Monday, 12 July 2010


An article in the free Newsweek magazine that accompanied me during my flight to Shanghai, inspired me to write this weeks journal. Newsweek is one of those magazines that reminds me of wikepedia, i'm never sure how true the facts, figures and numbers are? Having wrote the odd study myself, I know how much research is needed to put something together that talks about the differences across continents, countries and cultures. To get your facts correct takes months (or at least weeks) of investigation, analysis and confirmation. Yet Newsweek reals off story after story, full of facts, and figures. Either they have an army of writers, journalists and investigators or they make it up?

Either way the story entitled "The post-China world - The end of the boom is now in sight, and the ripple of slower growth will span the globe", made me think of another impeding crisis heading towards China's meteoric rise to arguably the most powerful nation in todays messed up world.

The story concentrated on the stabilisation of China's economy, slow down in growth and the similarities with Japans boom and bust economy 10 years earlier. It concedes that China's enormous population, and particularly the poor element of its vast human resource will probably continue to fuel cheap labour and cheap export for many years to come, but highlights the lack of passion for internal consumerism as a key reason why it will not be able to balance the drop in demand and competitive advantage it currently sees, as costs and particularly wages increase. True or not the story was backed up by the usual plethora of learned comments and W.H.O. Facts and figures.

The story I would like to tell is one that also suggests the demise of the country I am currently travelling to, and one that seems more like home than any other these days.
I had mentioned previously my old PA Hu Jin, a likeable character, educated in Malaysia and England he was amongst the 1st generation born as result of China's single child policy. Introduced in 1979 by Deng Xiaoping, the Policy was introduced to try and reduce the enormous population growth that burgeoned the countries development, and proved a massive drain on available resources. Growth which led to an extra 15 million people every year! *Growth between 1961 and 1980 ran at 2.2%.

The positives of the initiative are only visible on a balance sheet, it is estimated that the policy has prevented an extra 400 million joining the throngs. However to the foreign visitor, people still hang on for dear life from every nook and cranny, for example, the entire population of Toronto pass through Shanghais underground system every day, and the monthly number of children born in China is equal to the population of some of Europe's major Cities. The effect of this staggering growth leads to numbers like 15,500 new vehicle registrations in Beijing alone - every day! The numbers are mind-blowing, however without the restrictions in place, the situation would be much, much worse.

The negatives of the single child policy are evident only when you know them, and then start to look hard at the situation through the eyes of the young, the elderly, the adopted and the aborted. For every 100 female children born there are 114 males born, which is as a result of unnatural selection. The sexing of unborn babies through scans is illegal, however China has become the home of selective abortion, with more than 15 million official abortions per year (unofficial figures are much higher) or to put it into context, the population of Los Angeles aborted every year, why? Well a multitude of reasons, but mainly because they were female. Like many developing countries, China values sons over daughters, the difference in China is that due to the single child policy - you only get one shot!

The need to have a male son is not as you imagine to do with family name or male dominance in the workplace, in fact in many of the new industries responsible for Chinas incredible growth, females workers are dominant. I once visited a Japanese company called Takarta in a Shanghai suburb, where of the 3000 employees 2980 were female! specifically recruited for their dexterity, obedience and loyalty. Ever since Mao, the female worker has had as many rights as the male, in fact recent changes in employment law favour the female employee - on paper at least.

The need to procreate a male offspring is more to do with a complacency towards the state pension system. It was always expected that the senior son would take up the role of bread winner, carer and provider to his elderly parents come retirement. This was fine when you had 3 or 4 children, the odds were that one of them would outlive the parent, and one of them would be male. The introduction of a single child rule, has led to a concern that if you have a daughter and they get married - that they will be required to support their husbands family in old age, and thus leave the daughters family without a sponsor. The dependance on a son has become enormous and has led to a share increase in both selective abortion and female children being put up for adoption.

This I would suggest is one of the biggest single threats to the continued growth of China. Hu Jin is approaching 30, and his parents have just entered their 50's. They are the lucky ones, they have a son who will continue to provide and care for his/her parents long into old age. for the tens of millions who only have a single daughter, they have to hope that her husbands family are` younger, richer or healthier than them? Added together with the fact that people are now starting to live a little bit longer, and the labour market is getting tougher for the normally less educated middle to late aged employee, a vast problem dawns on the horizon.

As with all metrics in China the numbers are amazing, it is estimated that a current 134 million people are in retirement, and that this will increase to 500 million by the year 2050, and as the national pension scheme only encourages around 15% of the population to contribute, the planned shortfall is catastrophic. The overall slowing of population growth is one thing, couple this with ageing, lack of pensions system and the imbalance of the sexes all add up to a worrying future.

Nobody knows what will happen when an extra 100 million or two are added to the retirement list each year, but it is a sure recipe for civil unrest, in a country facing so many more civil liberty and unrest issues I wouldn't be surprised if this is the one that tips it over the edge!

Sunday, 4 July 2010


This week has been one of the most frustrating on record, all due to airline delays. It started well with my scheduled flight leaving London's Heathrow on Time last Friday, arriving early Saturday morning in Shanghai. And despite being greeted by a grey, wet an intolerably humid Shanghai my first few days went to schedule and quite smoothly for this side of Asia.

I had planed to travel to Shenzhen on the Wednesday from the newly opened Hongqiao Airport Terminal 2, I had been there during its opening week in March, and was extremely impressed by the cleanliness, efficiency and organisation - but then again after experiencing the worst of Chinese air travel - adding soft toilet paper to the toilets would have been considered an enormous improvement. I was dutifully informed at the check-in desk that flights were seeing some delay due to the volumes of air traffic, when seeking clarity on how long the delay could be, the corporate "at this time were unable to say" response always makes you wonder why you bothered asking. Not put off I quickly traversed the minefield of security and passport control - as a word of advice, don't bother taking off those watches, rings, metal hips and iron lungs when approaching the security metal detectors in China, they are set so sensitive that they can pick up the mercury content in your blood, either that or its just part of the PRC's job creation scheme. Having walked through literally thousands of metal detectors in dozens of airport I have, and have never seen anyone go through without being subjected to a full body frisk afterwards.

One change over the last couple of years in the local airports, has been the introduction of some commercial variety, with the opening of Starbucks, Costa Coffee, Burger King and McDonanld's, you now at least have the choice to clog you artery's with good old western cholesterol, rather than the Chinese fast food MSG. Pudong airport used to be one of the worst culprits with all of the concessions inside the airport being strictly controlled by the local government - which meant selling only noodles, wooden fans, noodles, chop sticks, noodles and tea. So with this in mind I headed to Starbucks for a large cup of Italian Cappuccino and a slice of New York Cheese Cake (try and find the irony there!).

One eye on the notice board I relaxed in the view that my plane would be delayed the regulatory 30 - 50 minutes, and as I was arriving the night before the meeting, any delay was eating into my time rather than the companies. Second bucket of coffee, and three hours later I started to worry that the TV screen in front of me must be broke or I had missed a Chinglish translation telling me that the flight had been canceled. I wondered down to the gate to find several hundred other hopeful passengers milling around the desk, checking watches and bawling into their mobile phones. I sent a few emails, answered some phone calls and made the next couple of hours as productive as I could, then all of a sudden movement, at first a trickle, then an awareness and finally a stampede. I gathered my things, and ran towards the scrum-down appearing in front of me. Fantastic, I thought - we would soon be on our no. The stampede was actually the rush to get the free food that the airline was dishing out to quell the discord within the waiting passengers. You would have thought they were handing out life jackets on the Titanic, but yes you guessed it - Noodles.

The disappointment caused me to do what any red blooded Englishman would do - head for the bar. After my 8th bottle of TsingTao, which I insisted stayed piled up on my table - much to the waitresses dismay and disgust, we entered our 8th hour of delay and midnight. Ushered from the bar as the whole airport came to a shutdown, I depressingly walked back to the gate. Still no action, until an hour later when we were told that in fact we would be leaving soon, however we all needed to collect a new boarding pass as the seat numbering was different on the replacement plane. (The original plane must have still be in pieces with engineers scratching their balls and their heads).
Exchanging boarding cards doesn't sound like scaling the Eiger or swimming the Atlantic but the ensuing riot would have made you think that the crowd had been asked to renounce religion, hand over there first born and accept Tibetan independence. The airport security were called in at first, and them the real police. The crowd displeased with the airline staff, and had taken it upon themselves to trash the check-in desk, tear the boarding passes from the 6 stone attendant, ridicule her to tears and try and storm the plane - I watched on, jaw open, mainly concerned about the additional delay they were causing me, and the handful of other sensible (punch drunk) passengers almost to the point of despair. I squeezed through the mela and finally seated on the plane. We finally took off 10 hours later than scheduled, but feeling relieved, tired, but relieved.

We arrived at out destination Shenzhen at around 4am, the temperature was 36 degrees in the airport, with a humidity similar to that of an under water sauna. Making my way to the luggage carousel I captured a strategic slot to embrace my case and escape to hopefully a waiting car and driver. 5 minutes passed, 10, 20, 40 - if your looking for the reason why the Chinese are so slim, stand in Shenzhen airport in July, and watch the fat literally ooze out of your skin.
The ground staff started to look bemused at this point and started pointing at the conveyor, they realised it had broke and they would have to man handle the luggage to overcome the problem. I finally arrived at the hotel at 6.00am, I had a meeting at 9am and collapsed on the bed. The alarm sang out at 8am and despite my body being tied to the bed with high tensile steel I managed to get into the shower,then just time for a shave - I looked into the mirror to wonder who the pimply teenage youth was staring back at me, then a quick inspection of the rest of my body revealed that the spots on my face were not the result of some adolescence hormone imbalance, in fact I looked like a child had sat there with a marker pen and tried to cover my whole body with red ink, I would have been better off sleeping in a bath of hungry Piranha - the Mosquitoes had attacked.

The return journey wasn't much better, a four hour delay, a process of unchecking and rechecking baggage, purchasing a 1st class seat on an alternative airline to try and beat another mammoth delay to find out that this flight would also be delayed, a 50 minute wait for a Taxi in the same sauna as before, and running out of cash to pay the driver, all culminated into a longing for a western airline, with western staff and a flight home. So as I sipped Champagne sitting in my Virgin Airways flight the following day, I relaxed in the smugness one can only feel as a true Brit. Only to be quickly punched in the face as the Pilot indicated a 3 hour delay due to Chinese air traffic control - oh joy!!!