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.
