T17:05:00.000-07:00

Haiping waits in the office. She meets the manager and asks if something happened to Su Chun. He says yes, and that Su Chun is suspected of selling company secrets.

Su Chun has been arrested and is in jail. Haiping goes to the police station. The officer says they are interrogating Su Chun and that Haiping should get a lawyer.

Haiping calls Haizao, who is back at her company. They search the newspaper and online for a lawyer. Haizao calls Young Bei, whose friend knows a lawyer that has experience with economic cases.

Grandma Li's son says he can't live any longer in the house. He wants to take the few hundred thousand yuan and live out his life. Grandma Li admonishes him, and says that in the 1980s, someone with 10,000 yuan was well-off. But now it is nothing. The son’s wife agrees: "We must get an apartment -- they keep their value".

The lawyer tells Haiping that the case involves over 10 million yuan so there is a possibility of more than 3 years in jail. She goes to try and raise 100,000 yuan for bail money. She calls Haizao; Haizao has the money.

The police call and ask Haiping to come to the station for questioning.

Wo Ju (Woju) – Snail Space 蜗居, Episode 22

2010-04-27T17:03:00.000-07:00

*Apologies for not posting but my access has been limited*

Secretary Song's wife proposes divorce. He rejects her offer. She sobs.

Haizao says to Young Bei that they should break up. They both cry.

The scene changes to Song's wife crying. Song, like Young Bei, asks for forgiveness.

Secretary Song and Boss Chen go to visit Grandma Li. Song introduces himself as the developer of the property. Grandma Li sizes him up and says he is not a developer, but a government official. He smells not of money but of power.

Haiping gets another job teaching a foreign student after her Japanese student scores very highly on a test. She happily tells Su Chun.

Haizao and Young Bei are still together and happy.

Secretary Song is at dinner with two others (they are eating at South Beauty 俏江南, a relatively expensive restaurant in Shanghai). The larger one asks the other if the price of real estate in Jiangzhou (Shanghai) will still increase. "It will". "I am silly for asking. This land was bought by you, and the housing was built by one. Half of the city belongs to you. Of course you hope prices increase". Song says he is poor and never cares if prices increase or not. The large man replies that buying property is way to stave off inflation.

Song: "That will be difficult (to stave off inflation by buying property). The price of real estate is the result of governmental factors. Look at Jiangzhou (Shanghai). Every day hot money is flowing into the city. Then look at the area of Xujiawan (an obvious reference to Xujiahui area of Shanghai): how many new banks appear there every day, and how much stored in them is from outside? And this is only what you can see. There is more that you cannot see. If one day all this money leaves, ha! Look at Tokyo and Seoul. It's been over a decade and they haven't recovered. If at that time you apartment is still valuable and worth a lot, there will be no ordinary people who can afford it. No one will take it off your hands. And you will have to pay property tax and other assorted taxes. Perhaps in the end your asset will become a burden (资产变成负担)."

Will there be a property tax? There must be, to police you heartless rich people.

The other man says he has three parcels of land that he is sitting on. If he develops them early and sells them, he will miss out on profits. Song says that making some profit is better than losing money. They drink.

Haizao goes to her company to quit her job. Boss Chen tells her to wait and talk with him, then he calls Secretary Song. Song is in an important meeting, but he leaves. He meets Haizao as she is walking out of the company, takes her things, and leads her away to talk. She cries.

A triple screen appears: in the bottom left, Haizao and Song are together; above that, Young Bei skips happily into work; and to the right is Song's wife and daughter walking along the street. As Haizao gets into the car with Song, the other two screens fade out and the remaining one enlarges. Song drives off.

Haizao and Song have coffee. He gets a call and must leave. As he is leaving, his photo is taken.

[Funny note: when Haizao is sitting at the coffee table, she gets a text message. She opens her phone and it is branded "Coogle" -- with a C instead of a G. A clear instance of shanzhai (see my earlier post from last year).]

That night, Su Chun does not return home. Haiping is very nervous and goes to his workplace but does not find him.

Wo Ju (Woju) – Snail Space 蜗居, Episode 21

2010-03-29T21:26:00.000-07:00

A new house -- a large, multi-family one, similar to the one from the longtang -- appears and Haiping and Su Chun are living there now. Haiping is trying to find a job but is unsuccessful. Su Chun suggests that instead of studying for three years Haiping should open an online store and sell things from her home.

In a club, Boss Chen and Secretary Song are sitting and drinking wine. Song tells Chen to continue paying Haizao her salary, even though she doesn't come to work, until she quits.

Haiping calls Secretary Song and asks to meet him. He agrees.

Interesting moment in a coffee shop: Song's wife and her friend are out to enjoy themselves a little. Song's wife asks for a drink menu but is told that there isn't one, and that they must order from the counter. The friend says: "For once we go out for some pizazz and we suddenly we are like peasants entering the city" [i.e. they don't know how to behave or the procedures for things]. Song's wife is spending money and treating herself because of Song's affair. Her friend tells her to divorce, but Song's wife says that is not a possibility, since she is over 40, not beautiful, and divorced so no one will want her. They rush off the pick up their children for extra classes.

Haiping returns the visa card and house key to Secretary Song. He leaves.

Young Bei says he and Haizao should get married. Haizao tells Haiping, who says she shouldn't get married just to make up for mistakes in the past.

The investigation team discovers that the apartment Haiping and Su Chun were living in, and the villa where Song and Haizao had trysts, are owned by the same person: Boss Chen. The team says Chen has no background, so there is suspicion about him. They plan to investigate all the projects of his company.

Boss Chen calls Song and says the dingzi hu are more difficult to move than Mount Tai. Chen goes to Song's office. Song has looked into the background of Grandma Li: her grandfather owned the street that they are demolishing but then his relatives moved in from the countryside and didn't return the housing after [1949] Liberation. Song says he will go meet her.

Haizao tells Young Bei they should wait to get married and he is infuriated, chasing her into the bathroom. Then he apologizes.

Wo Ju (Woju) – Snail Space 蜗居, Episode 20

2010-03-24T23:05:00.000-07:00

Haiping is arguing with Su Chun about her argument with her Japanese students mother. Su Chun says, "You are really someone who likes to eat salty turnips and worries about blandness (咸吃萝卜淡操心) [salty and bland are antonyms, so the phrase is binary contradiction between "salty people" and "bland people"; it means someone who sticks their noses into things that don't concern them and that they don’t really understand]." Su Chun says they have enough money for the end of the year, but when it comes time to pay back their loan, it will be tough (悬).

Young Bei forgives Haizao and agrees to get back together with her. While he is speaking, the doll that Secretary Song gave Haizao is in the background.

Haizao asks Haiping to return a platinum Visa card to Secretary Song. Haizao is afraid to meet him, so Haiping says that Haizao's feelings for Song are still strong.

Haiping tells her mother to take Ran Ran and go back home since she will have to move out (the apartment was given to her to use by Song's friend). Haizao also wants to move.

Haiping stands in front of Hanyu Property (a intermediary real estate company). She looks at papers and through the window at properties posted. She looks melancholy.

Young Bei is cold to Haizao. She remembers their good times together and is sad.

Ran Ran tells Haiping that she doesn't want to separate from her.

One Month Later

Young Bei and Haizao are moving into a new apartment. Later, after losing a computer game, Young Bei smashes his mouse. Haizao asks him what is wrong. He stares at her then grabs her, throwing her on the bed, then chasing her down the hall and strangling her. He screams in anguish.

Haizai is in bed, with her clothes tossed on the floor. She looks hurt, physically and emotionally. Her neck is bruised and she attempts to hide it by applying cream.

Narrator: "Now, the one who is depressed is Haizao."

Wo Ju (Woju) – Snail Space 蜗居, Episode 19

2010-03-24T00:02:00.000-07:00

Secretary Song picks up Haizao and is followed by a Taxi. He drags her up the stairs of his villa with her fighting him. Haizao screams for Song to release her. He says, "You have a lover, you want to get married. Playing a game (逢场作戏), I will do it to you in spite." Song rips off her clothes. Haizao sobs, "Why did she [Song's wife] have to talk to me that way?" Song holds her and says he is wrong and will always protect her.

Song and Haizao get into the car to leave. It is raining. Song turns on the headlights and Young Bei is standing in front of the car. The internal car lights are on as Haizao stares at Young Bei. Young Bei is crying; he runs off. Haizao tries to follow him but Song stops her.

Young Bei flashes back to all his happy moments with Haizao. He screams in agony.

Song takes Haizao to look for Young Bei. They go to Haiping's apartment and bang on the door, waking Haiping and Su Chun. Song drops Haizao off and says anything should be left for the next day.

Haizao tells Haiping, who talks to Su Chun. Both Haiping and Su Chun ask, "Did he [Young Bei] block the bed? (给堵床上了)" [appears to mean "find them in bed", netizens (in China) find this phrasing quite interesting.] Su Chun convinces Haiping not to call all Young Bei's friends and colleagues since this would let them all know that Young Bei had been disgraced, and he would have no face -- and perhaps really commit suicide.

At dawn, Young Bei is seen sitting by the banks of the Yangzi (Huangpu), staring at Lujiazui. A song about betrayal is heard. He returns home and sees Haizao. He faints.

Young Bei is sick. Haizao buys him medicine and stays with him. He says, "I am fine". Haizao packs her bags.

Coward: These Colours Don't Run

2010-03-23T08:22:00.000-07:00

More Woju, Wo Ju, 蜗居 is coming. I have done 6 episodes in last two days.

Slant: First report this morning was that Google had pulled its search site from China, instead directing users to Hong Kong Google (which is uncensored, like the USA version, which isn't blocked either).

Second, news reports from U.K. and USA reported: "Google stops censoring (i.e. quits) in China" [their search engine is gone, so they are not here anymore and hence cannot stop or start censoring].

Third, Google.com is blocked in China (around 5 pm in Shanghai). I think it is the end.

It is not. An hour later, back to usual.

Fourth, Bush or Obama, united we stand. And we don't stand down. Google is a coward. A little insurrection and the punch bowl is tipped? Very "French", Google. My distaste is visceral. So arrogant, so correct. Is there not a republic in China? Is there no sympathy for Internet geeks who love Google in China (not "white collars and professionals" as Western market research and Keith Bradsher and David Barboza (new and old China hacks) would have it).

I just lost a bet that American society was more fair. Nevertheless, despite Google, our colors don't run.

Wo Ju (Woju) – Snail Space 蜗居, Episode 18

2010-03-12T05:38:00.000-08:00

The scene continues from the last episode with Haizao's phone ringing while she is in the shower. It is Young Bei and Secretary Song answers it. He hands the phone to Haizao, who is lying in the tub. Haizao says she is alone, not knowing that Song had answered. A firecracker explodes overhead as Young Bei says he loves Haizao.

Song says that Haizao is his woman, that her first time was his. So he wants her to end the relationships with Young Bei. Haizao is puzzled by this [a strange fact fact about the series Woju is that Haizao sometimes has a voice, sometimes her feelings are narrated by a male]. Song: "I took your first time. But I treasure it like a pearl." Haizao holds him and says nothing.

Haizao and Secretary Song leave the hotel. The host calls the investigator and says he has found an opening: "A woman."

Boss Chen calls Secretary Song to thank him for the Red Star real estate advice -- they (in Wuxi) gave him a deal without him even travelling there. Song tells him to complete the deal with Hong Kong even if it is a loss, and wait on Red Star.

Song returns home and his wife is upset. One of Song's classmates told her about Song having a woman with him at the reunion. Song's wife cries. Song says that his relationship with the woman (Haizao) is "逢场作戏" (playing a game in a chance location, repeated twice in this episode -- the opposite of what "Fatty" told the investigator when Song and Haizao left the reunion). Song's wife says, "After so many days, you have no interest in me." She tries to pull away but Song forces himself on her -- she stares off into the distance as he is on top of her.

Song's wife comes to Haizao's office, and asks her to come outside. They go for coffee. Song's wife: "You are for appearances-sake. There will be no result. He is playing a game with you" (during this scene, Haizao's narrates her thoughts in her own voice, after last sentence violin is dramatic). Song’s wife continues: "I advise you one thing: don't use up your youth (青春) to bet on tomorrow. He will give you nothing. In the end, you will lose. I have everything: a husband who loves me, a beautiful daughter, social respect and position. I feel sorry for you. I hope when you are my age you have what I have, and not like a mouse putting away every crumb. And that after your husband knows your history, he will still treat you like his baby". Song's wife leaves.

Haiping arrives and Haizao is sobbing. As Haiping and Song's wife cross paths, someone is taking photographs.

Song confronts his wife. She tells him that Haizao is "playing a game with him" (逢场作戏, repeated for the 4th or 5th time this episode).

The investigator pastes Haiping's picture on the white board and says this is certainly not a case of "someone playing with someone" (same phrase, again). This is our opening.

Wo Ju (Woju) – Snail Space 蜗居, Episode 17

2010-03-09T05:05:00.000-08:00

In the longtang, Grandma Li's electricity has gone out. They plan ways to eat and wash without water, electricity, or gas -- "no matter what, this is better when we were at war with the Japanese," comments Grandma Li.

The demolition team is hammering away at the walls. Boss Chen says he can't believe that the family (Grandma Li's) is still there. The dust will cause them to be kill: "is money more important than life" Chen asks rhetorically.

Haiping and Su Chun are happily preparing for the arrival of Ran Ran, with new clothes and a performance for her. Haiping gets up early to runs out excitedly to meet her parents and Ran Ran at the train station. She calls, and wakes up, Haizao and tells her to hurry.

Su Chun and Young Bei are at home awaiting the arrival of Haiping, Haizao, their parents and Ran Ran. They are in aprons and cooking food: "How the world has changed," says Young Bei.

Haiping wants Ran Ran to sleep with her but she refuses, and wants to sleep with her Grandma.

Grandma Li and her son are lighting candles in their house. Grandma Li says she will bring her grandson home the next day, since she is doing all this for the good of his "marriage apartment" (婚房). Later, they are looking for a bed sheet on which to write characters in order to protest the demolition. They can't find an old bed sheet in the dark so they will wait. Grandma Li remembers that there is one on top of a cabinet. She stands on a stool to reach it but falls.

Grandma Li has broken her hip and is lying in bed while outside demolition continues. Her daughter in law complains about having to bathe her with water that has to be carried in. "I wish I was dead and it was over," moans Grandma Li. No, says he son, because then they would be one less hukou so compensation for relocation would be even less. "Once we get a new apartment, then you can die".

Boss Chen asks how many families have not moved, and the answer is three. After hearing that one of the old ladies (Grandma Li) had broken her hip, and since it was near New Year, Boss Chen says they can put in a water sprout. Then Chen sees a man putting up a banner of protest and regrets feeling sorry for them.

Secretary Song walks into his office and tosses a newspaper on his desk. The title of the article reads "The Most Stubborn Nail Household" (最牛钉子户). He calls Boss Chen and tells him to come to his office immediately. Song tells Chen to arrange for the households for the new year, and that after the new year they will discuss the matter.

A new character appears (it could be the investigator). He passes out documents to a table of people and apologizes for making them work so close to the new year. He announces the official start of the special investigation team's work on a case. He unveils a white paper with photos and lines -- at the center is a picture of Secretary Song. "He is our target, Song Siming", says the lead investigator.

Next scene is of Secretary Song and his family at the airport.

Boss Chen comes to plead with Grandma Li. He says he will return home, and will lend his apartment to Grandma Li. After the new year, they can continue negotiations.

Grandma Li: "Neither gold nest nor silver nest are as nice as one's own dog nest (金窝、银窝，不如自己的狗窝, the "nest" or wo character is same as that in the title "Woju"). Chinese people don’t go to other people's home for the new year. I will stay here. Don't worry about me. Instead, think about how you can relocate us. Wouldn’t giving up one more apartment solve everything? The earlier you give it, the earlier we move." She groans.

Boss Chen leaves. Grandma Li says they can't accept his offer because it will be hard to negotiate with him in they are friends. Her grandson complains that he doesn’t want to stay in the house, and Grandma Li is angry, saying that she and her son and daughter have fought for this to help the grandson out in later life.

Secretary Song is in a massive mansion with his family, including his father. They sit down to eat.

Haizao is going to spend time with Secretary Song so Haiping insists on meeting Song. Haizao gets into the car with Song and they leave.

At the 20th reunion, one of Song's classmates says Haizao looks like someone. Later, he remembers that she looks exactly like an old college classmate “little white bunny”.

Wo Ju – Snail Space 蜗居, Episode 16

2010-03-04T08:51:00.000-08:00

The scene from the end of last episode repeats, with Haiping saying she will quit. Haiping says it is all Su Chun's fault, that she has to work outside the home and be picked on by others. Su Chun says yes, she is right. But it is still a job. The old saying is still right: "If this place doesn't give milk, there is a place (for me) where milk is given" (implies that if a place does not welcome you, you have your own place that does; 此处不留奶自有留奶处). Su Chun tells her not to be angry and she laughs. Su Chun gives her another envelope that he got from drawing blueprints.

Haiping learns that she has been assigned to a desk next to the toilet, and will not be given any work. She daydreams of smashing a vase over her manager's head. She returns home crying.

Grandma Li's neighbors comes to tell her that they are leaving. She says if she could afford the amount that they are paying, she would leave to. She returns to the shikumen

The demolition team is talking and they say Grandma Li is only home left, so they should give her a little extra subsidy. Another responds that they have already given her extra, but that she wants to turn her toilet-house into a golden phoenix.

Haizao comforts Haiping. Haizao says she will take of this issue, and that Haiping should stay home.

Young Bei calls Haizao and says the Haiping should just take it, and not let it interfere with her new year. Haizao hangs up on him. Secretary Song then calls, and instructs Haizao to tell him the whole situation so he can help her analyze it. She tells him about Haiping's company will not give her the several thousand yuan in bonus that is owed her. He laughs and says it is not worth. Haizao is upset, so Song says that Haiping should go to a hospital and have them write out a diagnosis for an illness that will require her to stay away from work for two months. The company would not dare to not pay her the money with this. She can also charge the company for massive medical bills.

The next scene is Haiping walking into the manager's office with her medical certifications and dropping them on the manager's desk. She says he should remember to let her know when bonuses are ready (he can't fire her while she is on sick leave).

Song's wife complains that he doesn't spend any money on housing, on furnishings, or on clothes. He says they have to be careful because of his position. His wife reminds him that their daughter's grades are poor, and he says he knows and has thought about it.

In bed, Song's wife says that Boss Chen has again given money to Song's brother, and he doesn't know what to do with it. Song says he will call him the next day. After they turn out the light, Song's wife says it has been 1-2 months since they have done it. Song says he is tired, and next time she should make an appointment. Perhaps Saturday? You are not a specialist doctor, just forget it.

Haiping is happy that Haizao helped her. They talk about the arrangement with Song will not last long. Then, Haiping gets a call from her manager to come in to you. She goes in, and they pay her the money, so she signs the agreement to quit.

Boss Chen comes to visit Secretary Song. Song tells him to come back on the eight day after new year because there is a Hong Kong businessman who will be in town. Chen asks about the benefits. Song says that you can't always be worried about the benefits. Sometimes when you do ten things right, the other nine have no big reward, but the one will be enough for you to live off for the rest of your life.

Haiping tells Su Chun that on Sunday she and Haizao will go to the train station to pick up her parents and Ran Ran. So he and Young Bei will have to make dinner. Su Chun is upset that he will have to lie to Young Bei about Haizao, but Haiping tells him to get over it.

Wo Ju – Snail Space 蜗居, Episode 15

2010-03-03T08:07:00.000-08:00

Haizao, Boss Chen, and Secretary Song leave the restaurant. Boss Chen drives them back.

Haiping gets a new student -- the son of a Japanese woman living in Mark's building. Back at home, Su Chun arrives and gives Haiping an envelope of money that he earned from creating a blueprint for a Fujian person he meet in a work meeting. Haiping stays up late preparing to teach the child.

The demolition crew comes to talk to Grandma Li. They say that the demolition will start, and dust will be everywhere, so she should worry about getting ill. Grandmi Li says it is not that she doesn't want to move, but that they are no giving her a place to move to. "If I had in my hands a three bedroom, one living room apartment, I would run from here faster than you. You give me an apartment, but I don't have the money to pay for it; you give me money, but I can't afford to buy an apartment. What can I do?" She laughs as the director of the residents committee leaves in disgust.

We meet two new people in a large office. They are both wearing suits. The one behind the desk is older, and he is reading a report from the younger one. They are talking about the shikumen that Grandma Li and formerly Haiping and Su Chun lived in, and how it was sold at such a low price to the real estate company owned by Boss Zhang. The older man orders the younger man to start an investigation, but to keep it secret until there is enough proof.

Haiping is declines to work overtime to her boss, again, for the umpteenth time, saying she must go home to make food for her sister (actually she is teaching). Her boss is unhappy, and says you can't hire 30 year old women, since they are busy with their lives and should stay at home.

Haiping returns to the office after the Chinese lesson with the Japanese child, who knows very little reading and writing. She works until late, and there are no more buses. So she decides to stay at the office. After Su Chun tells her she must return, despite the 50 yuan fee for a taxi, she goes back home.

Haiping tries to give 10,000 yuan to Haizao to pay back the loan, but she refuses. Su Chun comes in and says there is a property management fee of 2,200 yuan that must be paid that month. Haizao says Haiping should stay in the apartment and pay the property management fee with the money she is trying to return.

Someone (possible the young investigator) meets with a man and tells him to have classmate reunion. Next, the man appears at Secretary Song's workplace and tells him the classmate reunion in the new year will be at a resort in the countryside, and that Song should bring a partner since everyone else is divorced and they all bring someone (Song always "attends the meeting with a single knife", 单刀赴会). He agrees.

Haizao gets a call from Secretary Song who says he has two hours and he wants her. Afterwards, Song is getting dressed and Haizao asks about the 2,200 yuan fee for property management, and if her parents and Ran Ran can live in the apartment for new year's. Song says the fees will be paid, and that it is fine for the parents to come, but he needs Haizao to come with him to the countryside for 3 days during new year. She agrees.

Haiping gets in another fight with her manager about coming in on Saturday, especially so close to new year. She says she does all her work in the allotted time, and this is a socialist country, she will complain to the Women's Federation. The Japanese boss says the manager should put her in the back and not give her any work.

Haiping comes home to Su Chun and she wants to quit.

Wo Ju – Snail Space 蜗居, Episode 14

2010-03-01T23:57:00.000-08:00

City scenes of Xujiahui, one of the largest and most peopled shopping areas in Shanghai. Haizao is browsing in what appears to be Ganghui (Grand Gateway, the most luxurious mall in the area). She buys underwear and coats without thinking. She exits from Pacific Department Store and hops into a taxi.

Haizao visits Haiping and gives her a coat and clothes. Haiping asks who Mr. Song is, and Haizao tells her the truth. Haizao says she is young, and has time for passion and to devour. She doesn't envy Haiping. Haiping lectures her on not being alone when she is old, and that she will meet with misfortune.

Haizao is going to Suzhou to solve a problem with a project. A mistake (on the part of Haizao's company) near the end of the project has caused the client to not pay, and say that they will sue. Boss Chen has confiscated their keys and does not want to meet them for the moment. Haizao's duty is to meet with them and see if she can make progress.

Haizao arrives in Suzhou. She walks around the city and has a meal by herself. When she returns to her hotel, Secretary Song calls her and they flirt over the phone. While she is on the phone, there is a knock at the door. It is Song, but he pretends to abduct her so she screams "help".

The next morning Song sees the new clothes that Haizao has bought and is pleased. He "clothes have a price but youth is priceless". He sees that Haizao will leave so he says he will go with her, since this "bumpkin lass" (小丫头) will never get anything done.

In the meeting room of "Red Star Properties": The man throws done the project packet, "This is what your company has done. Tell your boss I am tearing down the building and finding someone else to redo it." Haizao asks what they can do to solve the problem. "Your behavior is that of a dishonest company (奸商), a fraud. Your company has damaged our reputation and credibility. You want to know what I want? Demolish the entire building and rebuild it." Haizao points out that the interior decoration of the building is already complete, so it doesn't make sense to demolish everything. [We see that Secretary Song is sitting next to Haizao]. The female member of red star speaks, "Who asked you to do this? You think because you get everything done in a hurry we will not object? We will not allow this type of dishonest company behavior. Tell your boss we will see him in court." Song says they will talk to the boss and return in the afternoon.

Song analyzes the project documents. He says that most of the problems are not major, "the demolition of the railing, pollution, surrounding environment, the lack of greenery by 0.1%, verticality off by 0.3% -- these errors are all within acceptable limits. But you are vulnerable on one point, and that is that your boss arbitrarily made the top of the building flat. That is completed different from the blueprint."

Haizao: "Yes. Boss Chen said that he talked to their boss about this and he agreed. They even went out drinking afterwards. But that boss left the company and the new boss has pointed at this as a major problem." Song: "The problem is not major. Money can solve this problem."

Haizao: "But we have sent many people to them to negotiate a monetary settlement, but they will not talk about money. They say we have affected their reputation, and there is irreparable damage that has been done. So we can't make progress on this."

Song asks if Haizao's knows the boss of the company. She gives him the materials, saying that their corporation is very large. Song chuckles as he looks at the materials on the boss. Song says he must go outside and make a phone call. He then takes Haizao to take some photos at scenic areas.

Haizao says: I am on a business trip, not travel. What will I say to Boss Chen. "I am here, what are you afraid of?" says Song [premonition: what will happen if Song is not there? Will Haizao be fired?]

Haiping's boss asks her to put in overtime again, but she says she can't on Mondays, Wednesdays, or Fridays, because she is taking classes to catch up with the new waves of college graduates. We learn her company is a Japan-invested enterprise.

Young Bei calls to tell Haizao that he thinks Haiping has another man. He says he loves her.

The next morning. Haizao and Secretary Song are sitting in the room. Song gets a call. He asks how much, then says no problem. He hangs up and tells Haizao to call Boss Chen and tell him to bring the keys in the afternoon. Haizao says they are still owed 2 million yuan. She calls Boss Chen, and Song takes the phone from her. He tells Boss Chen to take the settlement, against Boss Chen's objections. Song instructs him to finish the deal. He adds that Boss Chen shouldn't be rude to his woman (meaning Haizao).

Haizao thanks Song for his help (by saying she likes his thingy). He tells her that everything can be negotiated in this world. The crux is to find the key that unlocks the door to communication between two parties. But he is not a businessman. Businessmen exchange goods for money, and money for goods. It is a one-way street. He is an overpass. He tells Haizao just to be happy. As for the rest, he will take care of it.

Wo Ju – Snail Space 蜗居, Episode 13

2010-03-01T04:51:00.000-08:00

The same scene is repeated. Haiping is furious with Haizao for accepting this much help, and from a man. If Young Bei knew. Haizao says she isn't married to Young Bei, and he is just an ordinary friend. Haiping tells her to treasure love. Haizao asks Haiping if she treasures her feelings with Su Chun, and if this is the life she wanted. Haiping is flustered, and Haizao leaves her and key and storms out.

The apartment is in a beautiful xiaoqu apartment complex. There is green grass, art sculptures, and a playground. The buildings are very tall. Haiping and Su Chun wonder around amazed. The apartment is gorgeous, with wood flooring and finishing, as well as vases and flowers. Su Chun comments that the apartment is worth 5 million yuan.

Su Chun is uneasy about living in someone else's apartment, but Haiping says she has no choice but to accept Haizao's gift. She also wants to invite her parents and Ran Ran to visit for two days. There is a warm-water swimming pool, library, and entertainment area, so Ran Ran won't break things in the apartment. We will move after Spring Festival, after New Year's we move out.

Secretary Song playfully chases Haizao up the stairs. Then seductively undresses while looking at Secertary Song. Song grins. Haizao's life is irregular, and can be described by the title of a book: "Half is Ocean, Half is Flame" [A famous novel by author Wang Shuo, Chinese name is 《一半是海水一半是火焰》, English name given to movie is "Ocean Flame". It was been made into a movie in1989, with significant influence. You can watch here in Chinese. Please note this links works today, and is understood to be legitimate as posted on Youku. I will not update the link if it goes bad -- Trans.] Song would sometimes not call her for a long time, then suddenly say passionate things.

The screen breaks into three, as happened in an earlier episode. The right screen continues Haizao's strip tease, and her naked finger beckons Song. The left side is Young Bei working hard to prepare a meal, and below that Song's wife opening a safe and putting money in it.

Haizao liked getting love without putting anything into it. Young Bei would always be love with too many feelings.

A sultry maiden in a club bar one day, and cooking in the kitchen the next, she felt a double personality like Gregory Peck as Dr. Edward [reference to Albert Hitchcock's Spellbound]. Before, she found it difficult to be a slut; but now, she and Secretary Song had solidified their roles. Scene is of Song passionately kissing her neck.

A scene in Song's house. First, he objects his wife not closing the bathroom door as she sits on the toiler. The next morning, she asks him to help her with a girdle; "you are not a 20 year old; growing old together, neither one notices," comments Song. That night, he tries to be amorous, but as he kisses his wife, she remembers that Ting Ting, their daughter, has an exam the next morning and she doesn’t know where she put the booklet. Song sleeps.

Song gives Haizao money for clothes and she takes it.

Su Chun and Haiping are moving. Su Chun wants to throw everything away but Haiping says everything costs money, and there are sentimental things too -- like the underwear she wore to visit Ran Ran -- that she wants to save.

Haizao and Young Bei go to Yonghe Soybean Milk to eat. [This is a popular chain restaurant, and given the attention to detail of the place, it is most likely a product placement]. Their food has just arrived and a child yells that they are almost done. Her mother comes over and stands behind Young Bei -- it is Secretary Song's wife, and daughter Ting Ting. Haizao and Young Bei look at each other. Then Secretary Song comes over. Haizao pulls Young Bei away and they leave quickly.

Haiping gets paid by Mark for all her help in teaching him. She is happy with a big envelop full of money. She learns that Mark is friends with Song, a man she doesn't know.

Haiping and Su Chun will move on Saturday.

Secretary Song asks for a weekend with Haizao, but she says she must go to Wuxi on business, and that Song should spend his time with his wife and child. Song then calls Boss Chen and asks where Haizao is staying in Wuxi.

As Haizao is getting ready to leave the office, she notices the envelope of money that Song gave her. It is almost exactly the same as the envelope that Haiping got from mark [symbolically]. She can't deposit it, otherwise Young Bei will know. She was going to return it to Song, but after seeing him with his wife and child, she wants some revenge. The best solution: Spend it as quickly as possible.

Wo Ju – Snail Space 蜗居, Episode 12

2010-02-25T15:10:00.000-08:00

Young Bei gleefully comes home and takes off his pants and turns off the light. Haizao says she is reading, and spurns him. She feels grimy like a toothbrush that had been used by two people. Haizao is reading a book called Hearbeat, by Nora Ephron [There is no such book in English or Chinese. However the title, 《心动》, is the title of a work of fiction by author Hai Cheng. Perhaps the connection is there. Also, the Chinese characters used to write "Ephron" are different from the typical way: compare 伊弗龙 and 艾佛朗 as very similar transliterations of Ephron; the one used in "Wo Ju" (i.e. the latter) is more typical of "Efron"; the name Nora is the same in both. Might just be error.]. Young Bei sleeps and Haizao flashes back to Secretary Song kissing her on the floor. [From the language, she was clearly not a virgin before her encounter/rape by Song, so the blood came from his violence].

Su Chun returns home and finds the 60,000 yuan. He thinks it is not right and Haiping should ask Haizao about where she borrowed. Haiping says that not everyone is like him with poor friends.

Su Chun wants to return the money, but his colleague is unhappy since they had an agreement.

Haiping picks out a special outfit and goes to meet the foreigner. "Delicious, food, money". They only speak English. The foreigner's name is Mark, a (white) American with a beard [he is a news presenter from CCTV channel 9, and speaks Chinese with a thick accent]. Haiping claims to have learned new English phrases.

Haizao flashes back to Secretary Song again, but this time she remembers him saying that he wants to help her, that he cares about her. Does she want call him to thank him for her sister, or for her own reasons. Haizao accepts Song's invitation to meet the next night.

Haizao is walking on the street with Young Bei, thinking about how Haiping is getting kicked out of her apartment for demolition. She says she will go to an intermediary, 中介 [there are literally thousands of these in Shanghai, and they compete fiercely, even violently, for business. Their front windows are papered with ads for sale and rent in the nearby area]. Standing in front of a window for an intermediary, they see signs for 1800, 2000, and 2500 yuan per month. Too expensive. They leave.

Secretary Song doesn't call Haizao, but eventually he does. He tells her to come to his office, since he needs to finish something right away. She arrives and tells him about Haiping not having a place to live, and looking for rentals. Song says that the area they are looking in is too far from Mark, the foreigner, so there will be no bus at night. Song offers to lend an apartment to Haiping for a short period, and he hands her the key. Song says: "Of course, you don’t get love with money, but many of the roads that lead to love are material."

Song takes Haizao to a restaurant that looks like someone's house. It has no sign on the door, and customers are only people have been introduced to it. The food is extravagant, and Haizao loves it. She says it is the first time she has even gotten full at the banquet table.

In a different scene, Su Chun's colleague returns the money to his aunt, who stares at the envelope since it has a small, strange drawing on it [remember, the money came from Haizao, who got it from Secretary Song. Foreshadowing dire events, no doubt].

Haizao leaves the restaurant with Secretary Song and says "Goodnight [in English]". He grabs her forcefully by the wrist and says her night is too short, and his is just starting. He drives to the place he took her before, a private townhouse residence. She feels trapped and unable to flee. He takes her to the bedroom and takes off her clothes. He asks her to look at him but Haizao refuses.

Secretary Song returns home. It turns out his wife is the aunt of Su Chun's colleague. She says the mark on the envelope was one that she drew herself. Song says the world is small.

The scene changes back to Grandma Li in the longtang. They are talking about the grandson who never comes back to visit. Grandma Li says, "the entire hopes of this family in this house. In the rest of our lives, will we drink water or drink soup? We’ll what comes of this gamble."

The episode ends with Haizao giving Haiping the key to the apartment of Secretary Song's friend.

Wo Ju – Snail Space 蜗居, Episode 11

2010-02-24T10:44:00.000-08:00

Haiping pulls out a book and dusts it off -- it is an book on English.

Haizao gets call from Secretary Song, who says the English lessons will start next month. Haizao tries to invite Song out on Christmas Eve, but he says he doesn't celebrate, and is busy.

Haizao tries to get Young Bei to go with her to a movie on Christmas Eve, but he prefers to buy counterfeit and watch it in bed. She rejects his ideas and says she will visit her sister, Haiping.

Haizao surprises Haiping, who is studying English. Haiping has nothing to eat except dried and instant noodles, so Haizao criticizes her for endangering her health. Su Chun is not there, and they are still apart. Haizao is wearing a fashionable scarf while Haiping is wearing a jacket from the planned economy days.

Secretary Song and Developer Zhang are having wine in a club with jazz playing in the background. Zhang says that he did as Song asked with the riverside project: he built a wall and left it there. It can't sit for longer than 3 years, but the plot ratio is too high for villas, so he doesn’t know what to do with it. Song says that the city government has a new plan: they want to use the experience of the Pearl River Delta (PRD) to build a culture and travel industry development area. Song: "That area of land that, you say, is only slightly larger than a sesame seed, is next to the center of this area. There will be a library and a theater. I think it would be very appropriate to develop high-rise luxury apartments. I will help you think of a way to figure out how to solve the problem of height. If I can get them to construct a TV tower there, I can make your project part of the overall plan, so it won’t be restricted by the regulations for apartments next to the river." Song is the Zhuge Liang of the real industry (地产界的诸葛亮, Zhuge Liang is a hero from one of the four great novels of China's history, Three Kingdoms. See Wikipedia entry on Zhuge here).

Song replies: "Get the project in the shikumen done well, and now [Shikumen are another type of old housing in Shanghai. Here are some old pictures of them by Liao Yusheng. The "Xintiandi" area in Shanghai, developed by Hong Kong's Shui On real estate, and exorbitantly expensive, has a museum to Shikumen]". Song tells Developer Zhang that if he doesn't get that old city-center project done, Song can't speak for him on the riverside project.

Developer Zhang: "You only see me eat meat, not being beaten. Real estate does have high profit. But if things go awry, I have nothing. That area looks like the fat on the bone, but it isn't: everyone wants to get a taste. The rich fear the poor; the poor fear those who care less whether they live or die. As for me, I am the donkey in Guizhou without any tricks left [good explanation of this idiom, 黔驴技穷, here].

Song tells him he must find a way. In the Asian financial crisis, some developers were left out in the cold.

Developer Zhang retorts there is a cycle. In those days, Zhongcheng Plaza was bankrupt, but in 2002 it was bought and developed [this is a fascinating story of real estate. Read about some of the malfeasance and history from an investigate report by Caijing here]. In the hands of an expert, there is no such thing as a "rotted-tail building" [i.e. a building that is started but not finished, 烂尾楼].

Secretary Song: Don't forget, Zhongcheng Plaza in 2002 is still Zhongcheng Plaza. But the owner is not the same. It's just like the Titanic. A ship sinks, you can rebuild it and copy it. And the story can become a legend. But the people that died, they have long ago become food for fish and shrimp.

Song drives to Haizao's apartment in his Range Rover [do not know if product placement]. Haizao knew from the day she walked into Song's office and asked to borrow money that she could not repay that there would be this moment (when Song takes her away). It would happen sooner or later, and she was not scared or nervous. Nothing is said.

Song is on top of Haizao. She struggles, protesting. They are on the floor. Song tries to open her coat. They stare at each other. Song uses his hand to close her eyes. He opens her coat and unbuttons her blouse. Her hand falls limply to the floor.

Song increases his speed as he mounts her. The shot breaks into three, showing Song's wife, Young Bei, and Song-Haizao. Young Bei is trying to call and Song’s wife clears the table.

The shot becomes two, showing only Song's wife clearing the table and Young Bei calling and looking at his watch. Song's wife goes into her daughter's room and tells her to get offline. She makes a call from her daughter's room. [fade black]

[fade in to flowers]. Haizao is staring outside, getting dressed. The shower is on in the background. She puts on her scarf and clutches it.

Song drives her home. When they arrive, Haizao looks at him, but he looks at the door, so she flees the car. Narrator: "Song had now sobered up. He felt shameful. Because of the liquor, he had exposed his old body on top of a pearly, transparent girl. He likes her. So why, because he likes her, he must have her?"

Haizao runs into her apartment and starts the shower. Young Bei comes and knocks at the door. Haizao says, her cellphone ran out of battery. And that her period came. Young Bei brings sanitary napkins, underwear, and her pajamas. She takes them, crying. Young Bei knows that Haizao's period has come early, and asks if she has cramps.

"I am certifiable, I am certifiable, I am certifiable. A man so tender... How could I do this to him?"

Haizao is sick. "It must be from the cold. It is chilly, and my clandestine affair happened on the floor. God is punishing me, since I owe him."

Secretary Song goes to get his cellphone the next morning and finds blood on the passenger’s seat. He has done this to Haizao [She was a virgin? Not impossible, but not clear at this point -- Trans.]. Last night, he committed a true mistake, or the truth of what a mistake is. Writing his name on a blank sheet. She is the first women who belongs to me. Completely. To the core. [Seems to be his (and the narrator’s) thinking].

Song calls Haizao, but Young Bei answers. After Young Bei identifies himself, Song says he is "Secretary Song of the Municipal Committee". "Sorry (what) Nothing, I bothered you".

Song comes to Haizao bringing fruit and medicine. She refuses him. He thought she was confused between acceptance and refusal, but now she is headstrong. Haizao knows Young Bei will know one day.

Song has been rejected by Haizao again, what can he do?

Su Chun returns home to find Haiping studying English. He jokes about her becoming a graduate student. He wants to say that he opposes her teaching a foreigner, but doesn't want to start a fight.

Boss Chen brings Haizao a packet from Secretary Song. In it, is 60,000 yuan. Haizao is relieved. It is not like borrowing in the past, when it felt like a stone on her back. Now, it seems deserved.

Haizao gives the 60,000 to Haiping. Seeing her sister so relieved, Haizao feels her body is clean.

Wo Ju – Snail Space 蜗居, Episode 10

2010-02-23T06:51:00.000-08:00

Haiping is talking about how everything is for the child. "We are not peasants. We graduated from university. We are city people. City people should live by city. You can ensure a little more bitterness, a little more exhaustion, in order to provide things for the child." Haiping says that marriage is a tomb, and the longer it goes on the more you dig. But she will not divorce Su Chun, because she can't. She has nowhere to live. Even with more arguments, more cursing, more hitting, she can't divorce with no place to live. If, one day, she makes it, she will leave him in less than a minute.

Su Chun arrives at Haizao's apartment as Haiping decides to go home.

Haizao runs back to her apartment. She tells Young Bei that she wants his money to pay back the loan. Young Bei sits down, with the doll given to Haizao from Secretary Song noticeable on the table behind him. Young Bei refuses to give the money. Haizao is upset, and wants to leave. Young Bei races after her and forcibly grabs her, not allowing her to leave. She thinks, "He is right. Where can I go in the city?"

Haizao goes to Secretary Song's office. She asks Song to borrow money, and feels ashamed since she stood defiantly only a short time before and paid money back, and now is begging for it again. Song’s only demand is that she tell him why she needs the money. Song holds Haizao's hand as she cries.

They go to a private club, where someone named Mr. Liang has left word to treat Song well. Haizao explains the situation. She talks about how Haiping, 7 years older than her, always taken care of her. She brings up the "tomb". Song asks her what Haiping's tomb is. Haizao responds that her tomb is her apartment. Song smiles. After a discussion about family values and the importance of money, Song is astonished to learn that Haizao only need 60,000. He promises to lend it to her whenever she wants it.

On the ride back to Song's office, Song suggests that Haiping teach Chinese to Song's foreign friend. Haizao says that Haiping has forgotten all her English. If they are together, it will be like "a chicken talking to a duck" (鸡同鸭讲, implying incommensurability). They laugh.

Haizao goes to Haiping's apartment to ask her about being a Chinese teacher. Haizao overhears a massive argument about Su Chun losing 1 yuan because of a machine malfunction at the market. Su Chun says "I want to divorce you!" and storms out. Haizao comforts Haiping, who agrees to be a Chinese teacher for foreigner.

Haizao returns home and Young Bei comes home after her to celebrate. He brings a reed that only cost 1 yuan. Haizao thinks about the significance of 1 yuan in life. Young Bei says, "Come eat, little piggy. There is meat". Narrator: "This is Haizao's future. There will be meat".

Young Bei was happy with meat. Haizao wanted more. A happy life is: one mu of land, two heads of cattle, and the wife and kids in a warm bed (a saying: 一亩土地，两头牛，老婆，孩子，热炕头). But you first have to have land and cattle, then you get a wife, then you have children. No one says: the wife and kids in a warm bed, then one mu of land and two heads of cattle. Even old peasants know this. Haizao laughs at herself in thinking of this after only seeing the beef that Young Bei brought home.

Wo Ju – Snail Space 蜗居, Episode 9

2010-02-21T06:55:00.000-08:00

Haizao comes to visit Secretary Song to give him an envelope from Boss Chen. She sees the doll, called "Dream Journey Baby" (梦游娃娃, again unknown if this is product placement; apparently, the dolls are from Japan and designed by Yoshitomo Nara, a Japanese pop artist). [Note: Haizao knows that this doll is a work from Yoshitomo Nara, something I wish I knew before I spent 15 minutes trying to look up the product -- Trans.] [Note2: Haizao explains (since Song asks) that Yoshitomo Nara is very cool, a Japanese cartoon designer and painter, also very good looking, and the products he designs are very "Q" (cute). I am feel very 土, un-Q]. Song gives Haizao the doll and she leaves.

Their argument over, Haiping and Su Chun make up. She is happy, because she bought a lottery ticket, and will soon become a millionaire. Su Chun says she is acting like "the little people of the town (市井小民)". Haiping says when she hits the jackpot and takes home 5 million yuan, she will buy a 200 square meter apartment in the city center. Su Chun says she is dreaming. Thom--something, their apartments (Thomson golf, mentioned in earlier episode), the ones next to the river, are 110,000 yuan per square meter. With you 5 million, you can only buy a kitchen. Haiping says those apartments are a ruse (噱头). She paid 10 yuan for the lottery tickets and Su Chun is a little exasperated since she won't buy vegetables or let him smoke because of the cost. She says she is buying hope, and that she will win.

Grandma Li is sleeping in the longtang alley. Her son sneaks past her, looking like he has been roughed up. He reveals to his wife that he was beaten by a mother whose child was in the game room and brought a bunch of people with her. Grandma Li eventually discovers what happened and says that they will get 1 million yuan. The demolition and relocation people came to see her again and she cursed them. She says they must give her a 2 bedroom, 1 living room apartment, or she will make sure they never demolish the area.

Haiping doesn't win the lottery, so she is depressed. She vows to continue buying. Su Chun rues the noodles that he must continue to consume.

Haiping loses again, even with the numbers she dreamed of. Su Chun makes dinner.

Boss Chen visits Secretary Song in his office. Chen says the work of relocating people is a big pain. He calls then diaomin, "crafty people" 刁民. Chen has tried threatening, cozying up, and ignoring, but whatever he tries, they don't move an inch. Song replies: "Profit will never be at the maximum. If you pursue the absolute maximum profit, you will close off your own road. You should work for a reasonable profit. Give the troublesome people a little more, and you won't mess up the entire situation". Chen says you can't exchange a chamber pot for an apartment -- it is infuriating. Song continues: "You are in a hurry, they are not. What is important is the overall situation (daju, 大局). Do you play Chinese chess (围棋)? In the game, you try to win by allowing small battles to be lost, if necessary. The earlier this is done, the earlier apartments can be sold. Tell this to Executive Zhang and Executive Xu. There may be some controlling measures that are issued from above. The future is uncertain, and it might have a negative impact on Jiangzhou (Shanghai). I don't want that to happen, since this area is covered with my own blood [he means the projects and apartments all involve him and his people]. Don't haggle with these ordinary people". Boss Chen leaves.

Haiping is very happy as she walks out of the apartment sales office. She is talking about decorating the apartment and buying furniture. Su Chun reveals that he didn't ask his mother for the 60,000, but instead borrowed a high-interest loan (he hints that the rate is 10%). Haiping hits him, cries, and walks off.

The narrator speaks as Haiping wanders the city: a hole has been ripped in her soul.

Haiping goes to Haizao's house in tears: "I am going to divorce [Su Chun]". Haizao learns of the loan and promises Young Bei's money plus her own to pay it back. Haiping is sobbing. Haizao says, "this is what blood relatives do for each other".

Young Bei takes Su Chun back to Su Chun's apartment to talk. Young Bei says he though it was absurd that Su Chun and Haiping were buying an apartment, with the prices so high. "Why not rent a big apartment for 2,000 yuan a month?" Su Chun replies, "Not only is that practical but it is reasonable. The practical situation is that: no matter how high the price of apartments is, there will be people racking their brains to find a way to buy an apartment. The reality is, around you, all the people by your side, are all talking about apartments, are all speculating in apartments, are all hoarding apartments. And if you don't have an apartment, you will feel you have been marginalized (边缘化了). You will be struck with feelings of dread and instability. Like a drifter. Paying rent is always helping someone else buy an apartment. Psychologically, it is hard to accept this. Haiping is over 30, and around her all these people have apartments. She does not. Haiping is very unhappy."

Young Bei: "So, in order to live up to unrealistic expectations, you take on a snail's shell that large (套那么大一个蜗牛壳, "take on" or tao has other meanings, especially in the housing and stock markets. It means to "be stuck", as an article I wrote for WEF explained -- basically the object of investment falls below the value you bought it for, thereby making it impossible for you to sell (so you are stuck with it)). Isn't it exhausting? Good thing Haizao isn't like that".

Su Chun: "Haizao has not grown up and become self-aware yet. Every little girl wants a Barbie doll; every maiden wants lipstick; and every woman wants an apartment and a man." (Young Bei laughs).

He continues: "A man possessing is like in a war. You occupy the territory for a while, then leave. A woman possessing is different. It is like germs spreading, a spider web expanding, or cotton candy swelling. A little at a time until eventually you are completed possessed, and can’t escape, completely swallowed. Men are bronze, women are rust. In the end, rust will completely cover the bronze."

Young Bei: "At least you still dare to speak. There are people worse off than you: Abraham Lincoln. His wife was so fierce that he didn't even dare to fart. He even had to flatter her. Think about it, who lost everything? It is not you. Ok, don’t think too much."

Wo Ju – Snail Space 蜗居, Episode 8

2010-02-20T10:14:00.000-08:00

Haizao calls Haiping and tells her that the apartments being developed by Haizao’s company are for sale. Narrator: "Although the infrastructure was not yet developed, and although the transportation was not yet developed, Haiping knew that this was her future home" [while this is said, the scene is of standing apartment buildings but with ground filled with discarded building materials and ground pock-marked with small holes].

The sales woman shows the apartment, 120 square meters, to Haiping and Haizao. They say how an un-enclosed balcony is a good thing, and hard to find these days, because it is not included in the price of the apartment (where total price = price/meter * number of meters, not including (or only 1/2 including) the balcony)).

Haiping already imagined the furniture and furnishings for the apartment, with the room painted in ocean blue and ocean white with some wallpaper, and Ran Ran running around in beautiful clothes.

The apartment will be handed over to the buyer in 10 months. Haizao thinks it is far, but Haiping says she can get a new job nearby. The cost is over 900,000 RMB ($130,000). Haiping wants to buy it, so she calls Su Chun to come have a look right away. "Otherwise someone else will run off with it (抢走了)." When she looks at her phone, Haiping laughs. They look at her phone: "Jiangsu (Province) Mobile Phone Company welcomes you". [She is so far from Shanghai that the neighboring province’s mobile phone transmitters detected her as crossing the border, and sent her a text message].

A real estate developer is having tea with Secretary Song. The developer claims he is in the doldrums, since two of his properties are not selling, and if he loses money on the third, it will be the end of him. The government policies from the center are having an effect. Song tells him that price is just an indicator of economic growth. If the market can't be made hot, made attractive, then it will crash like a mountain. Song tells the developer to collaborate with other big-wigs (龙头) and make the market exciting, hot, popular, attractive.

The developer talks about how they paid a bunch of migrants 50 yuan each to come in the middle of the night and stand in line to buy. It didn't work because there were few real customers who followed. Another developer asked him to collaborate and buy each other's apartments with mortgages but he was afraid: what if the other developer doesn't hold up his end, or if the apartments are not great and he is stuck with them.

Song: "Since you fear the wolf from behind and the tiger from ahead, why don't you just buy your own [apartments]? Raise the price and borrow money from the bank. It's just a few down payments anyway. What you can pay back, you pay back. What you can't pay back, let the bank take it. But if the price rises again, you will make everything back."

Developer: what if the bank won't loan? Song: "Why wouldn’t they? 羊毛出在羊身上, "without a sheep, there can be no wool", (on the surface, something appears as a gift, but in reality the value of the gift has been paid for in the cost of the gift-giving opportunity) [a popular phrase]. It is not enough to be hard-working, you also have to be clever. You must learn about how to move around capital. Understand?" (The developer nods enthusiastically.)

Haizao makes fun of Haiping on the bus because it will take 3 hours to get back. "Like foreigners, it's fashionable: live outside the city and commute to work".

Secretary Song offers the developer a redevelopment project in the old city district. Although it is a "public tender", Song gives the developer materials and tells him to prepare a good bid. The developer balks, saying that demolition fees are high and the people living there are the lowest level of city residents (he calls them diaomin, "crafty people" 刁民, a derogatory term). Even if I take this, let’s talk about the plot ratio. The materials specify it is 1. Is this a joke?

Plot ratio, 容积率, is the total floor area of built apartments divided by the land area. So if there is a 2 acre plot of land, the total amount of housing that could be built (albeit in apartments which have a base area much smaller) would be 2 acres, and still yield a plot ratio of 1.

Song explains further that the current project, based on the city plan, is to build a park. But the plan is from 5 years ago. He will change it. But he can't change it until the land is taken by a developer, otherwise everyone will see that he is behind things. So, once the developer (named Zhang Hongsheng) gets the land and starts the project, Song can use his government position to influence city planning bureau, which will reduce the size of the park, and the remaining land will all be for Developer Zhang to build on. Also, Song will increase the plot ratio, and thereby allow Zhang to make money. If this leaves your lips, says Song, it's your own fault. When you are relocating residents, say you are building a park. The developer agrees enthusiastically, and says he will call an emergency meeting to succeed in his bid no matter what.

Haiping and Su Chun are in the sales office to buy the apartment. If they going to pay back the loan in 10 years, with current interest rates, the monthly mortgage payment is 10,800 yuan/month ($1,600). 20 years, just over 6,000 yuan/month. 30 years... They are too old. They make the down payments.

Su Chun: Our incomes together are 9,000 yuan. We must pay back the loan in 20 years. We will sleep soundly. If it is 30 years, it is like being an employee of the bank, and the interest will be equivalent to a whole extra apartment.

Secretary Song buys a doll that he thinks looks just like Haizao. Finding himself outside Haizao's apartment with a gift, he doesn't feel like a 42-year-old. He decides to go home.

Haizao returns home and the apartment, that she and Young Bei share with others, is in the midst of big party. Haizao is pissed off. She asks Young Bei, "When will we have an apartment of our own?" She is envious of her sister, and the apartment they picked so she won’t have to fight for the toilet and have to endure loud parties.

Haiping and Su Chun have a fight because Su Chun is still smoking -- and it is because the cigarettes cost money.

Secretary Song gets a document from Boss Chen's company and he asks the girl who brings it if Haizao is still employed there. The girl tells him that Haizao has been promoted, and no longer does work outside the company. Secretary Song calls Boss Chen to invite him to collaborate on a project.

Scene: a partially demolished building. Boss Xu (we haven't met him before) is instructing an employee on how to deal with the people who are not leaving for demolition. He says, wait for them to come to you, and they won't get as much money. Boss Chen walks in. The employee that Boss Xu was instructing was not an employee, but the director of the residents' committee. Boss Xu says that if the relocation is done well, he will give extra fees and projects to Boss Chen.

Wo Ju – Snail Space 蜗居, Episode 7

2010-02-19T02:35:00.000-08:00

Back in the longtang, Haiping and Su Chun are eating dried noodles for the fifth time this week. Su Chun can't stand it, but Haiping says they have to persevere to save money for the apartment, interior decoration, and household appliances.

Haizai goes to Secretary Song's office, gives him the bid papers, returns the cellphone he gave her, and pays back the 20,000 yuan loan. Song's heart is torn open by being rejected. But what can he do? He calls Boss Chen and tells him off, that he interfered with Haizao.

Boss Chen is angry with Haizao. She retorts, "Mr. Chen! You only give me 3,680 yuan a month. So I only do 3,680 yuan worth of work. The job description was for a copyrighter. But what does that have to do with the 'communication of feelings' you are asking me do!? Does copyrighting including doing one thing under the cover of another (暗度陈仓)？Besides documents, fetching things, being a messenger, accompany at banquets, accompany singing, and accompany dancing, the only thing I don't do is accompany sleeping [i.e. sleeping with clients]. With that little money, you want me to sell my body to the company? If you have any more excessive requests, I quit!"

Boss Chen decides to raise Haizao's wages: "Feed the livestock a little more grass at night, and it won't (be able to) run (小蹄子要不加点儿夜草，还不跑了)".

Haiping's boss tells her and her officemate that they must each contribute 143 yuan (very little, he says, in Jiangzhou [Shanghai]) for the red envelop for a woman who got married. Haiping is very upset: "How many toys could I buy for Ran Ran with 143 yuan!?" Haiping complains that she doesn't even know all these officemates that are getting married all the time.

Haizao buys a job classifieds newspaper.

Su Chun pours hot water into his instant noodles. Haiping: "1-2-3. I am pretending it is chicken soup." She drinks. Su Chun laughs. "What are you laughing at? It’s delicious!"

Haiping decides to buy a bicycle to ride 7 stops, saving 1.5 yuan every day, or 33 yuan a month. "Not only saving money, but saving the environment." Her mind is running. Su Chun is amorous. He nudges her. Nudges again. "Let's exercise a bit. Protect the environment. You want to? (No. The old bed, it creaks and cranks. Everyone downstairs will here)." Su Chun rolls over, sighs. "Soon, I will become dried-out mummy. Not even one time per month. It depresses the spirit." Haiping: "Not having an apartment is the real depression of the spirit."

Haizao has been promoted, earning 5,000 yuan a month, and doesn't have to attend banquets or karaoke. She goes with Young Bei to the Shanghai Aquarium [where they have a romantic tunnel underwater where the fish swim all around. However, during peak hours, it is anything but romantic! Website is here].

Haiping's bicycle is stolen. She says her luck has been terrible this year. So she will go to the temple to pray. Su Chun "I told you so". Su Chun tries to light a cigarettes but gets cursed by Haiping, who says she inhales enough exhaust on the road. "Why do you always blame you unlucky things on me? I try to bend and work with you, but you are excessive. You are impossible to please. My this you don't like. My that you don't like. I have no roads left. Besides smoking, what hobbies do I have? After work, I come home obediently. I don't play majiang, and I don't drink. I have a strong ability to control myself. What right do you have to scold me for smoking? Is there meaning in that?" Haiping is angry. She says Su Chun has contributed nothing to their household. He hasn't made money, and hasn't got a good job. He leaves "to get a breath of fresh air".

Narrator: "Men... are very tired."

On the street, Su Chun meets Old Chen. Old Chen commiserates, "Actually, I am the same as you. At home, there is a lion from the east side of the river [a domineering wife with a temper, 河东狮]. We are in the same boat." Su Chun talks about how great he was, and regrets moving to the big city. "Those who leave their hometown become lowly, 人离乡贱." Old Chen laughs. "We are tragic. In this big city, in the middle of the night, we have been forced out of our homes to huddle at a newsstand, and regret the course our lives have taken. Actually I was just feeling sorry... for my wife. She is a beautiful flower, but now, in our situation, because of the pressure of life, she has become a violent person. If she had a car, and help at home, would she be so angry? In this materialistic big city, that she would be with me, a person with nothing, should make me appreciate her, accept her, love her, make her happy." Su Chun, "Why is it that, this big city makes 100 claws torment the heart (百爪挠心)? There is nothing that you can depend on. I admit it, living in this big city is exciting and busy, but so many things put you on your guard. For us men, there is pressure. For those women, the pressure is even greater." Old Chen: "Right, right, right". Ok, let's go home!

Haiping: We must 闭门造车, close the door and create a vehicle. Another Chinese (language) expression. Meaning: Divorce oneself from reality and act blindly; or, work behind closed doors.

Haiping: The old sayings are still right: A poor and low couple will encounter many difficulties.
俗话说得好：贫贱夫妻百事哀

Wo Ju – Snail Space 蜗居, Episode 6

2010-02-18T08:21:00.000-08:00

Hundreds of people stream into the real estate sales office. Among them are Haiping and Haizao. In a frenzied scene, the sales people are pointing to different apartments and putting up red flags on a board with numbers representing the apartments. The board is becoming covered with red flags. A man asks for one apartment and is told it is sold. He asks about another building and the sales woman replies that "that entire building was just bought by a person from Wenzhou" (one of the first references to Wenzhou Apartment-Speculating Groups (温州炒房团, infamous for buying up apartments, waiting for them to increase, and then selling them in Beijing, Shanghai, Guangzhou, and other cities in China).

The chaos continues. Haiping and Haizao look around at a vast sea of people all buying apartments. Disappointed they walk away.

Haizao: "How can buying an apartment be as crazy as buying a [stock] purchase certificate? [the stock purchase certificate was sold in Shanghai in early 1990s. It is well known by everyone as something was initially thought to be worthless but ended up making fortunes for people. It, and the development of the Shanghai Stock Exchange are described in the book by Ellen Hertz (1999) The Trading Crowd, book here. Also see this link for a description of purchase certificates].

It is even scarier than when clothes are discounted 90% at the department store."

Haiping: "At least in the department store they give a discount. Here there is no discount and it still increases in price like crazy. ...forget it, let's go." They leave.

Back at Grandma Li's. Her son and his wife are looking for the household registration book (hukouben), the same document that the demolition team wanted, in order to register for relocation (and compensation). Grandma Li says that they will not give enough money to buy 20 or, much less, 40 square meters. And even if they do, it will be in the suburbs, and they will want an addition 80,000 to 100,000 yuan. Grandma Li asks, "do you have that money?"

Grandma Li: "I will not move, I will not register. I will just stay here." The couple agrees.

Haiping returns home to find Su Chun making jiaozi. She says she has visited 7 apartment complexes in the last two days and not found a suitable apartment. Either they are selling the best apartments in the complex, and they are too expensive, or they sell apartments at the end that are not expensive but have a lot of problems. The price is getting cooked (chao) higher and higher.

Su Chun says that no matter how much they cook the prices, there has to be a market. Otherwise the apartments will sit there and will put pressure on the finances of the developer. Haiping can't believe that the price is so high and people are still fighting over (抢, 抢房子 used several times in the last few episodes) apartments like they cost nothing. Even with crappy apartments, you still have to wait in line, get a number, and look at the map. If you hesitate, the person behind will buy it. Hesitate again, and half the complex is sold. In this type of situation, how can I think normally about an apartment, its quality, its water system, its isolation from street noise, the space between apartment buildings, the number of people buying, and the safety of the area. You can only blindly buy.

Haiping: "According to market rules, it should decline. But there is no sign of a decline.

And then there are the developers. They have more and more fiendish ideas. Before, they would just start selling the apartments. Now there is something called inside sales (内部销售) before the opening. Do you know what is meant by inside sales? It is like buying a color television in the old days. You have to go through the back door and use your guanxi (connections). Today that was what we did, using information from Haizao's friend. They said it was inside purchases, and the real opening of sales would occur in 6 months. Today, in the end, all I could think of was too words: too poor. If you haven't been to an apartment sales office, you'll never know how poor you are.

We are both college graduates. People would say we are white collar workers. We are the middle class. Then, why can't the middle class afford an apartment?"

Su Chun: "This gang of dishonest merchants (jianshang, 奸商, a word that Confucius used) really are something. Early on they fully researched the human nature of Chinese people. The idea of a household in China is that you must buy an apartment for your children." They talk about when Ran Ran gets married and how she will need an apartment.

Haizao returns home and Young Bei gives her massage. She is exhausted from looking at apartments with Haiping. Her boss calls her to accompany and chat with a client, to which she reluctantly agrees.

Secretary General Song (Song Siming) is tired from his job attending government and party meetings and going to their banquets. He calls Haizao. She is at a karaoke room with her boss’s clients. He drives and picks her up. He takes her home. Young Bei is already asleep.

Haiping is fuming at lunch with her officemate over apartments: "A donkey’s lips on a horse's mouth! Nothing fits. What I want is family (家). I want family. Convenient transportation, a vegetable market, a nearby school, hospital, and sanitation station. I remember I asked one of the sales girls if there was a vegetable market nearby. Do you know what she said? She said 'Vegetable market... sorry, no, there is not one here. But there is a private club with a cigar bar here'. Cigar BAR! To smoke, you go to a special bar! Money burning a hole in their pockets. Now I understand. In the end, apartments are not being built for people like us."

Her officemate says that looking at the trends, the price will still increase. Jiangzhou [Shanghai] houses at Liberation were only dimes per square meter. And Hong Kong at that time was rural in the eyes of Jiangzhou people. Now look at Hong Kong's prices. Also, people from across China are coming to Jiangzhou to try their luck; university students graduate and stay. There is still room for prices to increase.

Chen Sifu (陈寺福), Haizao's boss. He was uneasy. He needed to bid on the land parcel at Zhongshan Park. How should he write the bid proposal? And Secretary Song had disappeared. He goes to Song's office. Secretary Song is cold. He says, "this is a public invitation for bids. We will not interfere."

Boss Chen asks Haizao to take the bid proposal to Secretary Song the next day for him to look at it. She reluctantly agrees, and is very sad.

Haizao asks Young Bei for money to pay back Secretary Song. He agrees, and regrets not lending her the money to give to Haiping. He gives her 20,000 yuan. She cries. He hugs her, not knowing what is wrong, and says "I love you".

Wo Ju – Snail Space 蜗居, Episode 5

2010-02-17T03:45:00.000-08:00

Back in Secretary General Song's office. Haizao says that Song must attend the opening of the xiaoqu, or else she will be out of a job, as Boss Chen told her. Song says he will call Chen. Song also gives Haizao a mobile phone, saying that a friend gave it to him to try out for two months, and then send in the suggestions form. Haizao reluctantly accepts the gift and leaves.

Su Chen is cooking and Haiping is still reading her book on fengshui. She says one can't buy U-shaped, T-shaped, H-shaped, or 1-shaped apartments, and it is all for reasons that have been proved scientifically -- for instance, that U-shaped apartment complexes resemble the character for death. Su Chen is exasperated that Haiping spent money for three servings of rice on this book of feudal superstitions.

Boss Chen tells Haizao that she should take orders from Secretary General Song in the future, since his matters are more important than the companies'.

Haiping and Su Chen look at another apartment with the agent. Haiping, outside, is unsatisfied. Haiping does not give a reason, but points to the interior decoration being temporary as a indication that something must be wrong with the apartment. Su Chen is upset, claiming that it will be impossible to quickly find an apartment with Haiping's attitude, and tells her to find an apartment herself.

Discussing food over dinner, Haiping suddenly interrupts.

Haiping: "I know. I finally know. Why I have looked at so many apartments and still can't find one. It's because they are all second-hand (used). They are all old. I want new, I want a new apartment (新房). Without the tinge of anyone else. I am the first possessor of this apartment. Starting from tomorrow… starting from tomorrow, I will only look at new apartments."

Su Chen: "New apartments? New apartments? They will be dozens of kilometers from the city. Two hours to get to work, and two hours to return home."

Haiping: It is better to buy an apartment that is further away, but next to a starting point for the bus, and sit for the two hours, rather than stand on the bus for one hour to get to work. And with the speed of development, it is not impossible that we will buy a car. There is a domestically-manufactured one that costs only 50,000 yuan. Look at Minhang [the characters are different from Minhang district of Shanghai, but the pinyin is the same]. It used to be far away, but it developed and developed and it will soon be a center of the city.

The preliminary demolition teams comes to visit the elderly woman--Grandma Li, who lives on the ground floor of the collective house where Haiping and Su Chun rent. There is a representative from the residents committee, which is bursting with enthusiasm. There are also a man in a suit and an aging man from the area. She ignores the initial exclamations of the residents committee representative, who says that are moving from chamber pot life into a new apartment (with indoor toilets).

Old woman, there is a new trend, and you have to be a part. You want to be emptying the chamber pot for the rest of your life? You want three generations under one roof? You want that?

Grandma Li: "Why wouldn't I want that? This is a good home. Warm in the winter and cool in the summer. It costs me nothing. Transportation is convenient. The local hospital is only steps away. For those of us with low incomes, and little security, saving money is a good thing. Understand?"

There is now a crowd of people in her room.

Grandma Li: "At my age, where can I move? Outside the city? Suburbs? The ways of world have really changed. Out of towners and foreigners are kicking us out. They live in the city center, in high-class areas. Break up those of us who have lived here for decades. Us old Jiangzhou (Shanghai) people, become lowlier as the days pass."

The residents committee representative says the Grandma Li is not keeping up with the times. She is like a "frog at the bottom of a well" (井底之蛙, a metaphor used in earlier episodes by Haiping), staying in one place where it is inconvenient to use water or go to the bathroom (in earlier episode, Haizao saw Grandma Li's son showering and was disgusted). This is not the living style of a big city.

Grandma Li: "People move upward, but water runs downward. Without improvement or advance, how am I to move?"

The group leaves and in the alleyway say that Grandma Li is certain to become a "nail household" (钉子户) [Here is a very famous photo of the most well-known nail household in China, in Chongqing:
]

Secretary General Song picks up Haizao at his office. They ride in an U.K. SUV -- probably a Range Rover. They talk about different things, and eventually Haiping calls to invite Haizao for dinner. Haizao is upset because she doesn't have the money. Song offers to lend it to her and she accepts. They arrive at the destination.

At Song's house, he sleep late and doesn't know S.H.E. -- the pop rock band from Taiwan. He tries to stop his daughter from attending a signing for them in Century Park, but fails. Song makes a call and arranges for his daughter to be taken care of at the event as a V.I.P., so they will not have to get close to the crowd.

Narrator: Haizao makes his (Song's) blood race, and makes him feel old, but also young.

Back to Auntie Xu and Madame Wang. Madame Wang thinks Auntie Xu is stealing money by buying too little food with the money Wang gives her. Xu says she wants to quit because Wang is too penny-pinching, and doesn't trust her. Wang threatens to take away three days of wages. Xu quits, and Wang says she has a master's degree from a famous university, so it is below her level to have to deal with this type of person (to a neighbor).

A real estate company. The employees are attaching numbers to a board. There are a few apartments that are reserved in advance, and they are marked with a red flag -- there is a layout of the apartment complex in miniature in the company lobby. Building 10 is reserved, and building 6, with multi-levels, will be sold in the next batch of apartments. The employees adjust the board to reflect the choices made by Executive Zhang. Is there a mistake with the price? Last week it was 9,500 per meter. A whole week has passed. Can prices not go up? This land parcel, it is exactly 11,600 per meter. I almost don't want to open up the apartments for sale. If we could just wait half a year, or a little more, it would be 15,000 per meter. How much profit am I sacrificing?

A woman who knows Zhang comes in and wants a number, near the top. Zhang gives her the number. Zhang gives a speech to the guards to control the crowd. Safety first. For sales girls, be fast. If they can’t decide in 10 minutes, forget them. Understand?

Ok. Start!

Wo Ju – Snail Space 蜗居, Episode 4

2010-02-16T01:43:00.000-08:00

Young Bei tells Haizao that he has 60,000 in savings, and she is ecstatic. In his response to her question of how he saved it, he says he doesn't buy clothes or consume, and stays at home all day with his obedient piggy -- yiqi woju, 一起蜗居, here woju is used as a verb, they live in their snail space together. First time this word woju has appeared in the series.

The people in the longtang get information that their housing will be demolished, and they are excited. They know because someone's wife went to the residents' committee to move her hukou but was rebuffed since all hukou are frozen until the next year for demolition.

The middle-aged woman says 1 square meter will be worth 20,000 yuan -- and that that is pretty good compensation. The middle-aged man says they only have 10 square meters so that is not good.

The elderly woman says the couple might be happy about demolition, but she is not. The developers will turn around the land and pocket millions or tens of millions. She has lived there since she got married, and she doesn't want to move. In the past at its height, the 10 square meter space had 7 people. And she wasn't sad when her husband died because, for the first time, she could stretch out her legs.

Haizao asks Young Bei again about borrowing the 60,000 yuan to lend to Haiping. He says, one day, your sister will not be your closest kin, but instead it will be him and their baby. How can they get married on May 1 of the following year, and purchase an apartment, if they lend all their money to Haiping. This amounts to a rejection of lending the money.

We meet a new couple with a teenager. They are sitting in a large living room eating breakfast. The daughter is eating toast and milk, unlike the adults who eat rice porridge. The father is Secretary General Song, who showed an interest in Haizao. The father says he is late so can't take the daughter to school. She must get a ride with someone's mother instead.

Haizao is asked to play golf with her boss instead of go on a business trip.

Su Chun comes home and doesn't turn on the light. He sits on the bed.

When Haiping returns, he tells her that his mother is sending 60,000 yuan. She is ecstatic. He thinks to him self: "Now you say 'our mom' instead of 'you mom'. If she didn’t give the money, it would have been 'his mom' [咱妈, 你妈, 他妈, this is a joke because a working translation of "dammit!" in English is 他妈的, or "his mother’s"]."

Haizao's boss, Executive Chen, is waiting for her. He picks her up and they go to Thompson Golf, a well known course/residence in Shanghai.

Another new set of characters: Auntie Xu, who works for Madame Wang. Auntie Xu wants a pay raise, but Madame Wang says she can't just increase her salary.

Secretary General Song, Haizao, and Executive Chen play golf together. Song helps Haizao to swing a few strokes.

A real estate agent is explaining to Haiping and Su Chen about an apartment. He explains the convenient transportation location, so they ask him about the noise. He says only garden houses on Hengshan Road have both good transportation and no noise.

Outside the apartment Haiping says the apartment is not good enough. "This will be our guarantee for the next 1/2 of our lives," she says. "He mentioned a 'mature community' that means old houses. Built in the late 1980s -- it's been almost 20 years. They have had 统共使用权 ("all had use rights", [the origins of this phrase are unknown to me -- Trans.]) for only seven years. We won’t even be dead and the apartment will be taken away by others."

The agent calls again. Haiping hangs up and suggests that they find a couple of other agents. "货比三家不吃亏" , or "compare the goods from three stores in order to avoid getting ripped off", a saying [This saying is cited in a well-researched book on department stores in China, written by Amy Hanser. While a little one-sided, it does good comparative work on an underground clothing market, a state-owned department store, and a Hong Kong luxury mall all in Harbin (a city that is much easier for Westerners to work in than Shanghai or Beijing, where the cities are saturated). The book is called Service Encounters: Class, Gender, and the Market for Social Distinction in Urban China and can be accessed here.

Su Chun sighs about the prospect of continuing to search for apartments.

Back to Madame Wang's apartment. It is richly decorated, and there is a party (that Madame Wang asked Auntie Xu to stay around for and clean after). Madame Wang: "Auntie Xu, please bring a plate of fruit".

Haiping is reading a book: Fengshui for Modern Housing , 《现代住宅风水》. "Su Chun, you have to look at a lot of apartments before you buy. Otherwise, it is easy to end up with a 衰房, shuaifang, 'apartment in decline'. You can’t buy apartments in a complex shaped like a box; because people in a well have blocked wealth and valuables. It's not feudal superstition. For logic of the prohibition on apartment complexes shaped like a box, the apartments inside will be blocked from the sun, and without the sun, it is easy to catch diseases."

Auntie Xu asks to take home the dishes that the Wang family doesn't eat. Madame Wang agrees, then laughs, "that saves your food fees, so it counts as an increase in your wages." Auntie Xu looks distraught.

Haizao goes to a government (party) building where Secretary Song works. She finds Secretary Song, and invites him to the opening of a new xiaoqu developed by Boss Chen's company. He says, "Come into my office."

Wo Ju – Snail Space 蜗居, Episode 3

2010-02-14T05:47:00.000-08:00

Haizao comes for dinner. Haiping notes that she learns a lot about prices of vegetables and meat, as well as nutrition, from her neighbors. Haizao is thinking about marrying Young Bei. Haiping gives her advice.

Haiping and Young Bei are returning home for holidays (national day).

[Note: Haiping buys toys from Disney store, and has Disney bag; when she gets on the bus to the train station, there is a noticeable logo for KFC. Don't know if these are "product placements" or not.]

Haiping returns home. Haiping’s mother says Ran Ran is over 2, because Haiping is treating her like she is only a few months old. Narrator: Haiping didn't realize that the child had already grown up. Ran Ran is 2.5 years old.

Haiping is extremely upset because Ran Ran chooses as punishment to have "mom hug her". She returns to Jiangzhou.

Haiping, back in longtang, to Su Chun, adamantly: "I want to buy an apartment!"
Su Chun, in disbelief: "It's too hasty, isn't it?"

Haiping: Don't try to stop me. I have decided. Do it as I tell you. I want to buy an apartment and let Ran Ran live with me. A 2-bedroom, 1 living room apartment that is not too far away. 800,000 yuan. The down payment is 20% or 160,000. Our savings plus accumulation fund is 80,000. As for the remaining 80,000, you are responsible for asking your parents for 40,000; I will ask my parents for 20,000 -- and I won’t give them anymore money to raise the child. The remaining 20,000 I will take from Haizao's marriage money and use it for now.

Su Chun: Buying an apartment is not so simple. Don't you plan to decorate it? What about furniture? It's not just the down payment. And with interest rates and everything, it will exceed our ability to pay it back. You are being too rash.

I am not being too rash. I can't wait. I know that everything will be solved in the future. But I can't wait. Now, now I want to buy a 2-bedroom, 1 living room apartment.

Haiping: this price increase in housing, have you seen any increase like this? The stock market goes up and down. But only two days ago, there was a rumor that the price of housing might decrease at the end of the year. Immediately specialists come out in the newspaper and say that the stability of the real estate market must be protected, and the apartment market has just entered its spring. Spring! Even though it has risen this much. [at the end of 2008, this did occur. A stimulus package was passed by the State Council; two points that most certainly would be rued by Haiping are that those who buy a second home can get favorable loan conditions, and that those who sell their apartments within 2 years pay tax only on profit, while those who sell their apartments after two years pay no tax whatsoever. Xinhua article here -- Trans.].

You remember when we graduated from university, we did a calculation -- for that townhouse. If we didn't eat or drink in the city it would take 20 years to pay it off. Now, do the calculation again. If we don't eat or drink in the city it will take 50 years to pay it off for the same townhouse. What does this prove? That suddenly I will live 30 years longer? This proves that the more you think apartments are expensive, the more expensive they get. They become more expensive just to prove you wrong. What can you do? So, this time, we must clench our teeth and buy, otherwise we might never be able to buy for our entire lives. Don’t be afraid. Ask your mother for the money. When she gets old we will take care of her. It’s like buying life insurance but the return is much higher. Go ask her for the money.

Su Chun: Before, you always talked about apartments. Then you always talked about our child. Now you suddenly make a decision.

Haiping: It is because of my daughter. The apartment and the daughter go together. You can only really have a daughter if you have an apartment. ...She [Ran Ran] learned nothing from me, no words, characters, no feelings, understanding of the world. I have not fulfilled my role as mother.

Haiping recalls the difficulties of pregnancy and childbirth. She says she wants a different life, with Ran Ran at her side.

Haizao is lying in bed while Young Bei gets ready for work. She complains about having to work and how well off her boss is.

Haizao is working at a property development company (Dajiang Property (Zhiye) Real Estate Development Company). The boss comes in, looking casually dressed and leisurely asks if any letters have come for him. He notices Haizao cleaning up in the conference room.

Boss: Haizao, didn't you hear? The banquet will be at The Bund Blue Club.
Haozai: Yes, going out to eat with people is part of my job.

At the banquet, the head of the table, seated in the most respected seat, and toasted by Haizao's boss is a man called Secretary General Song. He seems to have an interest in Haizao. He asks her age -- it is 25. She also tells him she is single.

Haizao only has 8,000 in savings, but she will give it plus Young Bei’s savings to Haiping for a down payment on an apartment.

Happy New Year!!

2010-02-13T00:55:00.000-08:00

春节好！！

Wo Ju – Snail Space 蜗居, Episode 2

2010-02-12T21:48:00.000-08:00

Haiping and Su Chun are climbing the stairs of an apartment complex (so there is no elevator). It is all cement, and there are “small advertisements” spray painted on the walls offering fake ID cards.

Many couples wander around the apartment. The bidding starts at 380,000 yuan.

Haiping pulls Su Chun outside and says the price is outrageous.

Outside on the street, Haiping says that besides the first couple who really wanted the apartment, the rest of the prospective buyers were cappers/shills (tuor, 托儿, people who act on behalf of others, in this case to bid up the price with no intention of buying) for the real estate agent. Su Chun replies that he just got a call from the agent who showed them an apartment the previous week. The apartment sold for 32,000 yuan over the estimate.

Su Chun: "We are trying to choose an apartment. Soon, an apartment will choose us".

We find out that Haiping's last name is Guo. She knows the city well since she can give directions. One person in the office calls her "big sister" while a middle-aged woman calls her "young", indicating that she is probably close to 30 years old.

Her officemate calls her a "living map". Haiping says it is the result of looking for apartments. Her officemates wonders why she hasn't found one that is appropriate. Haiping says it is because of cost. The "Sun City" apartments are really nice, but they start at 1.5 million yuan.

Another circle of bidders. Haiping and Su Chun buy the apartment, even though it is no different from the circle of bidders they were part of before. Haiping is worried about having a baby and not having an apartment.

During celebration of finally buying an apartment, Su Chun is called by the agent to say that the owners are not selling, since someone else will pay an extra 20,000.

The baby arrives and they are still in the longtang. Diapers, bottles, and new things make Haiping complain about the lack of space. They can't buy reusable diapers because there is no wear to dry them. "Disposable diapers 100 yuan/pack; milk formula 100 yuan/can – your fees are even more ruthless than China Mobile!" Haiping says to the baby.

Haiping's mother wants to take the baby, Ran Ran, back to the countryside to raise for a few years so that Haiping can go back to work, earn money, and buy an apartment. Her mother claims that the smallness of the apartment negatively affects people's temperament, and will be bad for the child. When the time comes, both sets of parents – Haiping's and Su Chun's – will give them some money to help get an apartment in the big city. Haiping reluctantly looks at her mother, indicating capitulation.

Haizao is now in a relationship with Young Bei. She forgoes all luxuries, especially clothes, waiting for them to go on sale at 50% off after they are out of style. But she cannot resist ice cream. 25 yuan for one scoop (at Haagen Dazs). She won't buy it because it is too luxurious, too corrupt. She thinks about how Young Bei is saving money to buy an apartment. Eventually Young Bei buys her a scope.

Haiping in office. Her officemate complains about spending 140 yuan to see a terrible movie. When she tries to write about it online, her comments are deleted and her account frozen. Haiping says that people have to want to be cheated, otherwise it would never happen.

Back at home, middle-aged woman in collective kitchen complains about Su Chun using their water tap. Haiping retorts that the woman used their cooking oil. After Haiping leaves the woman complains to an elderly woman about out-of-towners and how they are not like locals; and also that both Su Chun and Haiping graduated from famous universities and have high incomes so they should not be so cheap.

Haiping is upset about the incident. She complains about not having an apartment. She is 32 years old and has nothing. She feels less than little people of city, less than off-post workers – even though Su Chun says that those groups of people are lower than Su Chun and Haiping, so interacting with them is degrading.

The argument continues. Haiping cites her classmates who have 2 houses and 3 cars. She wishes she married well instead of studying well. She is stuck in a terrible place with terrible people. They talk about the missed opportunity to buy a house with 70 square meters for 400,000 yuan. They blame each other for not buying, as now with the demolition due to the subway, the apartment will be 800,000 – 1 million.

Su Chun: When we graduated, I said let's go back to our hometowns, either yours or mine. If we had, by now we would be chicken heads (鸡头，big fish in a small pond). You wanted to stay in the big city [there is a saying in Chinese, "better to be the head of a chicken than the tail of a phoenix -- 宁要做鸡头，不要做凤尾"].

Haiping (repeating a line from episode 1 that she said to Haizao): Being an upright person (zuoren) is being an upright person in the city.

Su Chun says they have to learn from their experience. Next time, instead of deposit, they should sign a contract on the spot and throw the down payment at them. "This is a society where people fight over apartments (抢房子)".

Haiping calls long-distance to her hometown and talks to her mother and Ran Ran. The call only lasts a few minutes but Su Chun keeps telling her to hang up because of the long-distance costs. Su Chun says, restrain yourself, hold it in, once we buy an apartment, we can have Ran Ran come and live with us.

Wo Ju – Snail Space 蜗居, Episode 1

2010-02-11T22:49:00.000-08:00

1998, Jiangzhou City

A longtang [Shanghai "traditional" alleyway pdf explanation here ]. They enter an alleyway with underwear and clothes hanging out to dry. The man looks at the woman and says, somewhat disgustedly, “This is our home?” The women replies. “Yup. Our new home”.

Woman is named “Haiping” （海萍）.

Man: “One day, maybe we will have a house of our own. And maybe it is even a villa by the sea. When you open the window, you can see the waves. We will lie on the beach sunning ourselves. Our child next to us building sand castles. Then, we will remember this day, when we were young, there was a time when I cleaned the shower and you cleaned the toilet. Will you feel that the road was very happy?”

Haiping: "I have a question. If we have a child that is building sand castles, that means in only a few years, we will achieve this” (Yes). “I see: you dream it, and I do it..."

(end of scene is people in shared kitchen preparing food while sounds of couple are hear from above)

Man: Now, townhouses cost around 490,000, and you only make 1,000 yuan a month.
Woman: In the future, my wages will increase much more than housing.

Haiping asks about Haizao 海藻, her sister. Haiping’s mother says that she wants Haizao to go to university in their province, to stay beside her, since her other child (Haiping) has gone away. Haiping replies that the universities there are better than those in her old town [hence, we learn that Haiping is an out of towner (waidiren) in Jiangzhou].

Haizao wants to go to university in the city where Haiping is resident (Jiangzhou). The parents agree, but there is little time to study before the test [gao-kao]. Her scores on test will determine where she attends.

6 months later
Mother takes Haizao out of house saying “take care of your train ticket and money. Listen to your sister. Call home often. You hear?”

Back in Jiangzhou.
Lots of lights and foreign stores. Haizao is excited, “it’s so bright, much more light than back at home”. [A white (Jinjiang) taxi rolls by, and a “Dazhong” taxi is in foreground—absolutely Shanghai since these are exclusively Shanghai taxi companies]

Haizao is staying with Haiping and man [Su Chun, (苏淳)]. She makes fun of Haiping for saying "our family" "your family" even though Haiping is not married, and she pulls out a package of condoms, and laughs. Man says that if Haizao doesn't tell her mother, when they have a big house, they will reserve a room for her.

As they go to sleep, Haiping says: "Don’t worry Haizao. In a short time, in a city this big, your big sister certainly will have an apartment of her own, a family of her own. What others have, I will have too."

4 years later
Haiping’s hair has been cut short.

Haizao: "If we go back home we will have a big house and mom will make food everyday"

Haiping: "I don't want to be the frog at the bottom of the well. We all have to struggle (奋斗). It is important. Do you know how a frog dies? (how?) Boiled to death by warm water. Boiled to death by very comfortable warm water."

After graduating university, Haizao comes to live with Haiping again while she looks for a job. Su Chun agrees (Haiping and Su Chun are married now) and there is some conflict because Haizao is not very enthusiastic about looking for a job, and Haiping's husband wants to have sex with her but she refuses him since Haizao is sleeping in the same small room.

After an incident where other residents confront Haiping about her sister not paying a share for collective water and gas, Haiping becomes angry when eating dinner with Haizao and her husband. She says, sighing heavily, "I don't believe that, in a city this big, so many people can make it but we can't. So many people can live on but we can't. Not only do I want to live on, but I want to live well. I cannot believe that my future will only be in this rickety longtang reduced to the same class as those old women-clerks from the first floor, hourly workers from the second floor, and canteen cooks from the second and a half floor. My future will be better than theirs.” Haizao nods enthusiastically, Su Chun looks startled and starts to eat, and Haiping stifles a sob. Su Chun comforts Haiping calling the old women “buttinskyies” (bapo 八婆).

Haizao meets a man, who she calls Lei Feng [who is Lei Feng?], who lends her his umbrella. He says they work together and she should call him Young Bei.

At the end of the episode, Haiping and Su Chun are looking at apartments. They find a place near an airport (obviously, Hongqiao), but Haiping worries that it is too far away from potential jobs. Su Chun asks her if she wants an apartment that belongs to herself or a job that involves moving back and forth. “Apartment! (fangzi 房子)”. She says an apartment and pats her stomach, which has grown large with child.

Wo Ju – Snail Space 蜗居

2010-02-10T23:43:00.000-08:00

The sitcom/soap opera is 33 episodes (45 minutes each) based on the novel “Wo Ju” (translated by its publisher as “A Romance of House” and by the television producers as “Dwelling Narrowness” but I prefer my translation “Snail Space”, which is more literal, or even “Wo Ju” (wo 蜗is snail, ju 居 is house or residence). Perhaps “Snail Shell” would be better.

Image of original novel cover

As of 11 February, 2010, it has been broadcast 133,486,552 times on Youku here

Image of sitcom cover

I will post a partial summary and some interesting aspects of each episode -- one of my projects for New Year’s.

3.41 Billion! Huangpu Land Kings

2010-02-09T01:59:00.000-08:00

Cover photo and story from Oriental Morning Post

The land lost 1 billion RMB in value over 2 years (it was returned because of a delay due to subway station being built)

and

the winning bidders, who outbid two Hong Kong real estate companies, were two Shanghai state-owned enterprises including, particularly, "New Huangpu Group", a company listed on the Shanghai Securities Exchange and owned by the Huangpu district SASAC (state assets supervision and administration commission), trading code 600638.

Here is a translation:

3.41 Billion! The Former Huangpu Land King Falls Thirty Percent
Link is here

The New Huangpu (Group) Limited Liability Company, a company under the control of the Huangpu District SASAC (Shanghai), and Shanghai New World Share Limited Company joined together yesterday to purchase the land parcel at the 163 neighborhood of Nanjing East Road in Huangpu District for 3.41 billion yuan in an auction (see photo). The auction had only three participants but went through 41 rounds of bids before it quietly came to an end. The parcel is still the “sole king of land prices in China” but it fell thirty percent from its initial price of an astronomical 4.404 billion yuan two years ago.

Is Google too "CNN"?

2010-01-16T15:38:00.001-08:00

(Commented from 1 km from Google China HQ)
In an article titled “Chinese Site Criticizes Investor for Its Google Support”, long-time China hack David Barboza does his best Lou Dobbs impression (here: http://www.nytimes.com/2010/01/17/world/asia/17google.html):

“Because of those attacks Google has said it has grown increasingly worried about Beijing’s restrictions on its operations in China and has threatened to pull out.”

On the one hand, attacking email accounts of U.S. human rights critics has little, or nothing, to do with business in China. The use of search, Google maps, Google scholar, and online books and other Google China Internet applications by business and consumers is completely separate from any attacks that may be instigated by individuals/organizations in the country where these products are developed. Indeed, if the criterion for “leaving China” is that individuals/organizations in China attack Google and users of Google, or violate ill-defined "Internet rights", then by this logic Google should also leave any other country where this takes place. Google should, also, remove products and services to Iran, North Korea, Sudan, Venezuela, Afghanistan, Pakistan, Nigeria, Yemen, Sri Lanka, Saudi Arabia, Myanmar... perhaps even Russia, Australia, and France.

On the other hand, Internet search restrictions in China are legal, passed by a sovereign government and applicable to all. Google, a U.S. corporation, is threatening a community of users in China, including U.S. citizens, in order to influence laws passed to protect national security. Whether or not “security” is threatened by Internet searches is certainly a question for domestic debate: Green Dam was eventually dropped as a required installation for PC manufacturers; rioting in Xinjiang earlier this year resulted, in part, from Internet portrayals of a fight in Shenzhen. Further, the People’s Congress and executive arms of government review the applicability of laws on a regular basis--something I am certain Google China and Google do not do.

After Lou Dobbs made irresponsible comments about China’s leadership in 2008, Chinese netizens took issue with CNN. A popular phrase at the time was "做人不要太CNN”: One must not be too CNN in interactions ( a variation on the phrase popular in 2004 from the movie Mobile Phone “One must act humanely interactions” (做人要厚道)). Given Google’s motto, one would imagine they would be more interested in acting humanely rather than acting “CNN”. Instead, it seems Google has caught the increasingly widespread disease of moral certitude. Flying too close to China, then, may have melted Google China’s wings, but history has shown that hubris has a way of coming back to bite.

Google China

2010-01-14T09:37:00.000-08:00

A moment of silence.

40 Million Views of Sitcom "Housing for a Snail"

2009-12-07T03:00:00.000-08:00

蜗居: Housing for a Snail

As of today, December 7, 2009, the Chinese sitcom “Wo ju” or “snail-house” has been viewed 41.98 million times, up from just under 30 million yesterday, on Youku--one of the top streaming video sites in China. (Source: Youku website, www.youku.com, videos/sitcoms; the awkward translation into English is “Dwelling Narrowness”).

The popularity of the sitcom arises from its topicality, that is, the toils and troubles of buying a house for ordinary people in China today. Depending on statistics that are used to calculate, the average ratio of yearly income to housing price is somewhere around 40 to 1.

Wo Ju is based on a novel by the author Liu Liu published in 2007. The story is of two sisters, one of whom purchases a house with money borrowed from relatives and loans. In order to pay back the debt, the younger sister has an affair with a government official who pays off some of the money.

As with all television programs, it is flattering and appealing to its audience, which is why it is so popular with white-collar workers who are more likely to be on the Internet and watching Youku in the first place.

Yet the phenomenon of house slaves “fangnu” or 房奴 is alive and well in China today. The introduction of economy housing in Shanghai will have an effect, but given the large size and ability of consumers and investors to “play” the market, these will end up as investment and speculation targets without doubt.

Would be worthwhile to put the series into English, but there are no resources at the moment. Below I am pasting the summary in Chinese from Youku (http://www.youku.com/show_page/id_zcc16fae6962411de83b1.html):

蜗居
33 集全

简介: 郭海萍自从大学毕业留在上海生活便打定主意存够付首期的钱就买房子。但看来看去那些房子总不能令她称心如意，海萍就这样和丈夫苏淳在一间租住的只有十几平米大的小房子里生活了五年，两个人从恋爱结婚到女儿冉冉出世都是在这间小房子里度过。突然出生的孩子已经让夫妻俩手忙脚乱，再加上来帮忙的外婆这空间就显得更加拥挤，海萍只好让她妈把冉冉带回老... 郭海萍自从大学毕业留在上海生活便打定主意存够付首期的钱就买房子。但看来看去那些房子总不能令她称心如意，海萍就这样和丈夫苏淳在一间租住的只有十几平米大的小房子里生活了五年，两个人从恋爱结婚到女儿冉冉出世都是在这间小房子里度过。突然出生的孩子已经让夫妻俩手忙脚乱，再加上来帮忙的外婆这空间就显得更加拥挤，海萍只好让她妈把冉冉带回老家照顾，自己立刻回去上班，继续存钱准备买房子。女儿毕竟是自己身上掉下来的肉，海萍对冉冉的思念与日俱增。为了省钱存钱，她节衣缩食，甚至限制自己打长途电话的时间和回老家次数，但心里的那份记挂是怎样也限制不了的。与冉冉相隔千里的日子郭海萍熬了将近三年，这三年海萍省吃俭用过得很艰难。

　　终于，郭海萍等不下去了，因为冉冉已经快要不认识她了。为了把女儿接回身边，海萍决定要立刻买房子。可今时不同往日，上海的房价已经在日日攀高，他们两口子的存款离首付还有太大的距离。除了存款，海萍打算她和苏淳都再问各自的父母拿一部分钱，最后还差两万块她只好向妹妹郭海藻开口。比她小七岁的妹妹郭海藻与海萍一直相依为命不分你我，姐姐缺钱，海藻二话不说就把自己仅有八千块存款都给了她，不够的又问男朋友小贝把他们存着准备结婚用的钱也拿了出来。郭海萍选好了一套全新的房子，只等苏淳家里的那笔钱一到，首付就能交上了。苏淳心里很矛盾，他一面觉得家里条件不好存钱不容易，自己没尽到孝道不说还要再伸手向父母要钱，实在开不了口。可另一面又是老婆几次三番的催促，付了首付就能让他们从房子的困境中解脱出来。终究苏淳还是没有向家里要钱，向来老实本分的他选择了从朋友手里高息借贷，还瞒下了海萍钱的来历。苏淳如何也想不到自己情迫无奈借下的这笔钱，会给这个家给周围的亲人带来了多大的变化。当郭海萍知道已经交了房款首付的钱里有六万块是丈夫借来的高利贷时，她几乎要发疯了，绝望的海萍要与苏淳离婚。从小到大都是海萍在妹妹前面遮风挡雨，现在她彻底被房款的事弄得接近崩溃，海藻认为这次她必须站出来扶住姐姐不让她倒下。可小贝却不那么想，他没有同意再拿钱给海萍，还说这是海萍虚荣的代价。小贝不能理解海藻心里的感觉，从父母意外的背上违反计划生育的负累将她带到这个世界开始，郭海藻就是多余出的一条命，是因为姐姐才留下了她这条命，也是姐姐悉心照顾了她这二十五年，总之这份感情是让海藻为了姐姐去死她都愿意的。心急加上气愤的海藻咬着牙去找了宋思明借钱，其实她和这位宋先生只在应酬的场合中见过几次，但海藻一开口宋思明就爽快的答应了。这难住了郭家姐妹的六万块钱对于宋思明来说，根本不放会在眼里。此刻，他眼里只有郭海藻，这个令他魂牵梦萦的小女人，不过海藻并不知道这些。当时海藻只知道为了能帮姐姐解困，她不惜一切。

　　高利贷的钱虽然还了回去，但海萍心里的怨气并没有减退，苏淳也自知理亏。婚倒是没有离，但两口子陷入了从没有过的长期冷战。夫妻感情并没有影响到海萍工作的热情，宋思明有个叫MARK的外国朋友想找家教学中文，海萍想着尽快存钱还款便硬着头皮接下了这个差事。在海萍的努力付出下，MARK的中文水平有了很大突破，也排除了当初对海萍教学能力的疑虑，这令海萍大受鼓舞。可还没有时间喘口气，麻烦又来了，郭海萍租住的房子要被强制拆迁，必须得立刻找地方搬走。宋思明给了海藻一套空着的房子让海萍暂时住进去，正好也离MARK家比较近，方便她去上课。海萍和苏淳抱着重重的疑虑还是搬进了这套对他们来说富丽堂皇的公寓，一时间好像什么麻烦都没有了。海萍卯足力气开始她的新生活，工作兼职两不误。但与此同时，海藻也开始了一种她从未体验过的日子。在与宋思明意外的共度一夜之后，两人的交往从舒适变为尴尬。而现实中宋思明像是一个巨大的隐形人在后面结结实实的撑着她，海藻感受到了小贝如何也给不了她的那份支撑，这个沉稳又浪漫的男人已经在渐渐征服她的心。

Cutting off Black Taxi’s Fingers

2009-11-29T18:15:00.002-08:00

Sun Zhongjie, a company driver for a construction company in Shanghai, set off to pick up a co-worked getting off work on the night of October 14. Along the way, he was stopped by a man in the street who was shivering, said he had been waiting for 1 hour for a taxi, and was trying to get somewhere urgently. As the location was along his route, Sun agreed to take the man.

A key aspect of this, from my perspective, is that it occurred in the former Nanhui District of Shanghai, now absorbed into the increasing massive Pudong (with a population of over 4 million by the end of 2009). This is an area often called a “suburb” by geographers of China—it is far from the city center, and outside the “Outer Ring Road”. These areas are often sparsely developed, and have their own “district” taxis that are not allowed inside the Ring roads. Further, a license plate, which in Shanghai 2009 goes for over 30,000 yuan at auctions, is much cheaper if one buys one that is valid outside the Outer Ring only. That, plus a cheap QQ automobile, selling for about 20,000 RMB, allows one to operate a business as a “black” (illegal and unlicensed, not paying taxes) taxi driver. This occurs not only in Nanhui, but in Minhang, Songjiang, Zhabei, and other areas far from the center of “urban” Shanghai.

Another key aspect of the context for this incident is a current drive to eliminate black taxis before the World Expo by the Shanghai government. On the news nightly there are stories and reports about how black taxis clog the roads and are difficult to catch (since the passenger does not admit they are paying the driver, and the driver doesn’t admit he [mostly male] is being paid to drive.

Hence the method for catching black taxi drivers is to “fish” (diaoyu) for them. Typically, this means an enforcement officer will “hire” a taxi to take him somewhere, sometimes the traffic enforcement station, then pay the driver. After which, the officer arrests the driver and fines them 10,000 RMB.

On October 14, Sun was not a black taxi and did not solicit his rider. Instead, the passenger rode with Sun for a few kilometers, then threw money at him and took his keys. The company van was impounded in lieu of the fine.

Sun was distraught. At his dorm that night, to prove his innocence, he cut off his little finger.

The fallout has been a backlash against this type of “fishing” enforcement (it is literally fishing, 钓鱼, in Chinese but can be translated as entrapment in English).

Unmentioned, and in my mind more important, is unnecessary campaign to eliminate black taxis. In Shanghai, there are close to 50,000 taxis. The top five companies and their colors are Dazhong (aqua), Qiangsheng (yellow), Bashi (green), Haibo (blue), and Jinjiang (white). They are all owned by the local Shanghai government. There are also small company and individual proprietorship taxi companies. However, the taxis are concentrated in the city center—since center residents are wealthier, and there is more demand. The lack of sufficient transportation infrastructure and taxis in the “surburban” areas, outside the Outer Ring Road, outside the core urban area, leads to a need for black taxis.

Instead of satisfying this need, the campaign is targeted at eliminating the supply. This lead to the loss of Sun Zhongjie’s finger, as overzealous enforcement of something demanded by ordinary people and operated by hardworking black taxi drivers (mostly migrants) lead to a tragedy.

Background of story from China Daily:
http://english.people.com.cn/90001/90782/90872/6794803.html

Disney’s Land in Shanghai

2009-11-29T18:15:00.001-08:00

The area of land approved for Disneyland in Shanghai is contained in a document issued by the Shanghai Municipal Planning and State Land Resources Administration Bureau. The document is numbers Shanghai No. 480, and targets the area of Chuansha Town (this area is close to Shanghai Pudong International Airport, and is only known to me because if you take a taxi from Pudong International and say that you are going to “Chuansha”, the taxi queue manager will give the driver a ticket to skip the queue upon return since Chuansha is too close to the airport, and taxi drivers wait from 4 to 8 hours for a customer from the airport).

An announcement on the document can be found here (in Chinese):
http://www.shgtj.gov.cn/ghsp/ghxk/ghxkz/200911/t20091126_333459.htm

According to publication, the total area is 4.12 million square meters, of which 2.23 million are awaiting requisition, meaning that people are still living there. Interesting, after the public announcement of Shanghai Disney, there has apparently been a flurry of building in the area designated for development. Farmers in area view this as an opportunity to increase the amount of compensation owed them, since compensation for relocation is often based on the total area of housing.

Story from Shanghai Daily on Shanghai farmers building on Disney’s land, post-announcement: http://www.shanghaidaily.com/sp/article/2009/200911/20091112/article_419234.htm

This should dispel the idea that farmers being kicked off there is a one-sided process where innocent rural subjects are deprived of land and life by a totalitarian or authoritarian government. Clearly there are multiple tactics, illegal in this case, that farmers adopt to slow and make difficult the process of urban development.

Denouement on Yide and Zhou Xiaodi

2009-11-29T18:15:00.000-08:00

Once ranked on the Hurun Report as one of China’s biggest philanthropists, Zhou Xiaodi has finally been sentenced to serve 14 years in jail as the result of real estate dealings in Shanghai. The sentence was handed down on November 5, 2009.

See the news article from the Shanghai Daily here:
http://www.shanghaidaily.com/sp/article/2009/200911/20091105/article_418540.htm

Interestingly, as well, is that his sentence included a fine of 300 million RMB, or 44 million USD.

The story dates from the days of rural Shanghai and lax oversight of property market in Shanghai. In 2001, Zhou’s real estate company “bought” land from Shanghai County (which was subsequently abolished and absorbed by Pudong New Area) in the Sanlin area. This area has been left undeveloped for 8 years, precisely because of dealings overtaken by Zhou. His position of influence with the local government allowed him to elude government land development requirements.

After his obtaining of the use rights for the Sanlin area, Zhou then sold off parts of the land to investors from Zhejiang and Jiangsu, keeping only one part of the land—designed as land for housing people dislocated by the Shanghai Expo—for himself. Despite paying for their shares in a Shanghai property market often closed to outsiders, the Jiangsu and Zhejiang investors were never given legal rights to build on the land. Years later, Zhou again sold the right to develop and manager property on the land.

In total, Zhou made hundreds of millions of RMB as a result of obtaining land use certificates from the government. The spectacular thing is that Zhou did not invest any of his own money, or actually do anything with the Sanlin land, in making this money.

His legal troubles occurred when he hired migrant workers to beat a representative from the Zhejiang investor who was trying to get compensation from their investment back. Yin Minghua, the victim of the beating, had already helped the Jiangsu investor sue for a return of their original investment. A full investigation was undertaken but has not been publicly disclosed due to the connections to multiple levels of city government, importantly including the PSB, to the case.

As is often true of wealthy entrepreneurs in China who obtain their wealth by shady means, Zhou undertook a multitude of socially responsible actions. Besides donating large amounts of money, which put him on the Hurun list, he also set up a university and hospital, both affiliated with prestigious institutions in Shanghai, in Pudong.

Zhou’s company still has a website that can be found here:
http://www.zhougroup.com/english.htm

Mr. Tao or Mr. Tan -- An Investigation of Corruption in Shanghai

2009-08-14T06:41:00.000-07:00

这个处长收了29套房全登记在母亲名下还说是经商所得

This Section Chief Took 29 Housing Units
All Were Registered in His Mother’s Name
He Said, Everything was Earned in Business Dealings

August 14, 2009
Oriental Morning Post, Page A2-3
http://epaper.dfdaily.com/dfzb/html/2009-08/14/content_152222.htm

[Mr. Tao -- reference is the name of the person under investigation;
Mr. Tan -- an invented reference to tanwu, the Chinese word for
embezzlement.]

Investigators accuse Tao Jianguo of using the advantage of his position from 1999 to 2008 to seek benefits for others, in total taking bribes of 1.06 million yuan and 29 units of property worth 13.79 million yuan from real estate developers. In court, Tao Jianguo admitted, he “took the stated money,” but he argued that all permits went through proper legal auditing, and the money he received was from business dealings.

OMP Reporters, Gu Wenjian and Jia Shuangshuang
Interns, Wang Liangchen and Xu Shaoming
　　
The investigation into Section Chief Tao Jianguo, head of the planning and construction section of the Shanghai Waigaoqiao bonded area management committee, for taking bribes worth over 14.85 million yuan (including 29 units of housing) by the Pudong New Area people’s protectorate has come to an end. Yesterday, there was a hearing on the case at the No. 1 Intermediate People’s Court of the Municipality. In court, Tao Jianguo did not admit to “being bribed”, and instead alleged that the source of the bribery funds was “earnings from business dealings”. As for his behavior at his post before the case, Tao Jianguo emphasized that he “audited according to the law”, and that he “did not use his post to conduct business”. It is reported that the hearing will continue for another two days before a date is set for announcing the decision.

Accepted over 14.86 million yuan

Yesterday 9:45 am, No. 1 Intermediate People’s Court of the Shanghai Municipality

Tao Jianguo is wearing glasses while in the defendant’s dock, his expression is haggard.

From 1999 to 2008, Tao Jianguo successively held the positions of assistant to the section chief and vice-section chief, city and town construction management section (village and town planning section) of the Shanghai Pudong New Area bureau of rural development, and of responsible party and vice-section chief, planning construction and environmental management section of the Waigaiqiao functional regions management committee, Shanghai Pudong New Area. However, Tao Jianguo used the advantages of his post to seek benefits from others in his work as the examiner and approver of land construction planning certificates and construction engineering planning certificates in construction and engineering projects undertaken in his area of jurisdiction.

It is understood that Tao Jianguo accepted total bribes of 1.06 million yuan from a company representative surnamed. Hong of Shanghai Shen’gang Real Estate Company, Limited and Shanghai Xingdu Real Estate Development Company, Limited, as well as other companies’ representatives surnamed Xu, Lu, and Zhang. He also accepted 29 units of property as a bribe from a person surnamed Hong, with a value of over 13.79 million yuan. Because the bribery amount from people including the one surnamed Hong is large, this has been called “the biggest suspected bribery case in Shanghai for 2008” by investigators.

Property registered under mother’s name

In 4 actual instances of accepting bribes, the biggest amount came from a person surnamed Hong for 690,000 yuan and 29 units of property.

The indictment reads that from 2000 to 2008, Shanghai Shen’gang Real Estate Company, Limited and Shanghai Xingdu Real Estate Development Company, Limited developed projects including Shuguang Gardens, Shuguang North Gardens, and Shuguang East Gardens, as well as the Chuansha Town Wangqiao market for exchange of production materials and the Heqing Town petty commodity market. After receiving multiple bribes from a person surnamed Hong, Tao Jianguo provided assistance in the examination and approval of the Planning Permits for Land for Construction Use and of the Planning Permits for Construction Projects.

During the hearing Tao Jianguo revealed that among the 29 units of property there are townhouses, storefronts, and apartments. Besides the townhouse that is used as a residence, most of the property is rented out. All 29 units of property are registered under the name of Tao Jianguo’s mother. Tao Jianguo explained this by saying that, after 2003, because civil servants were not allowed to start companies or engage in related business activity, and because he worried about breaking principles, he transferred the titles to his mother’s name. “My mother didn’t know there was so much property under her name,” Tao Jianguo said.

On August 27, 2008, Tao Jianguo was accused of double designation by departments of the Commission for Inspecting Discipline. On September 3, Tao Jianguo was detained on the suspicion of accepting bribes by the Pudong prosecutor’s office, and he was arrested on the 12th of that month.

The “proceeds from business dealings” argument

Yesterday during the hearing, Tao Jianguo “objected” to most of the accusations.

Tao Jianguo said that he had participated all along with Shanghai Shen’gang Real Estate Company, Limited and Shanghai Xingdu Real Estate Development Company, Limited in business. The 690,000 yuan from someone surnamed Hong and the 29 units of housing were all “proceedings from business dealings”.

In explaining his participation in the business activities of the two above companies, Tao Jianguo said that although he did not have a position in either of the two companies, he did participate in the operations of the board of directors, and engaged in “establishing of company projects” and “establishing of land and property sales companies”, as well as the work of founding and disbanding companies. In addition, Tao Jianguo described in his own words how he adopted a method of “real estate mortgage” and infused financing into Xingdu Company that had yet to be founded.

Tao Jianguo argues that of the 690,000 yuan that the person surnamed Hong gave him, 490,000 yuan was severance pay from Shen’gang Company, and the other 100,000 yuan was a subsidy from the yearly meeting of the board of directors. As for the 29 units of property under suspicion, they were dividends of 5 shareholders resulting from business operations, and are the result of investment. “The townhouse is one unit of the shareholder’s portfolio, and the geographic positions are all in one place,” Tao Jianguo said. “Many of my family have participated in the finance and sales company operations of Shen’gang Company.”

Tao Jianguo thinks that while planning permits for land for construction use and for construction projects are under his jurisdiction, he all projects were examined and approved according to the law and he did not use “the advantage of his post”, and his income is from “proceedings from business dealings”.

He said that in course of the examination and approval, from the submission of application materials to the auditing, and then to the approval and issue of permits, the entire process takes 10 working days. He was only responsible for providing opinions on the auditing and had no relationship with real estate developers.

Investigators think that Tao Jianguo, as an employee of the state, used the advantages of his post to gain benefits for others and received illegal financial gains of over 14.85 million yuan, a violation of the law.

His lawyer argues:

There is no reason for him to take bribes.

According to the indictment, a person surnamed Hong is the biggest briber in the bribery case against Tao Jianguo. It is understood that the two met in 1997. Tao Jianguo argues that he did not accept bribes, and instead he was a shareholder of two real estate companies and the money was the legal outcome of business dealings. Because state civil servants and their immediate families cannot be shareholders in companies, they use the names of their relatives to invest. But the person surnamed Hong denied the above facts when testifying to the authorities. He said that he doesn’t know “Tao Jianguo’s relatives”.

Tao Jianguo’s lawyer thinks that Tao Jianguo is an invisible shareholder, and that he used his relatives’ names to hold shares in the companies. As for the “generosity” of the person surnamed Hong, the defendant’s lawyer said that Tao Jianguo is only one of many section-level officials responsible for the chain of examination and approval of planned real estate projects. His grade is not high. Hence, he lacks sufficient decision-making authority. So he has no reason to “wantonly accept bribes”.

The defendant’s lawyer thinks that, while Tao Jianguo had a large amount of property, it was not “bribery”, and in fact this precisely corroborates that Tao Jianguo participated in the business operations of the companies. And for this reason, he was entitled to receive property and cash. But according to the testimony of the person surnamed Hong, Tao Jianguo not only accepted bribes, he actively “sought bribes”.

Pudong Commission for Inspecting Discipline:

Because of the property the case was brought

Yesterday, a reporter sent a telegram to the construction planning and environmental management section of the Waigaoqiao Functional Regions Management Committee. A worker at this section said they were “not clear” about this issue. Nor did they leak any details about related particulars.

A worker in the Pudong New Area Commission for Inspecting Discipline said that the Tao Jianguo case began because of a “property” problem, and the “relationship” with Shanghai Shen’gang Real Estate Company, Limited and Shanghai Xingdu Real Estate Development Company, Limited. But after the investigation, the Commission for Inspecting Discipline thinks that Tao Jianguo was not a “shareholder” of either of the companies.

Pan Shiyi, Land Kings, and Drunk Driving

2009-08-11T07:32:00.000-07:00

潘石屹：央企拿地王好比酒后驾车

Pan Shiyi: Central SOEs Becoming Land Kings is Like Driving Under the Influence

http://epaper.dfdaily.com/dfzb/html/2009-08/11/content_151251.htm

Couldn’t resist translating this one. Today’s Oriential Morning Post, August 11, 2009. Pan Shiyi is prolific blogger and commenter on real estate industry (as well as being Chairman of Soho China (Hong Kong listed, code 00410)). BTW, here is link to Pan’s blog:
http://pan-shiyi.blog.sohu.com/
Unfortunately, only in Chinese. Very interesting cartoon posted today related to government departments conducting land auctions above the table and “behind closed doors business” under the table. (See http://pan-shiyi.blog.sohu.com/129352411.html)

OMP Reporter Liu Xiuhao
　　

Having just returned from an observation trip, the chairman of SOHO China (HK 00410) yesterday renewed his regular Internet chats. In regards to the recent appearance of multiple land kings, Pan Shiyi again said something amazing, that these companies are “creating a bubble for short-term benefit.”

Pan Shiyi expressed that the main reason for the appearance of land kings is that for some large SOEs, in the current background, it is easy to obtain financing and their costs are low. But, turning land into sales revenue and profit requires specialized knowledge and experience, requires a grasp and understanding of the market. These large, state-owned enterprises that have suddenly entered the real estate industry must be very careful about this to avoid an enormous waste of social wealth.

In comparing this phenomenon to the recent tragedies from car accidents, Pan Shiyi commented, “there are a large portion of car accidents that are caused by drinking and driving. Some people will disregard their health and other people’s lives in order to gain a moment of happiness. This is the same principle as the market.” “Some enterprises will create a bubble in order to gain short-term benefit. In the long-term, this bubble will certainly pop.”

While Pan Shiyi was abroad, the news of SOHO China acquiring Shanghai Donghai Plaza, owned by Morgan Stanley, was repeatedly hyped. The latest version was a lawyer’s letter that said Donghai Plaza has many problems so its sales has hit at an impasse.

But Pan Shiyi’s answer to this news twisted around the issues. He said: “At present I have not received any lawyer’s letter. I have only seen a public letter and some complaint files to the government departments of SMDRC [Shanghai Municipal Development and Reform Commission] addressing my company through media outlets. I only have four characters [two words] to respond to this issue: No comment.”

Central Shanghai: Land Cost is 70% of Housing Price

2009-08-11T06:12:00.001-07:00

上海内环地价房价比高达70%
Shanghai Land Price Reaches 70% of Housing Price Inside Inner Ring Road

OMP Reporter Liu Xiuhao

Brief article from today (August 11, 2009) about the proportion of the price of land to the price of housing (land is acquired from local state government in tender, auction, and listing that are open to all). Read previous posts about the report by the MoLaR on the constitution of current real estate housing prices and the proportion accounted for by the cost of acquiring land. Their survey was discussed in pervious posts.

http://epaper.dfdaily.com/dfzb/html/2009-08/11/content_151249.htm

Despite the announcement on July 23 by Ministry of Land and Resources that a special investigation shows land prices only make up a 23.2% proportion of housing prices, the Eastern China region and especially the Shanghai area has a rapid rise in the ratio of land price to housing price with the recent dramatic climb of land prices. Fangfang Land Consulting released the most recent quarterly “Long Silver Land Prices, East China Report” yesterday. It showed that of the 16 major urban land markets in the Eastern China region, the proportion of land prices to housing prices is in the range of 30%-50%. Of these, inside the inner ring road of Shanghai the range is 70%. In addition, Greenland Group made a triumphant advance in the land market for the first half of this year, passing Vanke in one sweep to become the new “land king”.

Small and Medium Developers are Even More Radical

Fangfang Property’s land price survey showed that, in July, the urban land price in cities such as Shanghai, Hangzhou, and Nanjing was 40% of housing prices, with certain areas surpassing a ratio of 60 percent. The level of land prices in Suzhou and Wuxi was slightly lower, accounting for approximately 30 percent of city housing prices.

Among these cities, recent land parcels leased by Hangzhou are mostly in the central city, and land price accounts for over 50% of housing price; Shanghai land prices are in the proportion range of 35%-50% of housing prices, but there is wide variation based on the land locations, with those near the inner ring line having a land price proportion of 70% of housing price. This shows the extreme shortage of land resources there. For the outer ring and outside areas of Shanghai, the land price proportion falls to only 40 percent or so.

With continued explosion in commodity housing market transactions, the sales returns for companies are higher across the board than their payments for acquiring land, so there is no financing pressure. Meanwhile, the issue of new land banks is far behind sales turnover rate, so the strong inclination to acquire land affects the predictions for the price of land. A comprehensive look at the companies competing for land in the market in Shanghai shows that large enterprises were relative cautious while small and medium developers were radical, daring to pay high prices.

Vanke is First in Land Acquisition Quantity

In the first half of the hear, Greenland acquired four land parcels on the open market, including office and commercial land in the city center and residential land in the suburbs. The characteristic of different districts and counties in the land bank is very vivid.

While Greenland was wantonly storing up, Dahua and Vanke increased their sales and reduced their land banking speed. Greenland became the new Shanghai “land king” with a total 3.41 million square meters of land bank area. Dahua is second with 2.65 million square meters. And Vanke has fallen to third with total banked areas of 2.32 million square meters.

Nationally, 15 brand-name real estate development companies (Vanke [Wanke], Poly [Baoli], Gemdale [Jindi], China Merchants, Greenland, Dahua, Forte [Fudi], China Overseas [Zhonghai], Jiangsu Xincheng, Greentown, Yanlord [Renheng], Sun Hung Kai [Xinhongji], CITIC Pacific, Hutchinson Whampoa, and Hopson) increased their land banks by 9.40 million square meters in area, with most of the land parcels bought for under 2,500 yuan/square meter. Of these, 5 companies increased their land banks by over 1 million square meters, with Vanke and Poly being first and second in total amounts, acquiring 3.48 million square meters and 1.96 million square meters respectively.

In Vanke We Entrust!

2009-07-31T23:29:00.000-07:00

万科托管“倒楼小区”未倒楼可按市价收购

Vanke Named Trustee for “Collapsed Building Apartment Complex”

Remaining Buildings Can be Sold Back at Market Price

http://epaper.dfdaily.com/dfzb/html/2009-08/01/content_149183.htm

OMP reporter Li Meng

August 1, 2009

This headline appeared on the front page of the Oriental Morning Post today. Vanke is one of the largest real estate companies in China, and its head, Wang Shi, is an entrepreneurial hero (see previous posts on him during Wenchuan earthquake) in China and has climbed Mount Everest. The article reports that Shanghai Vanke will take over as “third party trustee” for Lotus Riverside, the apartment complex where a building collapsed in the Minhang (not Minxing) District of Shanghai on June 27, 2009.

Note: I have noticed that people are referring to the Lotus Riverside apartments in “Minxing” district. Sorry, but the character can be read as both “xing” and “hang”. As anyone in Shanghai knows (or should), there is no such thing as Minxing district, only Minhang District. In fact Minhang District is one of the oldest areas of Shanghai. The majority of people moved to “central” Shanghai 150 years ago—Shanghai is a “new” city in China. However, several hundred years ago, the whole area belonged to Jiangsu Province, and the only two areas of human settlement were “Old Minhang” and Chongming Island. Just FYI – “Minxing” is major linguistic error. :-)

(See the original Chinese version for photograph of collapsed building).

The “Lotus Riverside” apartment complex, where an entire building collapsed in an accident, will be entrusted to a third party, the well-known Vanke Real Estate.

For the buildings that have not collapsed, Meidu Real Estate Company has outlined specific guidelines for three solutions to resolve the issue: owners can choose to have a 5% discount on price and continue with their contracts; they can cancel the contract and have all interest repaid; or they can have their apartment bought by Vanke for the market value on June 27, 2009.

Owners Must Decide Before August 15

Last night at 7:30, the Minhang District news office held its 13th news conference on the collapse of a building during construction of the “Lotus Riverside” apartment complex.

In addition to a complete listing of “Operating Guidelines for Outlined Solutions Concerning Buildings Sold in Advance that Did Not Collapse” issued by Meidu Real Estate Company, the news conference also clearly mentioned that Shanghai Vanke Real Estate Company, Limited would be the third party trustee for finishing construction of the apartment complex.

On July 20, Meidu Company announced “Outlined Solutions Concerning Buildings Sold in Advance that Did Not Collapse” to the public, giving three methods for carrying out contracts. But the solutions were clear at the time that the guidelines for the three solutions would be announced on July 31, and owners could make their decision between August 1 and August 15, 2009.

“Operating Guidelines” contains some additions and goes further in description for the three solutions already announced.
　　
Vanke Will Hand Over Apartments Before May 31 of Next Year

As the third party trustee of “Lotus Riverside”, Shanghai Vanke Real Estate Company, Limited yesterday issued a “Notification”. It contained a guarantee that “apartments with quality up to standard will be handed over before May 31, 2009 as stated in the sold-in-advance contracts.”

Vanke mentioned that the company was invited by Meidi Company to be the third party trustee for the apartment complex construction of Lotus Riverside. Vanke will “assemble a competent team and use much effort and technique to ensure the continued construction of Lotus Riverside.” This company will also provide enthusiastic service to the public and customers, taking on all social responsibility.

Vanke thinks that the Lotus Riverside apartment complex is located in a superior site and has a nice environment. Because of this, Vanke is confident in its ability to ensure improvement of the apartment complex’s environment and construction quality. It will not fail to live up to the expectations of all its customers for a Vanke-quality apartment complex.

At the same time, Vanke expressed that it will work with Meidu Company in the appropriate handling of contracts for housing sold in advance as stated in “Operating Guidelines for Outlined Solutions Concerning Buildings Sold in Advance that Did Not Collapse”.
　　

Solution 1: Return of 5%, Continued Fulfillment of the Sold in Advance Contract

Vanke guarantees that if an apartment cannot be handed over because its structure is not up to standards, the purchaser can cancel the sale-in-advance contract.

For those who choose solution one, Meidu Company will negotiate and sign a “Supplement to the Sale-in-Advance Contract”, and the supplemental agreement will include the following:

1. As a precondition to the purchaser continuing to fulfill their contract, Meidu Company will give up an appropriate amount of profit, that is, give a 5% discount on the total housing price specified in the “Sale-in-advance Contract”. Within 10 working days of signing, Meidu will pay the money into an account designated by the purchaser.

2. Meidu Company promises to continue to fulfill its tasks outlined in the “Sale-in-Advance Contract” according to specified time limits.

3. If the apartment cannot be handed over because its structure is not up to standards, the purchaser can cancel the sale-in-advance contract and their obligations based on entitlements specified in “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines”.

4. If the above situation occurs, the purchaser has the right, according to “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines”, to receive reimbursement for losses or compensation for contract violation. Meidu Company agrees to pay reimbursement or compensation, minus the 5% discount already paid, to the purchaser.

5. Because the purchaser choose and executed “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines” which involve the market value of the apartment, government departments will decide on a organization for this evaluation.

When the “Supplement to the Sale-in-Advance Contract” is signed, Meidu Company will add Shanghai Vanke Real Estate Company, Limited who will also sign the “Supplement to the Sale-in-Advance Contract” and a “Letter of Commitment” with the purchaser. This guarantees that if the apartment cannot be handed over because its structure is not up to standards, the purchaser can choose to execute “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines” allowing payback to purchaser within a specified time frame (from June 27, 2009 to the end of “Loan Contract” fulfillment date) of all bank interest and public accumulation fund interest on loans. If Meidu Company does not have the funds to pay, Vanke Company guarantees that it will pay.
　　
　　
Solution 2: Negotiate Cancellation of Sale-in-Advance Contract, Return Loan and Interest

Refunded amount = [the principal amount already paid by the purchaser (including paid by self and on loan) + bank deposit interest on amount of apartment price already paid] – loan principal and interest already paid on behalf of the purchaser by the Company to the loan bank and/or the public accumulation fund center.

1. For the purchaser who chooses solution two, Meidu Company will negotiate to cancel the “sale-in-advance contract” and “loan contract” with the loan bank, the public accumulation fund center, and (if necessary) the Shanghai Estate Guarantee Company, Limited [www.jiae.com.cn].

2. An agreement will be reached through negotiation with all parties and Meidu Company will sign an “Agreement to Cancel the Sale-in-Advance Contract” with the purchaser. Meidu Company will also sign an “Agreement to Cancel the Loan Contract” with the purchaser, the loan bank, the public accumulation fund center and (if necessary) the Shanghai Estate Guarantee Company, Limited.

3. After signing the “Agreement to Cancel the Sale-in-Advance Contract” and the “Agreement to Cancel the Loan Contract”, Meidu Company will pay all interest incurred by the purchaser that has not been paid as specified in the “Agreement to Cancel the Loan Contract”. Meidu Company will also directly pay funds into the loan bank and/or the public accumulation fund center accounts.

4. From the registration of the notice to cancel the “Sale-in-Advance Contract” and completion of the registration to cancel the mortgage in the “Loan Contract”, within 10 working days, Meidu Company will pay the “due sum of money” to the purchaser via the bank account indicated in the “Agreement to Cancel the Sale-in-Advance Contract”:

The “due sum of money” = [the principal amount already paid by the purchaser (including paid by self and on loan) + bank deposit interest on amount of apartment price already paid] – loan principal and interest already paid by the Company to the loan bank and/or the public accumulation fund center on behalf of the purchaser.
　　
　　

Solution 3: According to the Market Price on June 27, Vanke Purchases the Apartment

The market price differential = the market price as appraised on June 27, 2009 – the total price in the “Sale-in-Advance Contract”.

1. Government departments will appoint an appraiser with valid qualifications who, on August 15, 2009, will appraise the market value of the purchased apartment on June 27, 2009 for those who choose solution three, as well as issue an appraisal report.

2. After the above appraisal report comes out, Meidu Company will negotiate arrangements for the sale with Vanke Company who will return the money to the purchaser who choose solution three. In addition, Meidu Company will also negotiate the cancellation of the “Sale-in-Advance Contract” and the “Loan Contract” with the loan bank, the public accumulation fund center, and (if necessary) the Shanghai Estate Guarantee Company, Limited.

3. Once an agreement has been reached with all parties, Meidu Company will sign a “Third Party Agreement” with the purchaser and Vanke Company to pay back the money. Meidu will also sign an “Agreement to Cancel the Sale-in-Advance Contract” with the purchaser, and an “Agreement to Cancel the Loan Contract” with the purchaser, the loan bank, the public accumulation fund center and (if necessary) the Shanghai Estate Guarantee Company, Limited.

4. After the “Third Party Agreement”, the “Agreement to Cancel the Sale-in-Advance Contract”, and the “Agreement to Cancel the Loan Contract” are signed, Vanke Company pledges to pay any outstanding loans and interest directly to the bank accounts at loan bank and/or the public accumulation fund center as specified in the Third Party Agreement”, and the “Agreement to Cancel the Loan Contract”.

5. After the “Third Party Agreement”, the “Agreement to Cancel the Sale-in-Advance Contract”, and the “Agreement to Cancel the Loan Contract” are signed, and within ten working days of the completion of the condition below, Vanke Company guarantees to pay the “due sum of money” to the purchaser into the bank account specified in the “Third Party Agreement”.

The purchaser, the loan bank, the public accumulation fund center, and (if necessary) the Shanghai Estate Guarantee Company, Limited must complete the registration of notice to cancel the “Sale-in-Advance Contract” and registration of the cancellation of the mortgage in the “Loan Contract”.

6. The “due sum of money” mentioned in the previous item = [the amount already paid by the purchaser (including paid by self and on loan) + market price differential] – principal and interest paid by the Company on behalf of the purchaser to the loan bank and/or the public accumulation fund center.

7. The “market price differential” mentioned in the previous item = the appraised total market value of the apartment on June 27, 2009 – the total price of the apartment in the “Sale-in-Advance Contract”.

At the same time, Meidu Company announced that, as of yesterday, it had sent by mail copies of the “Guidelines” to purchasers. After purchasers receive the “Operating Guidelines”, they can fill out the “Solution Selection Form” and mail it back to “Riverside Lotus” Sales Center, 599 Luoyang Road, Shanghai (Zip: 201100) before August 15, 2009.

Shanghai Apartment Collapse: Investigation Results and Punishment

2009-07-29T20:00:00.000-07:00

闵行倒楼：6人被拘 7人取保候审副区长遭行政警告

Minhang Collapsed Building: 6 arrested, 7 out on bail, vice district chief given administrative warning

http://epaper.dfdaily.com/dfzb/html/2009-07/29/content_148342.htm

In yesterday’s Oriental Morning Post, the results of a government investigation into the collapse of an apartment building in the Minhang district of Shanghai were unveiled. While earlier articles, including the English-language Shanghai Daily, reported that both the development company and the construction company were partially owned by officials of Minhang and of Meilong Town (a town within Minhang, located near the real estate development), yesterday’s investigation announced that those links did not exist (at least now).

Investigation of Developer Meidu Company Shareholder Situation

* Founded in 1995, was originally Minhang District Meilong Town Collective Enterprise
* In 2001, changed system to an enterprise run by individuals [minying] with 24 shareholders registered with Bureau of Industry and Commerce; it is an employee of the Meilong Town Land Requisition Service Office and Xun Hao Properties Limited
* From founding to present 6 shareholders have withdrawn

Shanghai Meidu Real Estate Company

* There are 18 actual shareholders currently
* The 8 shareholders who are town public service personnel have unhooked themselves from their original work unit
* The head of the Meilong Town Land Requisition Service Office, Zhang Jinliang, who is an enterprise employee has already unhooked himself from the town Land Requisition Service Office work. Recently, the organizational system of the Meilong Town Land Requisition Service Office was dissolved and it is in the process of auditing and liquidating assets
6 shareholders are employees of Xun Hao Company will either give up their shares or unhook themselves from Xun Hao Company
* The remaining 3 shareholders are an employee of Zhongxin Construction Company, a sole proprietor, and a retiree.
* The company’s former chairman, Que Jingde, is currently the second-largest shareholder with 15% of the shares
* The company’s former board member and current chairman, Zhang Zhiqin, is the top shareholder, and once was a top executive in Xun Hao Company, holds 64.275% of the shares

July 29, 2009
OMP reporter, Li Meng
　　
At the city government news conference yesterday, the head of the group assigned to investigate the “6 [June] 27” accident and director general of the municipal safety supervisory bureau Xie Liming explained the actions to be taken after investigating the “6-27” accidental collapse of Lotus Riverside building 7. Six people from developer Meidu Real Estate Company and project contractor Zhongxin Construction Company who are suspected of negligence leading to a serious accident have been arrested and are in custody; seven people have been released on bail. The company responsible for the accident, Meidu Real Estate Company, has been fined 1.5 million yuan.

Xie Liming said that, because of his leadership responsibility in ensuring district construction engineering safety, Lian Zhenghua, vice warden of Minhang District, was given an administrative warning. The town chief of Meilong Town, Minhang District, Shi Baoqi and the vice-town chief, Zhou Liang, separately received an administrative demerit and a large administrative demerit.

Xie Liming expressed that the collapse of the Shanghai “Lotus Riverside” building during apartment construction has had a bad effect on society and it is of a very serious nature—an accident with major responsibility by those involved. Currently, the certifications of the developer of the collapsed building, Meidu Real Estate Company, the project contractor, Zhongxin Construction Company, and the supervisory unit, Guangqi Inspection Company, have all been revoked.

According to sources, after the collapse of building 7 of “Lotus Riverside” on June 27, member of the Political Bureau of the CPC Central Committee and Shanghai Municipal Party Secretary Yu Zhengsheng and mayor Han Zheng immediately demanded a full investigation of the reasons for the accident and an accounting of the parties responsible—they pledged to use this as a experiential guide, make it a precedent, and clarify responsibility.

The accident investigation team looked at 21 crucial sections of the engineering process and engineering activities, using surveys of the scene, technical appraisals, investigation of approval process, and close research and analysis.

The investigative team was in Minhang District of over 20 days, interviewed 293 people, and produced close to 300 records. Analysis of the investigation made clear the direct and indirect reasons for the accident, identified the nature and responsibility for the accident, advanced opinions on how to dispose of those responsible for the accident, and improvement guidelines on how to avoid the accident.

The investigative group made clear that the second-largest shareholder of the Meidu Real Estate Company, Que Jingde, is not a civil servant of a state organ, and his role as assistant to the town chief of Meilong Town is the result of Meilong Town party secretary Cai Jianzhong overstepping his authority and instituted after an irregular nomination, nor was it reported to the District Organization Department. The Minhang District Committee has now certified that the institution of Que Jingde as assistant to the town chief was invalid and relevant departments are investigating whether to indict Que Jingde. Cai Jianzhong has been suspended from his duties pending the group’s investigation into overstepping authority and irregular nomination of Que Jingde as assistant to the town chief.

After the investigation and identification of responsibility by the investigative group, it was found that 7 people including Meidu Real Estate legal representative Zhang Zhiqin and Zhongxin Construction Company legal representative Zhang Yaojie have direct responsibility for the accident. They are suspected of committing the crime of negligence leading to a serious accident and the determination of criminal responsibility will be decided by the court. Six of the people are in custody. Eight others have been determined to be negligent, including supervisory unit Guangqi Inspection Company legal representative Wang Jinquan, and they will be fined and lose their labor contracts. Finally, the engineering supervisory unit Xieli Survey Company had a nonzero responsibility in causing the accident, and will be publicly criticized.

Xie Liming expressed at the news conference that other problems and leads related to the collapse of building are valued by the Shanghai municipal council and the municipal government, and will be investigated by the relevant city departments and the Minhang District council and government. After investigation, the results will be evaluated and made public through legal means.

China: Hot Money Blowing Bubbles

2009-07-28T20:44:00.000-07:00

滚滚热钱豪赌楼市泡沫
Surging Hot Money Makes Big Bets on Property Bubble

100 Billion in Foreign Capital “Wheels Around and Strikes Back” in the Second Quarter

Wan Jing
2009-07-29
China Securities Journal, July 29, 2009
http://www.cs.com.cn/fc/03/200907/t20090729_2164954.htm

Apologies for the long article. It is quite interesting look at the surge in “hot money” into China this year, and its effect on the real estate market. Worth the time it takes to read (and a look at the illustration through the link – sorry, can’t upload pictures).

Illustration (by Han Jingfeng): House, “Domestic Housing Market”, Man in house, “Quick, come in out for some shelter”, Traveler, “Overseas Funds” (See http://paper.cs.com.cn/page/17/2009-07/29/B02/20090729B02_pdf.pdf)

“Ever since the lifting of the ban ‘limiting outside commands’ in the Shenzhen housing market in April, there has been a proliferation of property transactions at various ports and the number of Hong Kongers buying property has increased by 20 to 30 percent,” the manager of Shenzhen Futian Port Intermediary told a China Securities Journal reporter. After the steep decline in property prices last year, beaten Hong Kong investors have staged a comeback; meanwhile several high-end housing developments in Beijing have also made sharp allegations that in the most recent period the ratio of foreign funds purchasing housing has risen sharply, of which there is no lack of wealthy Euro-American and middle Eastern investors; and in June, 306 units of luxurious housing were transacted in Shanghai with a price of over 40,000 yuan/square meter, exceeding the total transactions from May, and over 20 percent of the buyers were from overseas…

With the sharp recovery in the housing and stock markets, the hot money from abroad that once momentarily left last year, has now in the second quarter come surging back in carrying 100’s of billions. According to statistics, at the end of June China’s total foreign exchange reserves totaled 2.13 trillion USD, of which a 177.9 billion USD increase came from the second quarter—the trade imbalance accounting for 43.7 billion USD and FDI (foreign direct investment) increasing 21.2 billion USD. According to the current way of calculating hot money, subtracting the increases in trade imbalance and FDI from the increase in foreign exchange reserves, yields an estimate of 122.0 billion USD increase in hot money.

Hot Money Surges in New Attack

According to China Academy of Social Sciences (CASS) Institute of World Economics and Politics researcher Zhang Meng’s analysis, if one deducts the estimated effect of Euro and dollar appreciation, it will explain 33.9 billion USD of the increase in foreign reserves leaving 90.0 billion USD of increase in foreign reserves that lacks a logical explanation—hence the only explanation is that it is the short-term inflow of international capital. According to statistics, from the start of the global financial crisis in October of last year to March of this year, there was a negative value to the inflow of international capital. But in February and March, there was a gradual reduction in the negative value, while in April it suddenly turned position, increasing 32.5 billion USD. May and June continue to increase at high rates.

Of especial importance is that in June the trade imbalance was only 8.26 billion USD, and actually used foreign direct investment was 8.96 billion USD, meaning that in that month the increase of 42.1 billion USD in foreign reserves there is potentially 24.9 billion USD that is entering as hot money. Bank of Communications department of development researcher E Yongjian thinks that there is evidence that hot money from abroad is entering with increasing speed and the liabilities ledger for the central bank is also showing the same trends—short-term international capital has started to increase in the speed of its return.

According to estimates from United Securities, over 120 billion USD in hot money streamed into China in the second quarter, exceeding the previous high point of 73.2 billion USD in the first quarter of 2007. Analysts point out that since March of this year, foreign reserves have been increasing nonstop but the trade imbalance and FDI increases have not clearly improved. The increase in foreign reserves is much faster than the growth in the trade imbalance or FDI meaning that outside funds are flowing in at high levels. United Securities analyst Liu Xiangning thinks the surge in hot money into China is mainly flowing into the property and stock markets—in the first quarter short-term international capital was flowing in at a negative number, and in the second quarter is has become a massive amount, meaning that the sensitivity of these funds is very high.

The poles towards which hot money from abroad flows are concealed. According to this reporter’s understanding, hot money often flows through multiple channels including individual layers and company layers. Individual layers mainly go through private conversion of foreign exchange—in Hong Kong, every individual can change 20,000 yuan (HKD change to RMB) and can remit 80,000 yuan RMB to the mainland. It often happens between Hong Kong and Shenzhen that, because many people are friends and family, there are special groups that convert foreign exchange like ants moving house such that a massive amount of hot money can move in very quickly.

In terms of company layers, the traditional channels for hot money such as “overstating export, understating import, and engaging in fake direct domestic investment” are gradually becoming marginalized. The new, emerging channels for entering the domestic area are technological service trade, importing of luxury items, trading in currencies, individual purchase of foreign currency, FDI capital projects, and underground money lenders [qianzhuang]. Experts point out that the operations of technological service trade and import of luxury items are secret and very difficult to regulate so they are a frequent choice when a large amount of hot money moves in. Currency trading is even more hidden from regulation and can allow hot money to move in both directions, and usually involves a large-scale multinational group that moves funds between its subsidiaries so it can move even faster.

In addition, the FDI approval rights issued by MOFCOM [Ministry of Commerce] might become a bigger and wider channel for the entrance of hot money. In March of this year, MOFCOM decentralized the approval and modification of companies started by foreign investors with registered capital of less than 100 million USD to the provincial level commerce regulators at the location of the company registration. The convenience provided to foreign capital will also provide a more convenient and lucrative operating channel for overseas hot money.

Lurking in the Housing Market

The specter of hot money started appearing in the first quarter in the housing market, and its momentum has intensified in the second quarter. Starting from March, property prices in first-level cities have increased across the board, increasing four consecutive months compared with a quarter earlier and surpassing the peaks of 2007. Part of the push raising property prices in first-level cities is investors from abroad. In addition to that of individuals investing in real estate, hot money also goes through different types of property investment companies and private organizations to enter the housing market.

A long-term study conducted by Centaline (China) Property Research Center shows that: from April of this year, of the three large groups of housing purchasers in Shanghai, namely Shanghaiese, people from outside provinces and cities, and people from HMT [Hong Kong, Macau, and Taiwan] and overseas, the proportion of Shanghaiese has decreased, falling a total of about 5% in April and May with Shanghaiese housing purchasers falling to 85% in May. At the same time, HMT people have taken over to become the nuclear force of the high-end property housing market in Shanghai. Starting from March, HMT housing purchasers increased 25%, 40%, and 43% over three months compared to the previous quarter, matching historical high points from former years.

Centraline property analyst Zhuang Wei expressed that while the market share occupied by people from overseas and HMT is not large, it is much more focused on high-end housing complexes, and places where they invest are sometimes “big money” transactions largely increasing the activity level in the housing market.

After the cancellation of “limiting outside commands”, the Shenzhen housing market has also started to be inundated with Hong Kong investors. According to an introduction by a representative of the Luohu port branch of Shi-Hua Real Estate, compared to April there has been an increase of 20 percent in purchases by Hong Kongers of Luohu port area properties, especially small- and medium-sized layouts of less than 70 square meters near Luohu port. At the Futian port, Futian central area, and Honey Lake [Xiangmihu] luxury residence area, Hong Kongers coming to invest in property have also increased. A China Securities Journal reporter recently visited multiple high-end housing complexes in Nanshan district and discovered that more than a few groups of people touring properties had Hong Kong accents, mostly focusing investment on areas and complexes with future potential to increase in value.

The general manager at the Shenzhen business department of Midland Realty, Jiang Shaojie, expressed that there are low interest rates at Hong Kong banks so funds are looking for roads to invest in the housing market, while at the same time there is a deluge of international hot money, making economically-sensitive Hong Kongers anxious over inflation. After the experience of the financial crisis, many Hong Kongers had severe losses from investment in financial securities hence real estate and gold investment are more in their good graces. But compared to 2007 when it buyers were unstrained with respect to properties, currently Hong Kongers in Shenzhen are reasonable and cautious in their purchases.

The development of the high-end residence market in Guangzhou has also felt the force of funds from abroad. Hopefluent market research department determined that, after 3 successive months in 2009 when the Guangzhou high-end market had approximately 10% growth, in May it sprand 18%. Conducting research on 46 mainstream housing complexes in the central area of Guangzhou, they found that 75% had already returned to 2007 levels. And among investors in these housing complexes, HMT and overseas buyers made up 30 percent and are growing.

Even in the realm of real estate development, restrictions on the entry of overseas capital are starting to being slackened. In May, the Beijing Municipal Land Reserve allowed guaranteed funds in foreign exchange to be used to land transactions, relaxing restrictions on the participation of overseas capital in land bidding.

The Future Might be More Rapid

The argument over whether, behind the dramatic climb in the domestic housing and stock markets, there lies the helping push of a large amount of hot money is currently ongoing. Professor Li Youhuan of the Guangdong Academy of Social Sciences thinks that hot money now is mainly concentrated in Hong Kong and Taiwan, and whether or not a large amount has entered the domestic market requires continued investigation. From April and May of this year, the dramatic climbs in Hong Kong and Taiwan stock markets and housing assets is related to a large influx of hot money, and Professor Li estimates that the scale of the inflow will grow in July.

Haitong Securities financial industry analyst She Minhua also expressed that the recent jump in global stock markets and commodities is mainly because of the strong predictions of economic recovery, along with predictions of inflation. “This is a relatively reasonable reaction. The gains in the domestic stock and property markets are not strongly related to speculative hot money.”

As the first stop in the build-up of international hot money, Hong Kong has relatively clear evidence of overseas funds flooding in. The newest research report from Citibank pointed out that, in the past two months, on average every week the funds flowing into Asian and especially flowing into Hong Kong have already reached the level of funds entering during the peak of the 2007 bull market. Sinolink Securities predicts that approximately 342.0 billion HKD of “hot money” has entered Hong Kong since September of last year, making up 50% of Hong Kong’s base currency, and vastly surpassing historical levels—and Hong Kong’s stock market has during this time recovered markedly.

Hot money has become a wave in Hong Kong and Taiwan, quickly raising the anxiety of whether a large amount of hot money will enter domestic areas. “Today, the eruption in the housing and stock markets has already being going on for some time, but from our inspections of flows in underground channels for overseas hot money, it has only been in June when a real turning point was reached, ending a span from October of last year to June of this year when net flows were outward—they have now turned net inward.” Guangdong Academy of Social Sciences Professor Li Youhuan expressed that in the last three months hot money mainly has been coming from the savings funds and some investment funds of HMT areas. Some overseas Chinese savings funds and a small amount of investment funds have started to enter the domestic market but currently there is no large-scale investment from international investment funds.

Li Youhuan thinks that, as far as the inspection of underground money channels, from April to June, every 10 days the amount of hot money flowing in shows a growing trend—and this has increased even further recently. Using the domestic and international economic development trends to predict, hot money flowing in will speed up in the second half of the year.

Different from the caution of domestic scholars, amidst the large-scale increase in the domestic stock and housing markets, large overseas banks emphasize that further development will become even more ferocious. A chief economic officer at a large overseas bank expressed that China’s housing market has already entered a period of growth, and the second half of the year will be auspicious for the real estate market. With excess liquidity and without a full recovery of the real economy, it is impossible for the government to mop up liquidity in the short term, so domestic housing prices will continue to rise. Unlike the first half of the year when rigid demand provided the impetus, the second half of the year operations from hot money will provide the key driving force in the increase of housing prices.

Zhang Meng, researcher at the CASS Institute of World Economics and Politics, thinks that in the second half of the year China will face an even greater surge in inflow of short-term international capital. With 7.37 trillion in new credit and loans supplied in the first half of 2009, if even more short-term international capital flows in, China’s asset market will be sandwiched between domestic and overseas excess liquidity making it very difficult to avoid a new bubble in asset prices. Of this we should be especially on guard.

Housing Stir-Frying Groups

2009-07-27T23:38:00.000-07:00

谁推高了房价：购房主力是炒房团？

Who is Pushing Up Housing Prices?
Is the Impetus Housing Stir-Frying Groups [chaofang tuan]?

China Securities Journal article from about the origins of rise in urban housing prices. Housing “stir-frying” groups (chaofang tuan, or 炒房团 ) refer to groups of investors, usually believed to be from outside the city where housing is purchased, who come in and scoop up all the apartments for sale, usually before the public is given a chance to buy, and in collusion with the property developer. The lack of supply drives up prices, after which the group sells out making a quick profit. The most infamous “stir-frying” group comes from Wenzhou and is believed to be responsible for Shanghai’s high real estate prices.

Note: “stir-frying” (chao, 炒) is a word in Chinese that applies not only to housing but to stocks, stamps, and other goods (like chaohuo or flipping goods between stores in Zhongguancun). It is sometimes related, in English, to “cornering the market” where a good or commodity of limited amount is bought up and made scarce, raising the price, and then sold back to turn a quick investment. Hence one could argue “stir-frying” is a way to turn a quick profit by quickly “heating” a scarce thing. The link with quick frying in cooking is definitely a component of the meaning. The awkwardness of translation is compensated by richness from the centrality of food to China and the meaning of the word in Chinese.

Original article from CSJ: http://www.cs.com.cn/fc/03/200907/t20090727_2162953.htm

Illustration: Person is “Housing Purchaser”, house reads “Housing Price”, wok reads “real estate market”.

Recently, there have been reports stating “the impetus of housing purchases is still housing stir-frying groups” instilling more than a little surprise in people. The reports refer to an investigation organized by a certain university college: researchers directly surveyed 2,000 consumers in 40 cities by phone and found that 32.1% felt that the next 3 months was a good opportunity for buying housing while 32.7% felt it was a bad opportunity. Using this they come to a conclusion: statistically, since positive and negative views balance, “basically it can be certified that the impetus for buying housing is not from direct consumers but from investors”.

Beginning in September of last year, central and local governments issued multiple control and regulation policies aimed at the housing market, lowing transaction taxes and supporting the purchase of housing by residents. In February the market began to warm and by May and June it became white-hot. According to data released from the Bureau of Statistics two days ago, in the first half of 2009, 14.43 million square meters of commercial residences were sold in Shanghai, an increase of 34.8% over the same period from a year earlier, with a total sales revenue of 168.773 billion yuan, an increase of 88.5%. Sales of housing in stock registered 10.6241 million square meters, an increase of 35.3%. Because real and improved living demand has been unleashed with housing needed for weddings and by students, sales volume has clearly increased and pushed up housing prices. The phenomenon of standing in line to buy housing has appeared at some hot properties. Here, whether it is from the figures of agents or middlemen, it is the end-user buying to live in the property who is the vast majority. Government department spokespeople have also said that it is not investors who are in the majority.

Of course, demand is made up both of consumption by end-user livers and of investment. Mature housing markets are inseparable from these two types of demand. The situation in Shanghai these days results from investment demand that was clearly unleashed in May, while April was the month when real and improved living demands held up the market triggering movement from investors. In the second-hand [used; most housing in China is new] market, investors have either sold out or entered the market. According to statistics from intermediary organizations, in the central areas of certain cities, nine-tenths of owners who sell out originally were investors and they plan to move cash into other investment channels. Meanwhile, long-term property investment at the two levels of 5-6 million yuan and 8-10 million yuan are undertaken by investors entering the market, and their number made up 30% of total transactions of high-end housing in May.

Besides long-term investment, there is also short-term investment. Short-term investors are usually thought of as speculating through stir-frying housing, for example stir-frying apartment patterns [chao louhua; apartment pattern refers to “off-the-plan” property, property that is under construction] or short-term changing hands. Stir-frying apartment patterns means transactions in housing that is not finished, and was once in fashion but is now forbidden by government policy; short-term changing hands means buying and selling quickly when the price of housing is rising rapidly, or buying in a future house and selling once it is finished to reap the price differential.

It is undeniable that over-investment is more likely to create a housing price bubble. Relevant departments have pointed out that an investment proportion restricted to less than 20% is crucial to avoiding risk. Also, it is key to control investors using bank loans to stir-fry housing. This type of behavior has been amply documented, for instance in Shenzhen in 2007 there was a craze in the housing market and statistics show that investors made up 38% of the market.

Ending the sale of unfinished housing, collecting taxes on the sale of second-hand housing, and tightening loans for second apartments are the measures adopted by the government to control investment and attack speculation. But Shanghai annual statistics show that investment in housing accounts for less than 20% of all transactions, and even for some high-level properties it accounts for less than 40%. Some apartment complexes have more than half that are investors but these are individual cases.

The key drivers and majority for housing purchases are the decisive operators of the changes in housing prices. In the housing market of today that has been heating up for less than half a year, saying “currently the impetus of the market is housing stir-frying groups” is an exaggeration.

On July 17, at the Work Meeting to Encourage the Healthy Development of Shanghai Real Estate, the city government emphasized that the supply of land should be increased, with a special emphasis on the supply of land to be used for ordinary commercial residences. Focus should be on encouragement of starting work and making sales while being firm in investigating illegal and out of line behaviors such as holding back on development for increased price and fake transactions. It is clear that the goal is to increase the amount of supply and the speed it is made available. If the current impetus for housing purchases is housing stir-frying groups, that should control demand and restrict the purchase of housing for investment.

There are many problems to research in the housing market but analysis must use practical reality. Reaching foregone conclusions will only mislead consumers and interfere in the implementation of government control and regulation policies.

Ratio of Land Price to Price of Final Housing

2009-07-26T20:38:00.000-07:00

国土资源部：地价占房价比平均23%
Ministry of Land and Resources: Land is only 23% of the Price of Housing

The China Securities Journal (CSJ) and Shanghai’s Oriental Morning Post (OMP) are reporting today (July 27, 2009) on a report by the Ministry of Land and Resources – though the only report I could find on the Ministry website was dated July 3 on “Re-evaluating the link between housing and land prices.” The translation of the OMP article is below.

CSJ article: http://www.cs.com.cn/xwzx/05/200907/t20090727_2162686.htm

OMP e-article: http://epaper.dfdaily.com/dfzb/html/2009-07/26/content_147644.htm

MoLaR July 3 report: http://www.mlr.gov.cn/xwdt/jrxw/200907/t20090703_122457.htm

Basically the report from MoLaR is trying to dispel the myth that rising land prices, as in the price developers pay to local governments for land-use rights, is causing the rise (this year, for the past few months) in real estate and housing prices.

OMP reporter Liu Xiuhao

Since MoLaR announced the fact that “on average 23.2% of real estate prices come from the price of land”, people from multiple circles have raised objections. Two days ago, MoLaR publicly released the data from a national survey of 620 projects to answer the doubts.

The OMP discovered that, of the 620 projects that were investigated, one of Shanghai’s “land kings”, who emerged at the end of 2006, loomed large among them. These parcels of apartments that were once thought to be minimally profitable have, two years later, achieved land price to apartment price average ratio of 28.86%.

Last weekend, the newest residential land king was born in the far suburbs of Qingpu where the floor price reached an unbelievable 14,500 yuan/square meter. People looking back on the old days will discover that, after Shanghai housing prices rose, “land kings” successfully make hefty profits for real estate developers.

Shanghai Index is Slightly Lower than Other Core Cities

MoLaR commented: “the question of what proportion land prices make up of housing prices has been a universally hot topic for a long time. We have always been of the opinion that revealing the actual data and situation is a transparent way to provide understanding of relevant information to society. It is the best method of answering doubts and clearing up debate.”

Over the weekend, MoLaR publicly released a detailed catalog of its national investigation into housing and land price ratios. Among the 620 cases studied, the highest priced housing was 45,000 yuan/square meter and the lowest priced was 1,130 yuan/square meter; land-housing price ratios ranged from a low of 5.3% to a high of 58.6%.

The subject of this investigation was mainly commercial real estate development projects that obtained land and sold housing (including those that have already sold out) since 2006. The housing price investigated was the average sales price at the time the apartment complexes went on sale, and the land price was the price of the land for the apartment complex at the time of the land transaction.

Dividing the results by region in which the real estate project is located, the eastern region [of China] had 316 cases, with a land to housing price average ratio of 27%; the middle region had 158 cases, with a land to housing price average ratio of 21%; and the western region had 146 cases, with a land to housing price average ratio of 18%.

This time, Shanghai had 6 apartment complexes located in Baoshan, Fengxian, Yangpu, and Qingpu. Of them, the lowest land to housing price ratio was 15.19% and the highest was 31.95%, while the average was 26.7%. Compared to the national average, Shanghai has a slightly higher percentage for land price but compared to other core cities like Shenzhen, Hangzhou, and Nanjing, Shanghai still has a slightly lower ratio—making it one of most money-making cities for apartment complex development.

Housing Prices Sour, “Land Kings” of That Year Make Large Profits

Actually, one of the six apartment complexes under investigation was a “land king” born that year. On November 26, 2006, after 176 rounds of fierce contest, central state enterprise China Resources [Huarun] Group’s subsidiary China Resources [Huarun] Land broke free from the stubborn circle of five magnates and raised the final bidding paddle with a price of 1.541 billion yuan for area C2 of New Jiangwan City—becoming a land king.

At the time, a large number of industry representatives were anxious over the future of profits for developers. An estimate at the time was that only with a price of 15,000 yuan/square meter would a modest profit be had, while the price of housing in this area at the time was under 10,000 yuan/square meter.

One year later, housing prices soared. The housing price in the area of New Jiangwan is already twice what it was that year. The apartment complex that was once thought to have only minimal profit now sells for 23,139 yuan/square meter, and the ratio of land to housing price is only 28.86%. A land price thought once to be “astronomical” has already been surpassed by multiple others in the suburbs.

From this public issue of the project information it can be seen that the highest proportion of land price to housing price is found in the Noble Diamond Mansions [Shengshi Baodi] on South Changjiang Road, while the lowest proportion of land price to housing price is found in the Industrial Comprehensive Development Area project of Fengxian district.

Market Supply and Demand are the Ultimate Factors in Determining Land Prices
In issuing the investigation catalogue alongside “Several Issues Concerning the Interpretation of Land Prices” MoLaR made clear that market supply and demand are the factors in determining land prices.

The practice of the land market in China shows that the determining factor on high or low land prices is the ultimate influence the relations of market supply and demand. Land needs are directly influenced by the future predictions of housing price by development companies. In the tendering, auctioning, and listing for state-owned land sales, the different quoted prices from development companies are based on their predictions of future housing prices and expected profits, such that the development company quotes a price based on predicted housing price minus construction prices and profit. Universally good predictions yields fierce bidding and “the highest price wins”, whereas low prices frequently lead to no bidders or no tenders. In addition to factors from predictions, the “astronomical land price” phenomenon, where certain apartment complexes have much higher prices than other apartments in the surrounding area, has appeared over the past few years in certain cities. This is related to multiple factors including the inherent position of the land, the entry of funds from other industries and enterprise financing from listing, and the movement of capital. Of these, the rule that “the better the area, the easier to sell the apartment” is the most important reason that leads to fierce competition between development companies.

Liu Ren Arrested

2009-07-14T07:58:00.000-07:00

Vice President Liu Ren of Oak Pacific (Qian Xiang) Interactive Arrested
Lawyer Estimates He will Squat for 10 Years

Vice President Liu Ren of Oak Pacific (Qian Xiang) Interactive Arrested
Lawyer Estimates He will Squat for 10 Years

Liu Ren in his younger years
http://news.xinhuanet.com/legal/2008-11/21/content_10391510.htm
http://www.morningpost.com.cn/article.asp?articleid=153504#top

November 21, 2008 Beijing Morning Post

Oak Pacific Interactive Technology Development Company, Limited vice president Liu Ren is a well-known figure in the IT industry. One would never have thought that he would become involved in criminal activity—being accused of seeking a “shut-up fee” to delete negative articles about a company. Quickly, the police arrested Liu Ren and two others. Yesterday, this correspondent learned that Liu Ren and the others have been arraigned for the crime of suspected racketeering by the Xicheng (District of Beijing) People’s District Attorney.
The 38-year-old Liu Ren became a reported after graduation from university, arriving at Oak Pacific Interactive in 2005 and becoming a vice-president there. The well-known DoNews (www.donews.com, also written in Chinese as “bullfighter” or 斗牛士) and Mop (www.mop.com, “cat attack” or 猫扑网) are both websites under the Oak Pacific umbrella. The two people arraigned along with Liu Ren are his employee, editor Xu Xinshi, and part-time editor of 17tech (www.17tech.com) website You Yang.
In July, 2008, Liu Ren sent emails to Xu Xinshi and You Yang to post and repost a large number of articles critical of the “Qihoo 360 Security Defender” software product developed by Beijing Sanji Wuxian Network Technology Co., Ltd., as well as articles critical of the president of this company, Zhou Mou. No specific reason was given for this action and Xu Xinshi and You Yang complied. In order to avoid harmful influence, Qi Mou of Sanji contacted Xu Xinshi in early August and asked that the negative articles be deleted from the website. Liu Ren and his two partners asked Qi Mou for a shut-up fee of a certain amount. The two parties negotiated over this issue several times.
On August 23, Liu Ren, Xu Xinshi and Qi Mou meet at a teahouse near the financial district in Xicheng district. They agreed on a fee of 230,000 yuan for deletion of the negative articles. Qi Mou transferred 50,000 yuan into an account supplied by Xu Xinshi on September 19. Liu Ren and others split the 50,000 and deleted the negative articles from the website.
But before long, the negative article reappeared since Qi Mou had not transferred the balance of payments. With no alternative, Qi Mou called the police on September 24. When Qi Mou made an appointment at a Haidian district teahouse to pay another 80,000 yuan to Liu Ren and his two partners, the police arrested the three.

Jaded? A more mature Liu Ren.
Lawyers Explanation
Ma Guohua, lawyer at the Beijing law firm Youtian, told this correspondent that, according to penal code regulations, racketeering for public or private property with for relatively large amount carries a penalty of less than three years in prison, detention, or house arrest; for a massive amount or involving extenuating circumstances carries a prison term of three to ten years. “A ‘relatively large amount’ is one to three thousand yuan; racketeering involving a ‘massive amount’ is at least ten to thirty thousand yuan.” Ma Guohua said that Liu Ren and his partners, if proven to demand 230,000 yuan, will be judged according to the ‘massive amount’ standard, and will be imprisoned for 10 years. Of course, part of the amount not successfully received can be viewed lightly in sentencing.

Liu Ren in his younger years

http://news.xinhuanet.com/legal/2008-11/21/content_10391510.htm
http://www.morningpost.com.cn/article.asp?articleid=153504#top

November 21, 2008 Beijing Morning Post

Oak Pacific Interactive Technology Development Company, Limited vice president Liu Ren is a well-known figure in the IT industry. One would never have thought that he would become involved in criminal activity—being accused of seeking a “shut-up fee” to delete negative articles about a company. Quickly, the police arrested Liu Ren and two others. Yesterday, this correspondent learned that Liu Ren and the others have been arraigned for the crime of suspected racketeering by the Xicheng (District of Beijing) People’s District Attorney.

The 38-year-old Liu Ren became a reported after graduation from university, arriving at Oak Pacific Interactive in 2005 and becoming a vice-president there. The well-known DoNews (www.donews.com, also written in Chinese as “bullfighter” or 斗牛士) and Mop (www.mop.com, “cat attack” or 猫扑网) are both websites under the Oak Pacific umbrella. The two people arraigned along with Liu Ren are his employee, editor Xu Xinshi, and part-time editor of 17tech (www.17tech.com) website You Yang.

In July, 2008, Liu Ren sent emails to Xu Xinshi and You Yang to post and repost a large number of articles critical of the “Qihoo 360 Security Defender” software product developed by Beijing Sanji Wuxian Network Technology Co., Ltd., as well as articles critical of the president of this company, Zhou Mou. No specific reason was given for this action and Xu Xinshi and You Yang complied. In order to avoid harmful influence, Qi Mou of Sanji contacted Xu Xinshi in early August and asked that the negative articles be deleted from the website. Liu Ren and his two partners asked Qi Mou for a shut-up fee of a certain amount. The two parties negotiated over this issue several times.

On August 23, Liu Ren, Xu Xinshi and Qi Mou meet at a teahouse near the financial district in Xicheng district. They agreed on a fee of 230,000 yuan for deletion of the negative articles. Qi Mou transferred 50,000 yuan into an account supplied by Xu Xinshi on September 19. Liu Ren and others split the 50,000 and deleted the negative articles from the website.

But before long, the negative article reappeared since Qi Mou had not transferred the balance of payments. With no alternative, Qi Mou called the police on September 24. When Qi Mou made an appointment at a Haidian district teahouse to pay another 80,000 yuan to Liu Ren and his two partners, the police arrested the three.

Jaded? A more mature Liu Ren.

Lawyers Explanation
Ma Guohua, lawyer at the Beijing law firm Youtian, told this correspondent that, according to penal code regulations, racketeering for public or private property with for relatively large amount carries a penalty of less than three years in prison, detention, or house arrest; for a massive amount or involving extenuating circumstances carries a prison term of three to ten years. “A ‘relatively large amount’ is one to three thousand yuan; racketeering involving a ‘massive amount’ is at least ten to thirty thousand yuan.” Ma Guohua said that Liu Ren and his partners, if proven to demand 230,000 yuan, will be judged according to the ‘massive amount’ standard, and will be imprisoned for 10 years. Of course, part of the amount not successfully received can be viewed lightly in sentencing.

What is Shanzhai?

2009-04-28T07:09:00.001-07:00

山寨, shanzhai, is translated literally as "mountain stronghold" and
colloquially (by Jinshan and Google) as "copycatting".

The NYTimes, on April 27, 2009, published an article by the infamous
China "journalist" David Barboza on "Knockoff Cellphones" (two words
that were, or should be, hyphenated).

Translating ideas from China can be called journalism. In fact, explaining
shanzhai to a rapt audience should make good paper (ironically). But the
DIY list (entitled "The Cost of a Fake") for a non-branded mobile phone
(let's coin "NBMP" for this) caught my attention. Very much like a DIY
PC list, it details the components and their parts by price. Of course,
the assembler (the DIY-er) is making an intermediary fee. $40 for a NBMP
rather than $200 + contract for an innovative, corporate original.

“Legal cellphone makers should pay 17 percent of their revenue as
value-added tax, but shanzhai makers, of course, won’t pay it.”

Really? Add 17% to $40 and you don't get a 2-year contract. The U.S.
cellular phone market is a monopsony -- with hundreds of millions of
buyers but only 4 sellers (AT&T, Sprint, Verizon, and T-Mobile).

Just FYI, the China cell market is dominated by two carriers -- China
Mobile and China Unicom, both state-owned and run, and they are
monopolies. However, the structure of data plans, the delivery of service,
the network coverage, and the cost are far and away better and more
competitive than the U.S. How can this be? Does socialism work for
mobile phones?

In fact, while there are only two carriers for China, there are literally
"a million" phone providers. You or I could produce a mobile phone with
a little capital and an idea. That is a threat to companies who rely on
contracts to ensconce users in expensive plans, bad coverage, and poor
service. And really it is inexcusable. The "free market" and "capitalism"
belies the reality of carriers dictating to the market.

Imagine if mobile minutes were like gasoline. When you are running low,
you stop at the 7-11, the gas station, the post office, the newspaper
stand -- or even the Internet -- to add minutes. Adding one item to your
list, you gain a freedom from contracts, a market in phones, and leverage
with your carrier.

Kudos to shanzhai. Kudos to DIY computer installers. You are the salt of
the earth, and yet in you we find the ultimate check and balance on
corporate domination of markets.

Spring Stocks (蛋黄吃得多)

2009-03-10T08:58:00.000-07:00

Shanghai and Shenzhen were leading the world in stock performance this year.

But hope springs eternal, perhaps for the naysayers of market socialism, aka local state capitalism.

With guanxi relationships blossoming like bamboo shoots after a spring rain, and young men's fancy, perhaps they cannot be blamed.

A national, potentially regional or global, system of market economy based on particularity and schmooze is definitely a challenge to the armchair stock traders who sit in lower manhatten, scoff at labor (and marx), and eat packets of mustard as subsistence.

My contribution: a cartoon from China Securities Journal (CSJ), January 10, 2009, page one (A1):

The cannon, looking lonesome, has a tag around its neck reading:

"Value Investment"
"价值投资"

The man with a cigarette in his mouth, and a tag on his sleeve reading "fund" or "基金", brandishes his sword while viewing a stock market index fluctuating up and down, wildly, stating:

"This year calls for short-term soldiers, with some daily fluctuation buy-sell activity!"
"今年就得短兵，相接做波段！"

And underwater my stocks continue to be.

Obama Error & Circuit vs. Hilon

2009-01-23T12:37:00.000-08:00

The bankruptcy of Circuit City, the second largest eletronics retailer in the U.S., is definitely shocking news in the context of a global financial crisis. That Circuit City, and Best Buy, are my anologies for Zhongguancun's electronics cities, the places where PC's, photocopiers, faxes, and printers are bought and sold in bulk in Beijing, makes cultural translation that much more difficult. In the past, I described Zhongguancun's electronics cities, and those in Shanghai, Shenzhen, and every city in China, as "Best Buy (Circuit City) broken into a thousand pieces". Now, there are only pieces.

I, like everyone, celebrated the inauguration of Barack Obama as the 44th president of the United States. In the past two days, I read about how Tim Geithner, representing the president's views, has stated that China is a "currency manipulator". My ideas of change, like the Circuit City analogy, is broken into 1,000 pieces.

The idea that China is a currency manipulator is NOT (apologies for emphasis) a new idea. The afterglow of the inauguration has lead to a anti-China bedfellow. Actually, despite China's surface hardness and designation as "center" of the world, it has many problems. The problems are far deeper, and more serious, than anything the U.S. faces. If there were a "hard choice" to make, it would not be to hold China to task for currency manipulation; it would be to take the union workers, especially in the auto industry, to task. The auto industry manipulates the economy far more than China does its currency -- and the people who would suffer or benefit (in absolute terms) are in China, not Detroit.

Anyhow, the world is changing. There is a crisis. There is change. But will change lead to efficiency, or to surface change and more of the same. Mr. Geithner seems to be the same old story -- and actually, a silly, pandering capitulation.

One hopes that change does come -- that Circuit City becomes more like Hilon (Zhongguancun's most famous electronics market), and that Obama rejects "common sense" of leftist economics. The former would lead to more efficient and effective markets in electronics; the latter would lead to more just and equitable markets in the world economy.

With only two days in the hole, this is definitely food for thought.

Did Somebody Say Minhang?

2009-01-20T12:02:00.000-08:00

Minhang District Map, in English.
闵行区地图，英文版

Copyright held by Minhang District government, for reference purposes only
闵行区区人民版权所有，仅供参考。

Yiwu Markets

2009-01-07T23:54:00.001-08:00

Yiwu

As a sub-city of the Jinhua municipality, Yiwu is famous for the massive markets in small products for sale. Recently, I visited the International Trade City (guoji maoyi cheng) and walked through stages 1, 2, 3. The market consists of masses of stores and products, all operated by individual-family households (getihu)—a China-specific designation that refers to a private enterprise of less than 8 people. While the majority of customers are from mainland China, there is also a large number of Asian bargain hunters, including those from Malaysia, India, Pakistan, and Russia. The proliferation of overseas purchasers and quality inspectors reveals, as well as dozens of hotels (and not much else) scatted around the Trade City give testament to the product-market role of this area of the city.

To understand something about the market, and try to make comparisons with the massive “electronics cities” located in Zhongguancun but also in cities throughout China, I decided to search out a pen with a laser pointer. In Shanghai, I had found a simple laser pointer in Bainaohui Electronics City at a friend’s store for the unfriendly price of 100 RMB ($14.60, using 8.63 as an exchange rate). In the first pen store I found in the market, I inquired about the price of a laser-pointer pen. “3.80 yuan, lowest price” said the shopkeeper, taken aback at my Chinese but responding quickly and firmly. Eager for the great deal, I began to pull out a 5-yuan note. “Wholesale,” interrupted the shopkeeper, “that is the whole sale price.” “Oh, how much for just one,” I asked. “Don’t sell [that way],” ended our interaction. At another pen store, I found the same laser-pointed pen and a similar price, 4.30 yuan. I asked if they sell retail or individually. “No, that is just a sample (yangpin).”

My failure to buy the product revealed one of the prevalent, though not rigid, characteristics of product markets at the Trade City: it is a wholesale operation, where the stores are a front for a network of factories and shipping that stretches from the Yangtze River Delta (Changsanjiao) to the Pearl River Delta (Zhusanjiao). The stores that quoted me a 4 yuan price for a pen with a laser pointed wanted a minimum order of 1,000 units to give me the wholesale price, otherwise they wouldn’t sell (I did convince another shopkeeper to sell me the pen for 5 yuan). Another product I investigated was a pen that can record 2 GB of video (of reasonable quality, given the camera is embedded in a pen) and audio somewhat surreptitiously. This product was quoted at 180 yuan, and the woman was willing to accept a minimum order of “several dozen”—a proposition I considered briefly, though the prospect of selling several dozen less on pen video camera seemed a little daunting.

Unfortunately, I did not stay long enough to investigate the relationships between different stores: whether there are wholesalers’ wholesalers, or bigger companies that stand behind the store fronts and supply them with goods, as is the case with computer, printer, MP3, etc. sellers in China’s urban electronics markets; do stores collaborate with each other and refer business to one another; the proportion of customers who are long-term versus short-term—or the proportion of customers that comes through a network of relationships (family, friends, native-place fellows, classmates) versus those that just walk into the market.

There is a sense of social in the Yiwu product market, however. Given my limited time, I could easily see the families that came to the market, not just to view and purchase goods (mothers, fathers, and children browsing the thousands of toys being bounced, flown, crashed, and driven in the halls), but to live lives (most if not all stores have computers connected to the internet, and many communicate back and forth using QQ, a chat program from Tecent similar to MSN and Aim—and visiting between stores, and similar age young people chatting and playing while they tend to business, hence growing up both business-wise and social-wise). This phenomenon is identical to Zhongguancun’s electronic markets, where life is lived and relationships are used, built, broken, and developed through the market, with the focus on customers and buying and selling forming only one part of daily life.

Yiwu is not a very accessible city for someone who does not speak Mandarin Chinese. However, it is only a 2-hour train ride from Shanghai (then a 30 yuan cab trip to the Trade City). There are three 5-star hotels listed on Ctrip (a China online travel agency which books hotels at competitive rates and is free) in Yiwu. Yet, in the City of Jinhua, another place I visited on this trip, which technically oversees Yiwu, there are no 5-star hotels and sparse 4-stars (I stayed at the Jinhua International Hotel, a 3-star; in Yiwu, I stayed at Snow Peak Hotel, also a 3-star, which sits literally on the 3^rd phase of the Trade City). There are, however, many, many foreigners, so it should be possible to get by with English.

Who knows? If you can pony up 10,000 yuan or so you can take a box of goods back to Shanghai (or elsewhere) and start selling or “doing business” (zuo shengyi), rather than just working. As the Chinese expression goes, “it is better to be the head of a chicken than the tail of a phoenix” (ning zuo jitou, bu zuo fengwei). 宁做鸡头，不做凤尾

Hanging Clothes and Losing Face: Che in China

2009-01-07T23:22:00.000-08:00

Che Guiverra Doesn’t Hang His Clothes in the Street

I was riding the subway to the real estate development I am currently researching the other day, and as I stood up to get off, I noticed the profile of Che Guevara, the South American revolutionary that emblazens many T-shirts and posters in colleges throughout the United States. Curious as to Che’s appearance in Shanghai, no less on the number 5 subway line (which runs between Xinzhuang and the Minhang Economic Development Zone—both in Minhang District and all outside the outer-ring road—I leaned in for a closer look, and discovered an image of a Che T-shirt on a bamboo rod hanging over a narrow alley.

While the image is slightly blurred, you can make out the Chinese if you squint:

Chinese: “乱晾乱晒，它都怕丢人，你呢？”

Literal translation: “Chaotically hanging and drying your clothes -- it [Che shirt] is afraid of losing face, how about you?”

Figurative translation: “By hanging clothes out to dry next to the street, on sidewalks, from electric lines, etc, you go against principles of suzhi [quality, properness, manners], so you should be ashamed.”

Explanation and Opinion: It is definitely true that Shanghai people, more often outsider in Shanghi and especially the floating population (liudong renkou), lack proper places to hang their clothes. For those in apartment complexes, the “sun room” is a feature of almost all apartments, an area in which and from which to hang clothes. As I have mentioned in a previous blog, any view of an apartment complex in China will reveal hundreds to thousands of pieces of clothing in a rainbow of colors. In China, this appearance is jokingly referred to as “the 10,000-color flag of China” (wanguo qi) Hence those with apartments, more likely to be Shanghaiese or the huji population who make 70% of the population in 2007 according to the latest number from the Shanghai Bureau of Statistics (http://www.stats-sh.gov.cn/), have no need to be chaotic or outrageous with where they hang their clothes.

For those with less fortunate circumstances, however, the street is often the only place outside their domain (whether store, abandoned building, alleyway, etc.) where wet clothes can catch a brisk breeze. Che, figured in the city government public service announcement, is reminding this latter group (and perhaps re-enforcing what is “civilized” about the former group) that they should hang clothes away from the street, sidewalk, phone pole, fence.

My two cents: In thinking about Che and hanging clothes out to dry, the first thing I am reminded of is, as I argued in Green China, that China consumers are incredibly environmentally conscious. They do it out of cost, rather than some ideological commitment to the earth. Using the sun and wind to dry your clothes saves energy—indeed, a salute to the 10,000-color flag. The second thing is that, as a 2-year resident of Shanghai, the site of clothes hanging from phone lines, underwear in front of stores, pants and shirts on fences, indeed gives the appearance of untidiness and chaos—two things a stereotypical Shanghaiese dreads, preferring instead well-groomed, precise, and orderly appearances (of people as well as of buildings, streets, and apartment complexes). Perhaps I have become a little Shanghaiese myself. But the third point comes more from my Beijing-background, where the people reign supreme. There is nothing unsanitary (scientifically) or harmful about these clothes hanging in the street. Indeed, living in cramped and often dirty conditions, people still wash and dry their clothes—necessitating a place to hang them. The necessity of saving energy in the process of cleaning trumps Shanghaiese uneasiness about appearances. It is unfortunate that Che doesn’t agree.

In Death, Birth

2008-11-11T07:10:00.000-08:00

Sometimes, in life, you think the gurus who spout aphorisms might be right; or, perhaps, that chaos theory has individual-life applicability. In theory, unexpected and rare events are random, and should only happen once in a while. Yet they don't and, like traffic, they bunch.

This morning, I lost my father-in-law. It feels funny to say it in English, because the title has little meaning. Instead, I write something about him, a man no one, including himself, thought worthy of mention.

He was born in Shandong Province, the same place where Qingdao (TsingTao) beer is brewed. It was the 40's and China was at war, he was born before China was liberated -- in 1944. He had a dozen brothers and sisters. Several, including his parents, died of hunger during the famine of the Great Leap.

He went to Xinjiang, a remote and desolate province, to work under the shangshanxiaxiang ("go up into the mountains, and down into the villages") directive of the cultural revolution era.

There he spent a dozen years, the prime of his youth, raising chickens and working the earth to create a better China.

After Deng's reform of China, he went with his wife, step-daughter, and son back to their hometown, Changzhou, a city in southern Jiangsu Province (near Shanghai).

In 30 years, he never learned the language. When I met him in 2000, and until he left this earth this morning, he never could speak Changzhou-ese. He understood every word. And, even today, he was the only in-law I could completely understand.

He ethos was conservation. If you turned on the light at dusk, he would shut it off when you went to the bathroom. He brusquely turned down any invites for public showers or karoke. He took pride that his household consumed the lowest number of watts every month. A cost-benefit analysis of glasses versus electricity was moot.

That conservation and saving can be born of need is a fact too often lost to modern environmentalists and free-market Greenspanians.

It was me, a foriegner, who brought this man to the Great Wall for the first time in Beijing. I take pride in that.

A saver, a conservationist, and yet a man who would rather you eat and smoke until you are painfully sick than that you abstain out of courtesy.

Yes, a rare man, an unknown man. Not a model of life, or of death, but a model nonetheless.

You will be missed, Ren Yongshan -- the mountain of eternity.

Green China

2008-06-09T22:15:00.000-07:00

Green China

Why are environmental activists not cheering for China?

Recently (June 1, 2008), China banned (yes, banned) plastic bags thinner than 0.025 millimeters (0.001 inches). In addition, regular plastic bags are not longer allowed to be given away with purchases by retailers, including 7-11’s (convenience stores), grocery stores, and supermarkets. On average, plastic bags costs between 0.20 and 0.30 yuan (3 - 4 cents).

Reference to the story can be found here.

Of course, one of the negative consequences of this is that supermarket and convenience stores employees now feel like they don’t have to put your purchases in plastic bags at all (if you bring them from home). It seems lazy people will always find a way to skirt their responsibilities.

The green party, or environmental activities in the West, should be celebrating China as a paradigm.

But there is more: in China, almost everyone (I estimate 99.9%) air dries their clothing. I have never seen a dryer in China, and any walk through an apartment complex will immediately reveal colorful apartment balconies decorating with clothes of 1.3 billion people. How much energy is saved by this phenomena? Is there an “anti-dryer” movement in the West? Shouldn’t there be?

One more characteristic of green China: transportation. It is almost ironic that the environmental movement arose in the West, no less in the United States. Americans love their cars, and waste gallons of gas (and now money) based on the love. Public transportation in China is the rule rather than the exception. Of course, buses and subways are crowded. The alternative is bicycles. I am aware that bicycles take up more space in transporting people than buses, making them impractical users of space (especially in crowded cities), but compared to automobiles, there is no comparison. China bikers and bus-riders are truly the motor of green China.

I am not an environmentalist. But an objective analysis of existing states of affairs in the China and the U.S. makes clear that China is “going green” with much more fervent and commitment than the U.S. I only hope the “gas price crisis” will wake people up to the need for more public transportation.

Making Matters Worse

2008-06-09T22:08:00.000-07:00

Making Matters Worse: Intimidation from China’s Bloggers

All people in China, regardless of race, birthplace, economic class, or nationality, are deeply saddened by the tragedy in Sichuan. Our hearts go out to Wenchuan, to the families of children, and to the courageous leaders who have persisted in the face of disaster. (Please see my previous post to donate to the U.S. Red Cross and assist in the re-development of Wenchuan). But amidst this tragedy, a hegemonic force has raised its head, with pernicious consequences: the wrong-headed and misguided blogging community of China.

They have not only misplaced their efforts, directing energy at innocent people, they have damaged the reputation of China and the Internet by their actions.

I refer to the case of Wang Shi, the Chairman of China’s top real estate company, Vanke.

On 5.12, May 12, Vanke donated over 2 million RMB to the earthquake disaster victims. It was one of the quickest to respond, as it also did with the snow disaster that hit China before the Spring Festival (Chinese New Year).

Responding to an anonymous blogger, who complained that 2 million yuan was a huge disappointment from Vanke, Wang Shi on his May 15 blog (in Chinese) wrote a response entitled “After All, Life is Primary (Response to Web-Friend No. 56)” (“毕竟，生命是第一位的（答网友56）”, here (in Chinese)).

Wang Shi: “China is a country where disasters occur frequently. Charity for disaster victims is the norm. Companies’ charity drives should be sustainable, and not become a burden. Vanke Group’s internal charity drive has a condition: for each collection, ordinary employees can only donate a maximum of 10 yuan. The reason is so that donations do not become burdens.”

According to numerous sources, including the China Securities Journal, the online community in China has vociferously and vituperatively attacked Wang Shi for these comments (here, in Chinese). The result, as Wang Shi feared, is that donations have become a burden that companies cannot avoid: one could argue a “Wenchuan tax” has thusly been applied to any company in China. This is not corporate responsibility but a hegemonic civil society that blindly seeks scapegoats for a true human tragedy.

Under relentless pressure, Wang Shi and Vanke relented, pledging 100 million yuan in reconstruction assistance over the next 3-5 years on May 20 (see Shenzhen Securities Exchange announcement here (in Chinese)). This decision was approved by the Vanke board of directors last Friday, June 6 here (in English). At the meeting, Wang Shi appeared pale and weak, apologizing to the masses he had somehow disappointed. The force and power of hegemonic civil society is truly frightening, and its channeling through the blogosphere is a blow to any cheerleader of democracy.

Background

Wang Shi was born in 1951 in Liuzhou, Guangxi Province. He comes from a military family. He is a heroic entrepreneur, as Liu Chuanzhi, Wang Wenjing, and others are in Zhongguancun. He is famous for having climbed Mount Everest, among other feats. He is a powerful advocate for private industry and reform in China.

Vanke (Shenzhen 000002, 200002, website) is the largest market capitalization real estate company listed in China. Its most recent results, reported in the 20081Q quarterly report, yielded 718.1 million yuan (103.7 million USD) in profit on 6.06 billion yuan of revenue (875.3 million USD). Vanke has ongoing sales in Guangzhou, Hangzhou, Shenzhen, Shanghai, and Chengdu, with new projects starting in 20081Q in Wuhan, Chengdu, Tianjin (2), and Dongguan. The majority of construction and sales occurs in the Pearl River Delta, Yangzi River Delta, and the Bohai Rim. Vanke has assets at the end of 20081Q totaling 107.8 billion yuan (15.57 billion USD).

Love Wenchuan

2008-05-19T00:51:00.000-07:00

"If there is the littlest hope, we will use all of our effort"

Great words, and a great man.

5.12, and you were there. Looking pensive.

My words fail me.

What is a leader? Who is a hero?

I was there for Katrina. There, the heroes failed us.

Is this a hero?

Words fail again, only tears.

The hardest of times, and the strongest of men.

There are no words...

Love Wenchuan, love Chengdu.

Thank you Wen Jiabao!

Donations to Red Cross to rebuild the beauty of Wenchuan!

三面向公司的“游击战”

2008-04-09T11:05:00.000-07:00

谢谢王教授的介绍。今天我想讲的是“三面向公司的‘游击战’”

对社科院知识产权中心的李明德来讲，中国传统文化对版权和知识产权可以用两个概念来描写：一是“窃书不算偷”，或者“偷书不算偷”。这里的意识是普及知识的内在善良、知识内容的无形形式。书只是纸及墨水，根本没有什么价值；软件只是磁带及0和1，根本不值钱。二是“传媳不传女”。这里的意思是女儿是要嫁出去，如果她知道家里的商业或知识秘密，那么其他的家庭将抢本家的饭碗。保护知识产权最理想的办法是非公开的、小规模的发展[1]。

没有物质形式的东西没有价钱和不公开小规模的发展这两个概念在网络社会有什么不搭界？从改革开放以来，中国保护不同类似的产权有没有受到这两个概念的影响？

改革开放一直以来经常见到“模糊”产权。从乡镇企业的所有制度和单位“小公家”的房子到私营公司戴红帽子再到盗版软件，免费mp3下载，和好莱坞拷贝电影，中国当代的产权没有明晰的解释。那么，在这种情况下，三面向的行为是否不恰当的？三面向的“游击战”阻挡了中国版权、知识、社会共识等发展吗？

我个人意见是否。原因在于中国信息产业、网络软件、技术开发等高科技的发展到目前为止已经发展到了一定的程度。为了保护这些公司和机构的将来盈利和持续发展，中国需要更多的像三面向这样的公司来打击模糊产权。

网络是共享为主的神话：一方面对于三面向公司的批判是它买断了一个共享资料，侵犯网络基本上的精神。不过，不管是西方国家也好，中国也罢，网络不是免费共享来发展的。中国的QQ、百度、优酷、土豆网都是直接与广告公司签订合同并收费才能够持续发展。这些知识产品表面上可以免费装载，但实际上每次使用必须参加市场活动。

两种反对可以提出来：一、三面向公司是以实行版权为主收益，并没有出版和普及知识的目的。那么，三面向的“买断”是它公司的营业模式，利用它与学者之间的合法合同来投资并出版一些文章来获得盈利。是否三面向将来会开发一个“许可证”之类的产品，我们无法知道，但三面向的法律战略明晰了出版和发表文章的产业。因为出版后的文章版权是跟着作家而不是跟着出版社，那么作家怎么处理自己的版权完全是他个人的事。

二、因为三面向主要买断了一些与“三农”有关的文章，那么文章的内容大大超过了任何个人或公司的业主权。我认为这样的想法还是找错了对象。如果一篇文章是对中国三农问题那么重要，而不是知识，不是讲话，不是某个教授的研究结果，那么作家卖出这篇文章等于是自己轻视了三农问题。我相信将来这样的事情不再会继续发生。

最后，我在这里提两个网络社会和知识产权的例子：第一来自我母亲。我母亲是一名专职顾问专门提供各种大学信息。自从与我父亲离婚起，为了谋生她成立了一家个人企业，帮助高中学生进入自己梦想的大学。2004年她请了一个设计师为她的企业设计了一个网站，专门介绍自己的服务。2006年她收到了一个（格蒂代表摄影师公司的）通知：她的网站所使用的图片是有版权的，而拥有图片的版权公司准备起诉她，要罚款2000至4000美元。后来，我母亲付了罚款然后从那家公司的营业部门用3730美元买到了该图片2年的使用“许可证”。

第二的例子来自中关村。在清华大学校内有一家公司自己研发一个产品叫“电子鼻子”。发明后拿到了国家专利权并开始生产和销售。一段时间后，另外一些公司，主要在深圳，打开“电子鼻子”的外壳和仿冒了里面的电路板和功能。结果，因为深圳的那些公司没有研发费用，它们可以以很便宜的价钱销售同样的产品。清华那家公司的老板不愿意起诉那些深圳公司因为“第一它们在外地，一旦起诉，将花大量的金钱，而这家公司很快瞬间蒸发。然后另外一家新的公司会成立，开始做一样的是事情”这位老板说。2004年，这位老板终于起诉一家公司：百度。他说起诉百度的重要原因是百度收了假冒公司的广告费用（搜索“电子鼻子”会找到假冒公司的广告）而造成他公司的损失，加上百度公司很大，不会跑掉。

总结一下：中国现在的网络社会越来越发达，也许从某种程度来讲，它已经超过了下线社会的发展。那么，模糊产权对发达网络社会和发展中的民间社会永远带来好处吗？从小规模的角度来看，模糊产权会降低创业、普及知识、和开发产品的成本。但同时模糊产权也影响公司和机构的盈利收入，减少创业、普及、开发等的机会。三面向确实在这方面给我们一个非常及时的提醒。

谢谢大家！

[1] 李明德，2003，“当代中国的智慧财产权制度与社会发展”，台湾清华大学当代中国研究中心的演讲，在 www.iolaw.org.cn/showarticle.asp?id=878，2008年3月4日访问。

The Sanmianxiang Company and IPR

2008-04-09T10:05:00.000-07:00

(A version of this was presented at the "'Sanmianxiang Phenomena' Roundtable Forum" held on March 9, 2008 at Shanghai University. It was subsequently published in Chinese by China Business Network here.)

Background: Sanmianxiang (三面向) is the name of a company in Beijing. It was established on October 27, 2004 with registered capital of 2 million RMB and 10 employees. Sanmianxiang is headed by the venerable Zhan Qizhi, a former assistant professor at Henan Finance and Economics University. Sanmianxiang has signed copyright transfer contracts with 150 authors that include over 1000 articles. With copyright contracts in hand, Sanmianxiang has sued hundreds of government, university, and other websites over unlawful transmission and downloading of copyrighted articles. While initially promising authors that Sanmianxiang would publish large collections, instead Sanmianxiang focuses on prosecuting intellectual property scofflaws.

"The 'Guerilla Warfare Tactics' of Sanmianxiang Company"
Tyler Rooker

According to Li Mingde of the China Academy of Social Sciences Intellectual Property Center, traditional Chinese culture has two ideas that deal with copyright and IPR: one is “to steal a book is not to steal” or “to steal a book is an elegant offence.” The meaning of this is that the propagation of knowledge is inherently good, and knowledge is immaterial. Books are only paper and ink, and have not value; software is only magnetic tape and ones and zeros, essentially worthless. Two is “pass to the son not the daughter.” Daughters are married out, so if they know the families commercial or intellectual secrets, those secrets will pass out to other families who will steal the bread and butter. The ideal method for protecting intellectual property is to have closed, small-scale development. (See here).

How do the twin ideas that immaterial things have no value and closed, small-scale development is ideal become conflicted in Internet society? Since the reform and opening of China, has the protection of different kinds of property been influenced by these two ideas?

“Fuzzy” property rights are a common occurrence during the reform and opening era. From the ownership system of township and village enterprises to the “small public family” apartments in danwei, to privately-run enterprises “wearing a red hat” and even to pirated software, free mp3 downloads, and copied Hollywood movies, there is no clear interpretation of property rights in contemporary China. Then, in this situation, is the behavior of Sanmianxiang appropriate? Has Sanmianxiang’s “guerilla war” blocked the development of copyright, knowledge, and social awareness in China?

In my opinion, the answer is no. The reason is that China’s information industry, Internet software, and technology development—the high-tech industry—has already developed to an advanced degree in China. In order to protect the future earnings and continued development of companies and institutions, China needs more companies like Sanmianxiang to strike against fuzzy property rights.

It is a myth that the Internet is basically free: one of the criticisms of Sanmianxiang is that it bought out publicly-shared materials, infringing on the basic spirit of the Internet. But, whether it is the West or China, the Internet is not developed as a free, publicly-shared entity. China’s QQ, Baidu, Youku, Tudou all signed agreements with advertising companies and receive fees in order to sustain development. These intellectual products appear to be free to install and use, but in reality every use is participation in marketing activity.

Two detractions could be raised at this point: one, Sanmianxiang Company enforces property rights as its main business, and never had the goal of publishing or disseminating knowledge. In that case, Sanmianxiang’s “buy out” of copyrights is its business strategy, using its legal contract with scholars to invest and publish some articles and make money. Whether or not Sanmianxiang will create a “certificate”-type of product, that could be leased or paid for dissemination of article, we have no way of knowing. But Sanmianxiang has clarified the legal copyright issues in the publishing and issuing of articles. Because, in China, after publication, the rights to the article stay with the author rather than the press, the onus is on the author in how he/she uses these rights.

The second opposition is that Sanmianxiang bought out articles related to the “three peasant” problems, so the content of the articles far outweighs any individual or company’s ownership rights. I think this type of thinking is directed at the wrong subject. If one article is so important to China’s three peasant problems, and not the knowledge, lectures, or research results of professors, then selling the article is tantamount to belittling the three peasant problem. I believe in the future that this type of issue will not reoccur.

Lastly, I would like to present two examples on Internet society and IPR: the first is from my mother. My mother is a college-preparatory tutor, a college coach. After divorcing from my father, she founded her own company to help high school students get into the college of their dreams. In 2006, she received a notice (from Getty Photographer-Representing Company): the images on her website were copyrighted and the copyright owner was preparing to sue her, and she should pay 2000-4000 USD. After that, she bought a “certificate” for the 2-year use rights to the images for 3,730 USD.

The second example comes from Zhongguancun. There is a small company on the campus of Tsinghua University that researched and developed a product called “electronic nose.” Once it was invented and patented, production and sales began. Soon, however, other companies—mostly in Shenzhen—opened the cover of “electronic nose” and copied the circuit board and functions. As a result, because the Shenzhen companies did not have R&D or marketing fees, they could sell for a much cheaper price. The boss of the Tsinghua company would not sue the Shenzhen companies because, “for one thing, they are outside Beijing. If I sue them, I will have to pay a lot of money. Then the Shenzhen company will disappear. And another company will be founded that does exactly the same thing” the boss said. In 2004, this boss finally did sue a company: Baidu [the Google of China]. The reason for his suit was that Baidu had accepted advertising dollars from the Shenzhen companies (so that when you search for “electronic nose” you get advertisement from those companies) causing his company loses. On top of that, Baidu is a big company, and can’t run.

To summarize: China’s Internet society is more and more development. From certain respects, you might say Internet society has surpassed society. Will fuzzy property rights always bring benefits to the developed Internet society and the developing civil society? From a small-scale perspective, fuzzy property rights lower the cost of starting businesses, promulgating knowledge, and developing products. But, at the same time, fuzzy property rights negatively affect earnings and reduce opportunities to open businesses, promulgate knowledge, and develop products for companies and institutions. In this respect, Sanmianxiang has given us a very timely wakeup call.

Thank you!

Goin' Commercial

2007-03-29T00:00:00.000-07:00

Long time without a post.

Much has transpired, though I am clueless.

Returning to the mainland (i.e. Shanghai) to endeavor in some commercial behavior. As Bob Jacobson would have it, I am turning capitalist.

Research officer at Rabbit Research China. Website is here. Rabbit Research China, aka 野兔研究公司。下海算了。

Preparing to blog anything in Shanghai, like Atlantic Computer Mall, that smells like Zhongguancun. I am ready...

Zhongguancun Dissertation Published

2006-11-21T07:45:00.000-08:00

Taking the spotlight for myself, my dissertation on Zhongguancun has finally been published. Hooray!

Check it out at UMI (click "Continue").

Very 牛X, if I do say so myself.

BTW, if you purchase a copy, all the pictures are indistinguishable because the copies are in black and white, not grey-scale. If you purchase a copy, email me with your address and I will send you paper copies of pages with pictures.

Zhongguancun 2006 Six Month Economic Statistics (Parks)

2006-10-29T18:05:00.000-08:00

Zhongguancun Science and Technology Zone
Management Committee

July 24, 2006

(Translated and adopted from Chinese, found at ZGC official government website, here, on October 29, 2006)

Zhongguancun Science and Technology Zone is composed of seven individual parks: Haidian Park, Fengtai Park, Changping Park, Electronics City, Yizhuang Park, Desheng Park, and Jianxiang Park. The following chart gives the breakdown of revenue by park.

Zhongguancun Science & Technology Zone 2006, January-June (Half Year) Economic Development Statistics (By Park)

	2006 1/2 Year(% ZGC Revenue)	2006 1/2 Year(Revenue in billion yuan)	2005 1/2 Year(Revenue in billion yuan)
Haidian Park	48.4	124.3	93.2
Fengtai Park	11.1	28.5	22.3
Changping Park	6.7	17.2	12.5
Electronics City	8.2	21.0	18.5
Yizhuang Park	24.8	63.8	39.1
Desheng Park	0.5	1.3	0.8
Jianxiang Park	0.2	0.6	0.4
Total	100.0	256.6	187.2

Zhongguancun 2006 Economic Statistics

2006-10-29T16:02:00.000-08:00

Zhongguancun Science and Technology Zone
Management Committee

July 24, 2006

(Translated and adopted from Chinese, found at ZGC official government website, here, on October 29, 2006)

In the first half of the 2006 year, the total economy of the Zhongguancun Science and Technology Zone continued its high-speed, steady growth. The rate of growth of industrial production was relatively large and rate of growth of created export reserves slowed a little. There was steady growth in the amount of taxes paid, while newly recognized enterprises had clear decline. The entire economic trend was stable.

Zhongguancun Science & Technology Zone 2006, January-June (Half Year) Economic Statistics

	2006 (1st Half)	2005 (1st Half)	% Increase
Newly Recognized Enterprises	1916	2236	-15.3
Revenue (billion yuan)	256.6	187.2	32.6
Total Industrial Production Value (billion yuan)	141.7	102.9	33.6
Taxes Paid (billion yuan)	9.4	6.6	24.8
Exports Created (billion USD)	9.0	5.4	68.1

The structure of total revenue is worthy of note. Sales of products accounted for 162.6 billion yuan or 63.4% of the total. Technology revenue was 35.3 billion yuan or 13.7% of total revenue. And other revenue accounted for 58.7 billion yuan or 22.9% of total revenue.

New Oriental 新东方 IPO, Take Two

2006-09-07T17:10:00.001-07:00

Of course, New Oriental sells dreams along with solid English teaching to children, college students, and young professionals. One of the major dreams that New Oriental peddles is chuguo 出国 or “leaving the country”, usually for New Zealand or Australia. Indeed, English education has this as one of its primary goals (and the ultimate endpoint, improving the self, making money, and becoming successful, is still achieved with chuguo). Many students, including one of my friends from 2000, swallow this dream whole and take classes, buy supplies, and pay tuition to New Oriental to achieve the dream. My friend from 2000 indeed did make it to New Zealand, although instead of a rigorous overseas education, he found a party-like atmosphere where rich children from China went to sow their oats.

A coin has two sides and education is a commodity, as difficult as it is to make teaching, learning, testing, and studying into a thing, much less a product or commodity. But that’s my two cents.

New Oriental Vignette

2006-09-07T17:10:00.000-07:00

Along the Fourth Ring Road, to the east of Zhongguancun Avenue, is an enterprise that some of my friends only half-jokingly referred to as the most successful enterprise in Zhongguancun: New Oriental English-language school. On an otherwise inauspicious day in May, 2004, some poverty-line migrants, as they often do, were selling pirated English-language teaching and testing materials on bed sheets in front of New Oriental. As I passed the school I saw a sudden movement -- one of migrants grabbed his blanket and ran down a nearby alleyway. The others quickly followed. One unlucky migrant was too slow: several dozen CD-ROMs and teaching books spilled on the ground. He did not stop to retrieve them. Next, a police car and van pulled up, out of which four police officers emerged. They looked around, picked up the pirated CD-ROMs and books, and put them in the van.

Wondering what would happen next, I stopped and stood in front of the school. The police officers looked around and milled about for a few minutes. Then they drove off. Moments later, a young man standing in front of the school went to the corner of the alleyway, stood on top of a street post, and motioned down the alley. Minutes later, the migrants returned to the front of New Oriental to continue plying their pirated wares.

While piracy is ubiquitous in Zhongguancun, I argue here and elsewhere that neither ubiquity nor criminality is piracy’s greatest significance. Instead, one could even view these education material-peddling migrants as promulgaters of pedagogy.

I thought this vignette might be relevant to write about in light of today’s happenings.

新东方 (Xin Dongfang) or “New Oriental” Lists on NYSE

2006-09-07T12:09:00.000-07:00

New Oriental is, according to Zhongguancun technocrati, the most successful enterprise in Zhongguancun. This is partially a joke since the most well-known companies in Zhongguancun are all technology companies: Sina, Lenovo, UFIDA, Founder. Further, Zhongguancun is a high-technology development zone, so the fact that New Oriental, an educational company that focuses on English, is so profitable is a little embarrassing but eminently understandable.

Peking University, Tsinghua University, Renmin University, and other famous universities, as well as national academies such as China Academy of Sciences and China Academy of Agricultural Sciences, are all located in Zhongguancun. The need for extracurricular education, such as that offered by New Oriental on nights and weekends, is one way to stay ahead at these education institutes.

Further, parents, with disposable income and no place to spend it, focus their financial might on singletons?the only children who have resulted from decades of the one-child, one-family policy. Singletons and New Oriental are another happy synergy, where children learn English and the school plies its wares.

Another level is migrants. Migrants come to Beijing, and to Zhongguancun in particular, for a variety of reasons. Mostly, it is to improve their lives, make some money to send back some, and become successful. One way to improve and succeed is to study English (or accounting). Hence, many migrants who are hesitant to spend their paltry pittances on consumer goods will instead opt for New Oriental hoping for a skill that will push them up and help them succeed.

All of these levels converge in Zhongguancun. Hence, despite the rise and fall of high-tech companies, the Internet wave, portals, and blogs, the one constant in Zhongguancun has been New Oriental. After so many years, a listing on the NYSE (and not tech-heavy Nasdaq) seems appropriate. New Oriental is reaching places that Sina and Lenovo perhaps cannot.

In any case, I welcome another Zhongguancun enterprise to the world.

Zhongguancun Enterprise Strikes Again

2006-09-07T11:25:00.000-07:00

This morning, the most profitable, and some would say the most successful, enterprise in Zhongguancun listed on the New York Stock Exchange. The reasons for this, and a story about New Oriental piracy are forthcoming this evening… Stay tuned.

Article on Zhongguancun Published

2006-07-28T04:06:00.000-07:00

After a long wait, I have finally published an article on Zhongguancun. It is not free, but fairly priced. If you have disposable income, feel free to purchase.

The article, "Technology as Practice in the Silicon Valley of China," is not focused solely on Zhongguancun. Instead it is about technology, and how viewing technology at the level of everyday life (the location of ethnography) yields insights into how technology comes to exist. I argue that companies and markets are necessary for technology to occur. In turn, technology's existence implies company and market.

This may seem to be a very specific definition of technology. However, I believe it to be general. For example, anthropologist Levi-Strauss analyzes a club that is used to hunt fish. The intricate, particular design and existence of the club is a objectification of the practice of killing fish (solving a problem) that comes into existence as a result of company (the people who make clubs and can make a living off that) and market (the demand for eating fish).

As you can see, this article is a little theoretical, and perhaps not suited to everyone. It does take place in Zhongguancun, and the three technology practices that I analyze come from my 2 years of fieldwork in Zhongguancun. In the article, I give some context to my fieldwork and describe the companies where I made observations. Technology, using my definition, is a key component of how Zhongguancun serves as a context for everyday life. Zhongguancun is also inseparable from technology practices that make it the Silicon Valley of China.

Eppur si mouve.

http://theuniversitypressjournals.cgpublisher.com/product/pub.42/prod.102

Newly Minted Ph.D. Returns from Beijing-Changzhou-Shanghai Trip

2006-06-21T05:48:00.000-07:00

In late May and early June, 2006, I returned to visit all my old friends from Zhongguancun, the Silicon Valley of China, where I did the fieldwork that earned me a Ph.D. in anthropology of University of California, Santa Cruz, in cultural anthropology on June 16, 2006 [obligatory pat on own back].

Of more interest than me, of course, were the people and what they were doing. And, given the hyper-speed of life in China's city of cities (Beijing) and the hyper-ferocity of competition in a nominally socialist market economy, my experiences were fast and furious.

Upon returning to the IT/electronics markets of Zhongguancun to visit people from the Hilon photocopier company that I worked with for 6 months in 2004, I learned that the original company composed of 8 people had deconstructed in the literal sense. To visit my friends, I had to visit four different companies. The original company had met the fate of so many companies in Zhongguancun -- dissolution based on divergent interests and a sense that one can make more money if one goes out on one's own (despite the fact that the perennial topic of conversation among Zhongguancun IT/electronics markets bosses is the microscopic profit margins on sales).

One of the former members of the company I worked with in the markets, who I shall call Young Guo, is a fax machine specialist. I have seen him completely dissemble a laser fax machine in search of a problem. His hands are dirty, his manners uncouth, and his language peppered with expletives. But he is a dear friend and key source for the inner workings of the IT/electronics markets.

Young Guo had moved to Dinghao Electronics Market and rented a 6 square meter, glass-enclosed shop on the second floor underground at Dinghao. He continued to sell photocopiers, fax machines, and perform service and maintenance, as he had in the former company.

Besides catching up on the two years that had elapsed since we had worked to together, I had sought out Young Guo with a goal: I had a Cingular Nokia phone that I wanted to use in China. Who can de-encrypt this phone, I asked, so I can use it in China. Apparently, phones sold in the U.S. only work in two frequencies, and they need to be de-encrypted with a special device to work in China. If it could be done and had to do with IT or electronics, I knew, it could be done in Zhongguancun's IT/electronics markets.

Young Guo's neighbor, it turns out, could provide the service (not herself, mind you, but she had a connection with another guy who could). Before she de-encrypted, she warned me that there was a possibility that the phone might simply short-circuit. Since I had no other use for the phone, I was willing to accept the risk.

When Young Guo and I returned from lunch, the neighbor approached beaming with success. The phone de-encryption had worked! She then asked for payment: 80 yuan (10 USD). I paid it.

In a few minutes, Young Guo led me away to smoke and chat with a few friends in another neighboring store. Young Guo left to check on his store and then returned with a smile on his face. "She thought you were a customer," he grinned. "She tried to give me 20 yuan as a profit." Young Guo explained that since the woman thought I was just a friendly customer, not an ethnographic insider, she should make a profit for Young Guo and then give it to him -- her fee was waived for similar fees made when she introduced customers to Young Guo and he paid her part of the profit.

The woman insisted on keeping the 20 yuan so Young Guo tried to give me 20 yuan. I refused. Although I am sufficiently worried about losing 20 yuan, I did not think it important enough to have Young Guo pay it out of his pocket. I chalked it up to "tuition". At least it would make a good blog entry, I reasoned.

In the IT/electronics markets, life, exchange, reciprocity, and technology all go on through the social forms of entrepreneurs and companies. This is modern China, and especially urban, IT/electronics market China. But these relationships, between neighboring stores, stores and customers, and de-encryption devices, go beyond a particular time and place. I would even hypothesize their existence throughout China, even its villages and hinterlands.

And by the way, I didn't see the state in these markets. So much for totalitarianism.

How Lenovo is Like Microsoft and Dell

2006-05-23T05:04:00.000-07:00

According to several managers I know in Zhongguancun, they are running a Linux software company that is mostly funded by China's government in order to create products (such as word processing software, operating systems) and services (such as training). Yet most entrepreneurs in Zhongguancun and, indeed, in China do not like this MO. Why? China's entrepreneurs love the market. The market, not the government, should decide who makes money, what is a good product, and the trends in industry.

It is quite comical, then, that Representative Frank Wolf (a Republican no less), Larry Wortzel, and Michael Wessel have determined that using Lenovo's computers in the State Department is unwise, due to potential espionage concerns. The reason the State Department chose Lenovo in the first place is that there is a competitive bid process, and Lenovo's computers were the cheapest, the fastest, and the best value. In times of budget deficit and current account deficit (not to mention trade deficit), the State Department should be commended. But it is being condemned.

Back to China. Why would the government fund its own Linux-based operating system and programs? Among many reasons, one is that there are existing fears about Microsoft and Dell, both American companies, that their software code and computers, respectively, contain secret code and hardware that will email secrets to Washington. What a far-fetched, feckless fear, I used to think.

As much as I relish being able to excoriate a member of the Republican party, it is disconcerting that Representative Wolf is so ready to capitulate to xenophobic fears. The market is not a panacea. Zhongguancun entrepreneurs' faith in competition and free market values is certainly idealistic. Yet, as one entrepreneur I interviewed once told me, "the government is a little slow. Making a PC these days is like making a TV -- it is not technology. If the government knew that, they wouldn't place so much importance on Lenovo." At the time, he referred to China. Now, I refer to the U.S.

Zhongguancun Zone 2005 Economic Indicators

2006-03-10T17:08:00.000-08:00

Zhongguancun Science & Technology Zone 2005 Summary of Economic Development

Department of Science & Technology
Torch High Technology Industry Development Center

February 27, 2006

http://www.chinatorch.gov.cn/dtxw/dtxw_News_info_26421.aspx

2005 was the year after Zhongguancun Science & Technology Zone “Five Year Phase of Taking the Platform.” Various construction projects of the Zone achieved substantial results: economic development grew at a fast yet stable rate; in total economic quantity, indicators doubled from 2001; revenue in technology-industry-trade broke 480 billion yuan; industrial production and foreign currency increased mightily; there was a steady increase in the amount of taxes paid; the development trends in key industries was stable; core enterprises had a positive total development form; and there was a beneficial increase in key projects of the central area.

Zhongguancun Science& Technology Zone 2005 Economic Development Status
(Preliminary Statistics)

	2005	2004	% Increase
Newly Recognized Enterprises	4,434	4,266	3.9
Revenue (billion yuan)	481.9	369.2	30.5
Total Industrial Production Value (billion yuan)	255.2	187.6	36.0
Taxes Paid (billion yuan)	16.8	14.2	18.1
Exports Created (billion USD)	9.0	5.4	68.1

Separated according to Zhongguancun’s individual Parks, Haidian Park had an estimated total revenue of 248.5 billion yuan, Fengtai Park a total revenue of 60.0 billion yuan, Changping Yuan an estimated total revenue of 23.7 billion yuan, Electronics City an estimated total revenue of 41.0 billion yuan, Yizhuang an estimated revenue of 96.5 billion yuan, Desheng Park 2.22 billion yuan, and Jianxiang Park 1.0 billion yuan. Compared to last year, aside from Changping Park whose growth rate declined to 4.8%, other Parks all grew at a rate of 18% or higher, and Yizhuang Science and Technology Park grew at the highest rate: 97.1%.

Doesn't It Seem Strange?

2006-02-16T02:27:00.000-08:00

The U.S. Congress is holding hearings on Google, Yahoo, and MSN aiding the Chinese government in the suppression of human rights.

But on January 25, 2006, an article in the New York Times reported that Google is refusing to execute a subpoena by the U.S. government to surveil the Internet searches of U.S. citizens.

The justification given, by both U.S. and China governments, is that they are trying to find information on illegal activities, including terrorism and pornography, to ensure the stability and security of its citizens. What are the differences?

In the U.S., terrorism is defined mostly as those related to al Qaeda, which attacked the United States by hijacking airplanes.

In China, terrorism is defined mostly as those related to Falungong, which is a cult that tricks its followers into giving up their money, any sort of health care, and even into self-immolation.

Both governments want to protect the safety and security of their citizens. They do it by filtering web sites and search results. That is right, the U.S. government also blocks web sites if it deems those sites to violate the laws of the U.S. government, including not only terrorists but intellectual property scofflaws.

Why should "free speech" be able to trump the human rights to safety and security? The publication of cartoons of Prophet Muhammad has caused several people to die, while others have been injured. Perhaps the publishers did not know this would be the result. Hence they are not technically liable for the results. But it is clear that publication is not necessarily a right guaranteed under "free speech". In fact, the New York Times did not publish the cartoons. Perhaps Congress will convene a hearing to investigate why the Times censored its reporting? Unlikely.

There is something more going on in the House Subcommittee on Africa, Global Human Rights and International Operations, lead by Christopher Smith. I implore Congress to stop these hearings. Instead, criticize the very fact of surveillance and filtering, and investigate the U.S. Justice Department and the myriad local police forces that have used the Internet to put people in jail. There are more than a few.

Why should Google, Yahoo, and Microsoft be held at fault for complying with the same exact laws that exist in both China and the U.S. -- the right for society to be free from intimidation, violence, and attack?

Hypocrisy of Chris Smith

2006-02-15T10:11:00.000-08:00

In the New York Times today, an article reported that Congress, and specifically the House, is excoriating tech companies Google, Yahoo, Microsoft, and Cisco for their business operations in China.

From my perspective, I wonder why it is that most mp3 files, movies, and software can be distributed freely over the internet in China but not in the U.S. Those sites in China, infringing on copyrights of the record industry, Hollywood, and Silicon Valley (among others), are frequently blocked by the U.S. government. Yup, your right to access free content on the internet is restricted not in China but in the U.S. Is this a violation of your human rights?

The companies that go to China are bridging a divide. Gaining access to China, remember, only occurred in the past 25 years.

When I lived in China in 2000, the New York Times was blocked. Then, one day, it wasn't. People in China can and do read about news from the U.S. They know much more about current events in the U.S. then we do about events over there. They also know about censorship.

I understand the argument that "freedom of expression" is a fundamental right in the U.S. Indeed, without it, I might not be able to write this weblog. However, in China, it is not a fundamental right. This is not a human rights question, but a question of the relation between ideal and real.

Schooling and health care are universal human rights. But many people in the U.S. do not have health care. Does that mean the U.S. government is violating our human rights? If I have to work after high school instead of going to college in order to pay for food and living expenses, is that a violation of my human rights by the U.S. government?

In China, many pornographic and cult websites are blocked. Most news sites are not. Does this make a difference? Doesn't it matter what is blocked? Falungong is legally a (terrorist) cult in China, so its websites are blocked. Is this unreasonable?

In China, everyone knows the law is not to openly criticize the government in print, since everyone does it in daily conversation everyday (if you don't believe it, learn Chinese, go to Beijing, and take a few cab rides -- there are quite a few disgruntled cabbies). When a blogger violates this law, he/she must pay the price, just as anyone else does.

In reality, media changes nothing. The law is still the law.

If the House of Representatives wants to challenge Chinese law, that is fine. But why on earth are Google, Yahoo, Microsoft, and Cisco being raked over the coals? Aren't we violating their (human) right to do business?

Superbowl Halftime

2006-02-05T17:04:00.000-08:00

First, go Sprint. Halftime show brought to you by Sprint (together with Nextel). Buy a cell phone!

Also, I created a Chen Chunxian entry at Wikipedia. Check it out if you get a chance.

Professor Chen was an amazing person. We all know about Liu Chuanzhi, one of the founders and current Chairman of Lenovo. But Liu Chuanzhi walked down the road blazed by the late Professor Chen in 1980. Without him, Liu Chuanzhi would still be trying to determine who to promote in the cadre department of the (China) Academy of Sciences.

I think it would be worthwhile to create a Chen Chunxian monument in Zhongguancun -- probably in front of Hilon Market, the busiest market in Zhongguancun.

I met Professor Chen on October 26, 2003. Professor Chen passed away on August 11, 2004. Perhaps I was the last foreigner to visit him. Perhaps Professor Chen created the idea that high-tech, technology, was a project aimed to get science out of the lab and into people's hands. Professor Chen created the idea that a privately-run enterprise in China could use scientists to make money. Making money put technology on the street, with all the civil society and life-improvement consequences that therewith.

I will miss him.

No Negative News

2006-02-05T09:01:00.000-08:00

I just wanted to report that there is no negative news from China today.

Perhaps it is a general trend in news reporting, or simply the nature of news itself, but the vast majority of news I get about China these days (and for the past 5 years) is negative. I do not question the "objectivity" of reporting, just the selection of topics. The site I get a lot of China stuff from is China Digital Times. Check it out for daily emails on China-related reports in the media. But let's think a little before we report another peasant uprising.

In one of the best classes I ever took, Maria Lepowsky taught us about "Anthropology by Women" (my emphasis). Although the class was 30-3 female-male, the focus was not on feminism per se, but on women: what women anthropologists have done, their influence in the field. Focusing on women is a choice of topic. Feminism, properly speaking, attacks domination and defines mainstream institutions as patriarchical. Instead, in Lepowsky's class at the University of Wisconsin, we chose to study the work of women.

In Zhongguancun, a million wonderful things happen everyday. Computers are assembled, migrants learn technical skills to fix photocopiers, the local government assists new start-up companies, and people live their lives. Most of them are happy. There is no ominous specter looming over everything.

Of course, Zhongguancun is not the countryside, which is the new "darling" of Western media reports on China. But Zhongguancun is surrounded by the countryside. In my travails in and around Zhongguancun, I had occasion to visit the countryside many times. What I encountered was not anger over land grabs or vitriol at the government. Instead, people yearned for a bigger piece of the pie. At the same time, countryfolk are extremely cognizant that life in China today is better, far better, than it was in the past.

The point of this post is only to draw attention to the fact that all the news out of China today is extremely negative. Perhaps happy peasants are not very interesting. But they far outnumber the unhappy ones. Is there a motive in reporting the bad rather than the good?

盗版还是垄断？

2005-11-03T17:57:00.000-08:00

((The following article is a translation of my August 16 post on Piracy and Microsoft, found here. I re-wrote it in Simplified Chinese for more general dispersal. ))

by Tyler Rooker -- re-written in Chinese

在中关村,“中国硅谷”，Windows XP的盗版到处都有。这是谁都知道的。不管是农村来到电子城门外的流动人口，还是在柜台装机的人，许多人都不花钱用XP。什么原因啊？价格。正版 Windows要两千多元（250美元）。盗版只需要6元。但是，这样的情况到底损害还是支持微软的操作系统的垄断？

“枪打出头鸟”是中文的一句俗语。对百度，用友，联想等大公司来讲如果它们用盗版，就会引起微软在法院里的“枪”。但是，对微软来讲，枪打那些今天在明天不在的流动人口，这么做有什么好处呢？没有。这些流动人口只会被政府的工商部门抓了，罚款，然后遣送回家。而这些被罚的款都属于北京市的政府。那么，盗版怎么帮助微软呢？

从一个观点来看，答案是，只要盗版在中国继续存在，微软就可以维持它在中国的垄断。现在中国没有操作系统。连计划中的系统都没有。为什么？因为一出来，也会被盗版。盗版削弱微软，但是同时也削弱中国想要开发自己的操作系统的企业家们。如果中国操作系统是200元（25美元）的话，就可以让那些企业家们获得足够的利润和投资收益。那样一来，为什么金山（中国的微软）不去开发呢？盗版。

在中国，盗版确实把微软的一部分利润窃取掉。但我想强调是，微软也是从盗版行为获得某些好处和利润。如果没有盗版的话，中国的操作系统就会像毛主席所说的“百花齐放，百家争鸣”。最终，那些系统会削弱或结束微软的操作系统的垄断。

下次微软抱怨中国的盗版时，注意他们找什么理由。在中关村4/5的电脑是品牌机，用的都是正版。1/5是DIY装机的，用的是盗版。那么，微软丢失了还是获得了利润呢？

Wikipedia Zhongguancun Entry Updated

2005-11-01T16:37:00.000-08:00

I have added some information to the Wikipedia entry for Zhongguancun. It is currently listed under "Zhong Guan Cun," which makes sense because the characters in the Chinese name are three separate ones (see title of this blog).

The current address is:

Wikipedia Zhongguancun

Check it out.

Also, writing up a general introduction to Zhongguancun has made me recall my interview with Chen Chunxian, the China Academy of Sciences (CAS) member who was the first person to think of a Silicon Valley in China. Chen Chunxian was a plasma physicist at CAS until he quit to start a company. He is known in Zhongguancun as "the first person to eat crab" (第一吃螃蟹的人), meaning that dared to try something that looked horrible on the outside but is great once you try it. He passed away one year ago. I will post a future blog about him and his courageous work to set up a company and transfer scientific results into technology that could be used. He really is some one who should be remembered.

Zhongguancun is the "China Valley"

2005-10-30T13:55:00.000-08:00

With the increasing influence of China -- as global partner or global threat -- Zhongguancun, the Silicon Valley of China, will continue to attract attention from the West. In this vein, I propose that Zhongguancun be known in English as "China Valley" to attest to both its China origin and its purported affinity with Silicon Valley, California.

In the Bay Area and environs, along with those who claim to be insiders to it, Silicon Valley is known as the "Valley". Therefore the nickname given to the China Valley should come naturally.

In addition, this should remove the difficult surrounding the pronunciation of Zhongguancun -- Zhong, guan, cun -- which is quite diffiult for Westerners, and the awkwardness of ZGC, an acronym. "The Silicon Valley of China" works well as a name, but it is too wordy to use in ordinary conversation.

I would be curious as to opinions on this name. It seems to work well. Let me know your ideas.

Problem Solving

2005-10-20T13:27:00.000-07:00

Over the course of 2 years doing research on the Silicon Valley of China, I encountered numerous problems that required skill, perseverance, networking, and creativity to solve. The difficulties ranged from mundane?finding a university and professor to sponsor my research?to the cultural?convincing top executives at Beijing UFSoft Software Corporation that I could conduct objective research on their company operations. There were several different skill sets that I drew on to solve these problems. Besides my knowledge of Chinese culture and language, I sized up the situations, networked with relevant people, and persevered in accomplishing my goals to solve these problems.

To conduct research in Chinese companies is no simple feat. The first step was to obtain a Chinese visa for one year at a university in order to gain sponsorship both for the visa process and for future inquires into my research goals. Using leads from my research committee, I contact two Peking University professors. I also renewed a connection with the Peking University Mandarin Center, where I undergone advanced language training two years pervious. I arranged for one of the professors to write a sponsoring letter which I had delivered to the Mandarin Center. In two weeks, using money I had sent with application, an express letter containing my visa documents arrived. Facing the initial problems of visa and sponsorship, I moved quickly and arranged to have necessary documents delivered and a enrollment letter at Peking University prepared in a total time of less than one month. I was on my way to Beijing to study companies in the Silicon Valley of China.

Two of the three companies were relatively small, with less than ten people. In those two cases, access was not a problem since no proprietary technology or influential information was at stake. Despite this fact, two problems arose: one was how I would introduce myself to these companies; two was how I would explain my research so that I could both gain necessary access to managers and workers and guarantee the participants not to violate their rights as human subjects. I relied on an old friend to introduce me to companies that he knew beforehand. This method guaranteed a minimum of trust, which I subsequently used to explain my research project on the successes of China’s Silicon Valley, a patriotic thing for people in China. This cast my research in a positive light, which facilitated access to managers and workers, as well as revealing the nature of my research that protected individual’s rights of whether or not to participate.

Finally, the biggest challenge I faced in my research was how to get access to a large, prestigious company. I spent one month contacting friends, advisors, and government officials I knew to help me. On a hunch, I emailed to head of Beijing UFSoft for an interview. After the interview, over diner, I mentioned that I needed on the ground information about a large company in China. The executive suggested that I work at UFSoft. This was the opportunity I had hoped for but, knowing how China business and culture work, I could not suggest it myself. I allowed the executive to think that it was he who had thought of the idea. My initiative in setting up the interview, calling on friends to guarantee my character, as well as understanding Chinese culture and this executive’s personality lead to a solution and my access to UFSoft for research. I accomplished my goals through initiative, skill, networking and perseverance that are reflected most poignantly in this example.

Interpersonal Skills

2005-10-20T13:25:00.000-07:00

There is one particular time person in particular, the first six months of 2004, when my interpersonal skills were tested and displayed to the extreme. During this period, I spent half a year amongst the migrants and would-be entrepreneurs who work in the IT/electronics markets of Zhongguancun, the Silicon Valley of China. These women and men are not the lofty paragon of technology virtuosity that China’s Silicon Valley is meant to contain. Instead, they are an eclectic population, coming from all corners of China with education ranging from middle school drop-out to technical community college graduate. Living and working amongst them, I experienced tests of my ideas of privacy, rudeness, hygiene. My responses, from anger and frustration to compassion and understanding, reveal the greatest extent to which my interpersonal skills can be stretched.

Experiencing IT/electronics markets for the first, one sees chaos. Boxes seem to move up and down the crowded aisles by themselves, while people spit, smoke, and throw trash outside their stores, regardless of who may be outside or walking by. But even more poignant for an American are people’s eyes. Glances become stares and shopping for a new printer is more like being an animal in a mobile zoo. Hearing only “ha-lou!” (the Chinese transliteration of hello), one quickly tires of these markets.

But I wanted to understand the mixture of technology and business in China. So, on a daily basis, I came to the markets, meeting people store after store, who constantly drew attention to my appearance, my race, and my nationality. In turn, I emphasized politeness. I observed every courtesy and custom that I knew of. Some one once joked with me that I was “more Chinese than the Chinese.” The manners I displayed had been honed over previous years of experience with China.

Store by store and counter by counter, I used my difference to create similarity. Slowly, a group of regular store owners, colleagues, and even friends emerged against the backdrop of chaos and stares. Addressing elder migrants as “big brother,” adopting Chinese mannerisms and postures, and generally being sympathetic to their opinions (at least initially), I was able to enter circles that exist in the IT/electronics markets.

What is even more significance, however, is that I gained an audience. While I learned about China’s technology migrants and emergent market economy, I also was able to speak to a receptive and interested audience about the reasons for the Iraq war, the meaning of human rights, and how unions are formed. Had I not gained trust and feelings of commonality, I be ignored and dismissed. Instead, open dialogue and thoughtful discussion took place as a result of adapting to behaviors, customs, and forms of address that made the IT/electronics migrants of the Silicon Valley of China comfortable.

Science City Plans Approved

2005-09-18T15:24:00.000-07:00

Beijing City Land Plans Approved
Zhongguancun “Science City” Demarcated
August 24, 2005 on http://house.tom.com
Source: Beijing Business Today (http://www.bjbusiness.com)
Original website in Chinese: http://house.news.tom.com/1056/2005824-45625.html

Translated by Tyler Rooker on September 18, 2005 for http://chinasilicon.blogspot.com

Sketch of “Science City” in Zhongguancun by Zhao Zhenchao

This reporter learned yesterday from the Beijing City Planning Committee that the specific plans for Zhongguancun Science City had been approved. The vice-president of the company responsible for first level developing of the Science City, Yang Jianping of Zhongguancun Science City Construction Limited Liability Company, said: the specific plans were put in place in order to increase benefits from development.

According to the City Planning Committee, the Zhongguancun Science City will run from Chengfu Road in the north to Zhichun Road in the south; from Zhongguancun Avenue (Baiyi Road) in the west to Finance & Economics Academy Road East in the east. This is a total of 331.43 hectares of total land use. The planned total construction is 4.42 million square meters, of which 2.65 million square meters will be set aside for construction by China Academy of Sciences. Insiders pointed out that this is possibly the largest scale land use in a city ever.
The Planning Committee also emphasized that it must combine demands for city landscape, environment, and land development so that multiple levels of construction involved in the Zhongguancun Science City are addressed. Also, it must clarify the plans for a green land system in the Zhongguancun Science City, plans for road and traffic systems, and plans for public facilities and government offices.

The Area is Equivalent to 1.5 Summer Palaces
(See here for an English tour of Beijing’s Summer Palace)

Zhongguancun Science City is located along the development axis of the Zhongguancun Science & Technology Zone. It has an area of over 330 hectares, equivalent to the area of 1.5 Summer Places. Together with Peking University, Tsinghua University and the Zhongguancun western high-tech commercial center, it forms the Zhongguancun Science & Technology Zone, Haidian Park central region. Zhongguancun There are over 25 national research institutes and over 50 national keystone laboratories and development laboratories. There are 16,000 science and technology workers of whom there are over 100 from the two Academies of Sciences. The Science City of Zhongguancun also has a large number of competitive high-tech enterprises. You could say that Zhongguancun Science City is the national treasure of high-tech talent in China.

Tardiness in Constructing the Science City
This reporter learned from related departments that as early as 6 years ago, China Academy of Sciences (CAS) had made plans to construct the largest science city in all of East Asia. In 1999, the city of Beijing and other science and technology departments decided to use a period of 10 years to build Zhongguancun Science City into a world-class science and technology zone.
In 2001, the city of Beijing government and CAS joined hands to plan the science city. In that year, on November 8, the Beijing Zhongguancun Science City Construction Limited Liability Company was formally established, which showed that the Zhongguancun Science City had entered the practical phase. And yet, over three years have passed and construction on the Science City remains in initial stages. Up until yesterday, formal permission to go ahead with the plans by the City Planning Committee had not been given.

The vice-president of the Beijing Zhongguancun Science City Construction Limited Liability Company, Yang Jianping analyzed the situation. He said that the tardiness of construction had three aspects. First, this area totals 331.43 hectares, equivalent to 1.5 Summer Palaces, and so there are difficulties in development. Second, the structure of Zone construction is complex ? the Science City encompasses 25 national research institutes and over 50 national keystone laboratories and development laboratories. These cannot be demolished so demolishment must be carried out carefully to avoid damage. Finally, there have been other problems with demolition that have not been solved.

The Rise of a High-Tech Economic Center
With the issuing of specific plans for the Science City, clear progress has been made in developing it. Specific plans have been integrated with overall city planning and specific district planning. Land use and use intensity in the specific districts has been clarified, while roads and engineering angles as well as environment protection have been integrated. These plans are the direct result of management by the City Planning Committee.

The Beijing Zhongguancun Science City Construction Limited Liability Company vice-president, Yang Jianping, explained it this way: the specific plans have been issues to demarcate the basic height, area, and roads to be encompasses. This is the backdrop to the next stage in planning.

The Beijing Zhongguancun Science City Construction Limited Liability Company has taken on the responsibility of constructing the Zhongguancun Science City High-Tech Industry Innovation Incubator. Starting with land development in 2001, today it has basically completed organization of this land. The Zhongguancun Science City High-Tech Industry Innovation Incubator will take up 33.6 hectares, with the basic function of transferring the scientific research capabilities of the Science City into industrial capabilities. It will become a well-know collaboration and information exchange center domestically and internationally. The Innovation Incubator will also be a high-tech and product training center. According to the plans, within 5-7 years, the Innovation Incubator will take advantage of a perfected infrastructure construction, advanced information networks, lively enterprises, beautiful environment, dense cultural atmosphere, and a modern feel -- a world-class science and technology zone.

President of China area for the Kotler Marketing Company (USA) Tiger Cao, real-estate investment consultant, said in an interview that: “This region has great development future. It will become concentrated area of high- and medium-level income groups. At the same time, because of Zhongguancun’s attractiveness, it will create a large movement of people. Over the next few years, this place will become like the CBD District -- an economic center with high-tech as its focus.

DIY & Potatoes

2005-09-06T20:56:00.000-07:00

DIY -- A Plate of Delicious Sliced Potatoes
Gao Mingxin
http://www.i-chinatrade.com/zgc/zuan/diy.htm

Another person has come to Zhongguancun. In the blink of a eye, he has bought a screwdriver. A few hours later, he has collected a CPU, a monitor, memory and other Zhongguancun “specialties” to take back home. This is “DIY” a newly fashionable phrase in the Village (Zhongguancun’s nickname). Put simply, DIY (“do-it-yourself”) is a three-way contest between a screwdriver, a computer case, and a monitor. “Cultured people” in the Village explain the phrase this way: “DIY is directly oriented to a large number of users. DIY assembly is the bridge between users and component sellers. DIY is the delight of component manufacturers; DIY is the scourge of complete system manufactures.”

A few days ago, the computer industry branch of the Beijing Electronics Merchant Association united with several dozen Zhongguancun brand-name computer manufacturers to present the government with a report. In the report, the licensed, brand-name manufacturers expressed outrage -- how is it that any Tom, Dick, and Harry can make computer assembly into a puzzle game? The report showed that the DIY market is in chaos: some DIY-ers are not licensed but still assemble computers at large scales. This phenomenon should be clamped down upon, the report recommended. There is no quality assurance for DIY products without licenses, and the safety of products is suspect.

Although the word DIY is of recent origin, the history of assembling computers in the Village is a long one. To learn how to eat sliced potatoes with vinegar and sugar, is it necessary to learn how to DIY potatoes? No, and yet many people who use computers start to learn about them from DIY. If a citizen wants to start work but has no abilities, he/she is not even given a chance to DIY a wooden stool in middle school crafts class. But if one’s dream is to use a computer -- starting an information revolution in the household -- one can actually use this passion to DIY computers. Part of the motivation for DIY comes from the simple fact that a portion of price goes to software makers; another portion goes to workers at the computer company. Men and women of the world prefer to grasp their pocketbooks tightly. Even if the memory strip doesn’t exactly fit in the motherboard, it is of little consequence -- take it and your screwdriver back to Zhongguancun.

In practice, those who can DIY potatoes but not computers need not worry since there are specialists in Zhongguancun’s electronics markets who DIY machines just like putting together a puzzle -- sticking together the different pieces and finishing within an hour. For the thousands of computer market counters, DIY is a Zhongguancun specialty. But the happiness of this bunch has become the worry of that bunch. The DIY business makes brand name manufacturers furrow their brows. With the appearance of licenses, brand names are more authentic and trustworthy. As the Chinese proverb foretells, “the army of the emperor will always defeat a lesser known army.” But history has shown that Li Zicheng still was able to occupy Beijing. The DIY-ers in the present component market are still riding high. “On Sunday’s, individual computer assemblers resemble a rushing stream -- they encircle the display areas of dozens of manufactures. In one day, every manufacturer has revenues over 100,000 yuan.” If everyone’s bowls were full, there would be no starving people suffering from famine. Isn’t it a good thing that everyone can enjoy DIY?

Demand has freed the market, so limiting DIY will not work. The debate over DIY does not boil down to a simple statement, nor is it a fundamental problem. DIY has real significance for the formation of the market and for rules of the market. DIY has relative standards that are based on price. Just as some people wear alligator skin shoes purchased from a store, others wear handmade vagabond shoes: it is not a question of whether or not your toes are comfortable -- price is the decisive factor. It is said that DIY products lack quality assurance. That is indisputable. Alligator skin shoes are more durable than vagabond shoes. But, as there are no DIY aircraft carriers, and no DIY B-52 bombers, there is little reason to fear.

10-20% of the U.S. computer market is personal or professional DIY assembled computers. But foreign DIY shows that red-hot demand centers on quality -- people who put a computer case together with a monitor suffer the scorn of experts. The originality of DIY comes from the pleasure of using one’s own hands in the process. If DIY creates a plate of delicious sliced potatoes but at the same time leads to conflict in the household, then losses outweigh gains.

Translated and edited by Tyler Rooker on September 6, 2005 for
http://chinasilicon.blogspot.com

Copyright help by original author

The Value of Money

2005-08-26T08:43:00.000-07:00

Does China have the Second-Largest GDP in the World?

According to statistics reported by the China Daily, China's gross domestic product for 2004 was in the neighborhood of 13.65 trillion yuan (or 1.65 trillion USD, with an exchange rate of 8.28 yuan per dollar). Using only the exchange rate to convert yuan to dollars, however, does not reveal the entire story. Indeed, the CIA ranks China second in the world, behind only the United States, in terms of GDP. The figure they use is 7.26 trillion USD for China's GDP.

In terms of only the exchange rate (8.28 yuan per dollar) the World Bank ranks China's economy 7th in the world at 1.65 trillion USD. The IMF ranks China sixth in terms of GDP.

But when purchasing power parity, rather than the exchange rate, is used to “compare” China's GDP to those of other countries, the situation changes. This is why the CIA ranks China second in the world. This is also true of data from the IMF (see list here).

Purchasing power (also known as PPP, or purchasing power parity) is the principle that money used domestically can be exchanged for a certain amount of goods and services. Put simply, money has a certain value. To compare the value of money, one cannot rely simply on the exchange rate. The value of 1 yuan in China, that is the amount of goods and services it will buy, can be compared to the value of 1 USD in the United States. To make this comparison, economists choose a “basket” of goods and services and then compare the price in different countries, usually using the U.S. basket as a benchmark. In theory, a vast discrepancy between exchange rate and purchasing power will lead to arbitrage, since one can simply keep buying goods at the lower price until the exchange rate equalizes. China pegging the yuan to the dollar, however, keeps the rate stable regardless of inflows of foreign dollars. (There is a good article in the April 4, 2005 Business Week on “Hot Money,” but it is available to subscribers only).

The Economist has compiled a Big Mac Index which uses the price of a Big Mac to relate the purchasing power of currencies to each other (the benchmark is a $3 U.S. hamburger, so if the same burger is cheaper in China, purchasing power is greater there). For China, they cite a figure of 3.43 as the PPP of the dollar. This would imply, using the Economist Intelligence Unit's figure of 1.68 trillion USD for China's GDP, a "Big Mac" adjusted GDP of 5.76 billion USD. That is, in terms of purchasing power, China's has a GDP of 5.76 trillion USD (FIY the Economist Intelligence Unit’s own figure for GDP in terms of purchasing power is 7.55 trillion USD, using 4.5 for its purchasing power ratio or a yuan-to-dollar rate of 1.84).

The more common figure for understanding the purchasing power of China's economy is 1.8 (from the World Bank's World Development Indicators report, listed here). Using quick and easy math, divide the exchange rate (8.28 yuan per dollar) by the purchasing power conversion factor (1.8 yuan per dollar) and you get a unit-less ratio of 4.6. What it means is that 1 USD buys 4.6 more value in China than in the United States. Converted in this way, China's GDP ranks second in the world.

I am not an economist. The above was gleaned from the web over the past week. I can only provide my experiences as a confirmation of the relevance of purchasing power to converting statistical figures that come out of China these days.

Two anecdotes
Before I went to China for the first time with University of California's Education Abroad Program in 2000, I attended an orientation hosted in Berkeley. One of the speakers, a past participant, noted that one should not argue vigorously with petty traders over a few yuan. Later, I expressed my unease with such a blanket statement. An economics undergraduate, who was giving me a ride, vehemently defended the speaker. The ride home was quite unpleasant as I stuck by my conviction that despite the fact that a couple of yuan was only a quarter or two, I did not want to give away my quarters. I also felt that such unequivocal rendering of exchange was dismissive of the context one might encounter in China.

Living in Beijing for several years since the yuan polemic, I discovered the real power of money. In Beijing, in Zhongguancun, a nice two-bedroom apartment cost me 2,400 yuan a month (about 300 USD). This was a nice area, convenient, clean, and safe. But my friends in China chided me that it was too expensive, since the apartment lacked a refrigerator. I scrimped money by eating fast food (a bowl of rice topped with one item of cuisine) for 5 yuan a meal. But herein is the evidence for purchasing parity calculations.

In China, or Beijing nonetheless, the cost of daily living is much cheaper than in equivalent cities in the U.S. Therefore, a figure such as the ratio 4.6 worked out above for multiplying China’s GDP (or other figures such as the Big Mac Index) is reasonable. An 8 yuan meal in Beijing converts via the exchange rate to a 1 USD meal. But using the purchasing power multiplier, it is really a 4.6 USD meal. That is much closer to actual experience, since I can buy rice topped with food items in San Francisco for about 4 USD. Rent, too, should be viewed this way. My two-bedroom apartment in Beijing only cost 300 USD a month. But in real purchasing power terms, it cost 300*4.6 = 1,380 USD a month. That seems to fit reality much closer, since 300 USD rents you only a storage unit in San Francisco, while 1,380 USD would get you a nice two-bedroom apartment.

Purchasing power arguments notwithstanding, the official exchange rate of 8.28 (or, now, 8.11) yuan per dollar tells us little about what a dollar or a yuan actually purchases in China. Certainly, the point can be made that Starbucks coffee in Beijing is more expensive than it is here (it costs 16 yuan or 2 USD for a cup of Starbucks coffee in Beijing). But the point is that that coffee costs more in value in China than it does in the U.S. To understand the equivalence in value, rather than in monetary, terms, one must use purchasing power. Hence that cup of Starbucks coffee really costs you 9.2 USD in terms of equivalent value forsaken to imbibe the brewed beverage. There are real reasons to vehemently bargain over “a few yuan.”

What is Piracy to Microsoft?

2005-08-16T01:21:00.000-07:00

Piracy or Monopoly?

In Zhongguancun, China's Silicon Valley, piracy of Windows XP is rampant. That is beyong dispute. From the migrants who approach you outside the major electronics markets to the DIY (do-it-yourself) computer assemblers, no one pays for Windows. The reason: cost. It costs over 2000 yuan ($250) to buy Windows. Pirated copies cost 6 yuan (three quarters). But does this subvert or sustain Microsoft's monopoly on operating systems?

"The bird who sticks out its head gets shot," goes a proverb in Chinese. The meaning, for large companies like Baidu, UFIDA, and Lenovo, is that if they use pirated software, they will be "shot" by Microsoft, in court. The fly-by-night migrant, who only make 800 yuan ($100) a month selling pirated software can be arrested, bankrupted by fines, and sent home. But what would that net Microsoft? Nothing, since the fines would go to Beijing city government police. How does piracy help Microsoft?

The answer, from one point of view, is that by continuing piracy, Microsoft is able to sustain its monopoly in China. There are no Chinese operating systems. There are none even in the works. Why? Because they will be pirated as well. Piracy undercuts Microsoft but it also undercuts would-be Chinese entrepreneurs who could (undoubtably) create a Chinese proprietary operating system that could sell for 200 yuan ($25). That is the threshold price that would keep Chinese entrepreneurs profitable and return their investment costs. But why doesn't Kingsoft, the Microsoft of China, attempt it? Piracy.

Piracy, in the case of China, does take profit from Microsoft. But I would argue that Microsoft also benefits, and even profits (as the proverb predicts) from piracy. Without piracy, 100 operating systems, like Chairman Mao's flowers, would bloom. They would undercut and eventually end Microsoft's monopoly on operating systems.

Next time Microsoft complains about piracy, make sure they point out exactly why. 4/5 of the computers in Zhongguancun are name-brand, and come with official Microsoft licenses. 1/5 are DIY, are cheaper, and come with pirated Windows. So where is profit lost with respect to profit gainined?