More Chinese travel nightmares

Have I mentioned that travel in China is terrible? I'm sitting at Beijing Capital Airport right now. My flight was supposed to take off at 6 PM. It's now 7:30, but there is no indication of whether or not my flight will even take off tonight. It hasn't been cancelled, or even officially delayed yet. Chinese airlines don't delay a flight until a new departure time has been established. So even though the plane I'm supposed to be on is still parked at the gate in Shanghai, my flight is still "on-time."

All flights until tomorrow evening are also fully booked, thanks to undercapacity on the Shanghai-Beijing route as well as general equality among customers. Whereas in the United States, people would get bumped or volunteer to be bumped and get compensated, China treats everyone the same. All well and good for social equality, but I would pay $1000 to get back to Shanghai right now to see my wife, and the farmer next to me who paid $40 for his ticket is going to go first. Capitalism without a doubt leads to more efficient outcomes than communism.

Update: News reports indicate the frequent heavy fog in Beijing is due to particulate matter, i.e. pollution.

Auto update

The timing of my last entry was quite... timely. Today's WSJ Asia front page article is about the push for cheaper cars in emerging markets. I also want to correct a comment I made in the last post. The cheapest Chery QQ, with a 800 cc engine is $3,600. But, it's not the cheapest car available. That prize goes to the BYD F1, which can be had for just $3,000.

Crazy automobile market

Visitors to Beijing always remark about the horrendous traffic situation. There are seemingly millions of vehicles clogging the roads at all hours. Add this to an ineffective subway system, and it can take over an hour to just get across town.

In Shanghai, it's less of an issue because the city charges outrageous amounts for a vehicle registration/license plates -- currently about $5,000 USD! In Beijing, the fee is less onerous and there are plenty of cars and taxis to go around.

For my latest project, I have the opportunity to look at the market for luxury autos in China. So far, I have been very impressed with the Chinese appetite for foreign cars. Imported cars made by companies like Volvo, Lexus and Mercedes cost about twice the amount they do in the United States. In China, a Mercedes S600 lists for more than 1.7 million RMB - $225k USD. Yet there are still over 10,000 people per year lining up to place an order.

Of course, cars in China are a bit different, especially those that cost more than $40k. Chinese consumers like big cars, particularly cars with large rear passenger compartments -- if you can afford a nice car, you probably aren't driving it yourself. Therefore, car buyers focus less on the controls upfront but rather the experience in the back as a passenger. Also, Chinese people don't drive fast - they never get far enough outside the city or away from traffic to go Autobahn speeds. So you can end up with some relatively underpowered engines in otherwise big cars. Unlike Germans, the Chinese consumer doesn't like to "feel" the road either. They want a soft ride that makes them feel like they're sitting on a cushion. That's all fine and dandy since they aren't making high speed turns anyway.

There are locally made versions of foreign cars for sure. Volkswagen and GM both make most of their cars for the Chinese market in China. Toyota is strong as well. But what about purely local cars like the Chery and Great Wall? They are cheap; you can pick up a Chery QQ for $4000. They certainly get the job done and are very popular in Beijing. In Shanghai, since the cost of the license plate will double the overall cost, most people opt for a VW, or no car at all.

Online travel sites

Online travel sites are not the best here in China. The two market leaders, Ctrip and eLong, are okay for booking hotels, but the flight selection is difficult. Most of the time, it's easier just to go to a travel agency in person to buy the ticket and pay in cash. Also, for some technical reasons, local mom-and-pop travel agents can often give you lower prices.

For international flights, I have resorted to using Kayak at times, since it's less complicated than visiting a travel agent to browse flights. Even if I don't purchase the tickets through Kayak, it can at least tell me what flights are available. However, I was using it recently to check out flights from Taipei to Kuala Lumpur (I know it's not a very popular flight segment). Here was one of my suggested itineraries:

Flight Information – Wed 21 Nov 2007 This flight leaves and arrives on different dates. American Airlines Flight 7958 Operated by EVA Corporation Departs: 11:55p Taoyuan Intl (TPE) Arrives: 7:40p Los Angeles (LAX) Coach Aircraft: 777 11h 45m [ Layover in Los Angeles, CA (LAX) for 16h 05m ] American Airlines Flight 169 Departs: 11:45a Los Angeles (LAX) Arrives: 4:40p Narita (NRT) Coach Aircraft: 777 11h 55m [ Layover in Tokyo, Japan (NRT) for 21h 00m ] American Airlines Flight 5838 Operated by Japan Airlines Departs: 1:40p Narita (NRT) Arrives: 8:20p Kuala Lumpur Intl (KUL) Coach Aircraft: 767 7h 40m

	Airfare	Taxes & Fees	Total Cost
American Airlines	$2125.00	$81.30	$2206.30	select

I'll do the math for you: 68 hours and 25 minutes to travel 2000 miles. That's an average of 29 miles per hour. I could probably rent a speedboat and get there faster. Surprisingly, it's also slower than the Taipei-Hong Kong-Shanghai route. Needless to say, I think I'll look elsewhere for a ticket.

Chinese politics

The 17th Chinese Communist Party Congress just ended in Beijing today. Last week, I was in Beijing when it was still in session and definitely noticed a lot more government cars (black Audi A6's) and BMWs (non-government party members?). There has been a bit of a change in the party leadership in a realignment heading into the 2012 selection of a new president. Most notably the vice-president, Zeng Qinghong, has stepped down and the new Shanghai party boss, Xi Jinping, has been elected to the central committee.

I'm not expert in Chinese politics, but here is a brief backgrounder on Shanghai and its relations with the central government, which is of course based in Beijing. Shanghai (and East China) has always played a small role in defying the Communist party. The Nationalist government was based in Nanjing - just an hour's train ride away from Shanghai. Not until Jiang Zemin came to power in 1993 did Shanghai receive a little more attention from the national government. Notice the correlation between Jiang's promotion to head the country and Shanghai's recent rise to wealth and power.

Hu Jintao, who is of course not from Shanghai, is still trying to rid Jiang's influence from the party leadership and has been trying to get rid of people still loyal to Jiang. Chen Liangyu, the former party boss in Shanghai, did a good job in continuing Shanghai's economic development. In fact, he did "too good" of a job. The economy was overheating, driving real estate values and inflation up. Good for Chen, who was enriching himself with side deals, and good for the city, which was becoming a booming global center for commerce. But it was bad for Hu, since Chen defied central party leadership and allowed Shanghai to outshine Beijing. So, long story short, Chen was arrested for corruption and graft. Experts say that he is indeed guilty, but major party members participate in similarly illegal activities. It is only his disfavor with Hu that lead to his demise.

My Chinese tutor told me an interesting story about when she worked at the local newspaper a few years ago when Chen was arrested. Party officials came in and deleted all official photos of Chen. A coworker had given recorded speeches mentioning Chen and how the newspaper was doing great in following his guidance. The speeches were edited on tape to remove all references to Chen.

Living in Shanghai, it's sometimes easy to forget that China is still a totalitarian state. But it's times like these, when China tries to show it's "openness" and "democratic" ways that it really shows how far away it is from a truly free country.

Chinese design falls a little short

I volunteered to help our recruiting team a few weeks ago, and in gratitude, they gave me a "really nice" wallet. Truth be told, it's pretty good quality leather, has the firm name embossed on the front, and is a reasonable size. I had been thinking about using a vertically-oriented wallet since carrying around a substantial amount of cash gets difficult when you put it in a bifold (forget about trifold - you'll end up with a four inch thick lump.)

Anyways, when I actually tried to use it, I realized the design is terrible. Like many Chinese-designed products, it's not quite there.

First off, the pocket for cash is difficult to use. The wallet is designed like a traditional bifold, but twice the height. As a result, the pocket for cash is actually just a big pocket, about 8x6 inches. How do you put money in it? Like a traditional bifold, in which case half the pocket is empty, or as two unseparated vertical pockets, in which case the money slides back and forth? Also, if you notice in the picture, the pocket is actually about 1 centimeter too short for Chinese bills (it's even worse for american bills). Am I supposed to use it with money sticking out the side?

Okay, no worries, there are plenty of slots to carry my multitude of VIP cards, prepaid dry cleaning and massage cards, airline membership cards, etc. But yet again, it's just slightly too small. I managed to squeeze my bank card in, but you'll see in the picture that business cards don't fit.

Also, what's the deal with the strap? Are the designers worried that they've made the pockets too big and the cards will slide out? Or did they try to come up with a way to use all the extra leather that they saved from making the other dimensions 10% too small?

Just another example of Chinese design. It can look good, but it's like no one bothered to try using it before making a few thousand and dumping it on the market. For now, it's going to go up on the shelf next to my Chinese stapler that is 1 inch long and holds 15 staples.

Funny signs

Okay, I finally got around to downloading some pictures off my cameraphone. Here are two gems that snapped of signs that I found downright funny. I know they are hard to read; click on the pictures to enlarge them.

More western food

Don't get me wrong, I love Chinese food. This year has been a wonderful culinary adventure. However, my readers may have noticed that lately, I have been trying to find sources of good Western food to sustain my need for something different. A few weeks ago, I had the best pizza I have ever tasted outside the continental US. It had a thin crust, and a delicious amount of cheese that was oily enough to require napkins to sop up the excess. It was almost like being in New York. And the quality was a huge surprise, because I found my pizza at an oasis within the desert of culinary experience known as Shanghai Hongqiao airport.

One of the many reasons Chinese air travel sucks is that the food is uniformly bad in the airports. There isn't even a random McDonald's or food court to take away the monotony of rice and noodle places that all have different names but identical menus. In Shanghai, though, a branch of the Italian Bricco Cafe chain was recently opened by an American. At least, I assume he was American because the guy was wearing a Yankees hat and was speaking to his Italian partner in English.

God bless globalization. Now if only Beijing Capital Airport could add a Starbucks.

Chinatown in China

This picture could very well have been taken in San Francisco. There is a steeply inclined street, signs in Chinese and English (if it were a movie, you could even hear them speaking Cantonese). Of course, the photo is of Hong Kong, but my latest trip to Hong Kong reminded me of how similar it is to so many Chinatowns in the United States. Familiar smells, a mix of Cantonese and English, dirty water from wet markets running down otherwise clean streets, and the occasional Caucasian face make you forget that you are in fact in a region of China. I have many friends out here who want to move back to the West Coast, but I have to say, if you have to live in China, there are much more difficult places to live (like Beijing).

More things to remind me of home

Went to brunch today in Hong Kong with friends. The restaurant was very Western -- it was filled with Caucasians and had an English-only menu. They had a sign noting that their bagels were from H&H in New York, so of course I had to order one. While it didn't taste exactly like the warm original, and it wasn't slathered with tons of cream cheese, the lox and onions were good enough to remind me of how some things are impossible to get in China.

Things to do in Shanghai

Some friends of mine came through China last week on a two week tour. I met up with them in Beijing for a few nights, but didn’t get a chance to spend a lot of time until they arrived in Shanghai last weekend. For other potential visitors to town, let me share a few bits of their itinerary to help you out.

Sights to see

Overall, I have to admit that Shanghai is a little short on high quality tourist locations. It doesn’t have the history of Xian or Nanjing, the culture of Beijing, or the beauty of Hangzhou. But here are a few suggestions.

The Maglev – If you fly in or out of Pudong airport, be sure to take the Maglev at least once. I doubt you will ever go so fast so close to the ground.

The Bund – A must-see destination, but don’t get your hopes up too much. It’s essentially just a photo opportunity. This is the riverbank where old Shanghai, represented by the 19^th century buildings, faces new Shanghai’s 80 story skyscrapers. A writer once remarked that the Westerners in Shanghai like to take pictures of the old Shanghai and marvel at what it was. Chinese like to take pictures of new Shanghai and wonder at where it’s going. A bit of a stretch, but not altogether untrue; I have never seen any locals taking pictures of the old buildings.

Xin Tian Di – Good place to wander for an afternoon, especially if you are into real estate development. Should be a case study on how you can change people’s conception of retail and dining.

Grand Hyatt – Another example of how Shanghai’s best sights show off the modernity of the city. You can pay 50 RMB to visit the observation deck on the 89^th floor, or go to the 88^th floor and spend a minimum of 100 RMB on drinks and food. My suggestion is to go to the 88^th floor and relax while enjoying the view.

Places to shop

Shanghai should be on every shoppers list of cities to go to. Forget about branded items, but everything else is cheaper.

Yu Yuan Bazaar – Souvenirs and jewelry make this a good place to get all your gifts for friends back home.

Fabric Market – Don’t leave town without getting a few shirts or a suit made. I have never heard of someone complaining about the overall value of a custom fit $10 shirt. Even if it’s not designer, the fit will be better than any off the rack shirt.

Tea shop – I went with my friends to a tea mall for the first time. Even if you don’t want to buy tea, go for the experience. The vendors will take the time to pour you a whole bunch of different teas for tasting.

Fake market – If you don’t want to go to Hong Kong to lay down $2k for a watch, spend $20 on a fake one instead. There’s one at 580 Nanjing road and another set at the Science Museum Metro stop in Pudong.

Places to eat

If you’re in China, you need to experience the range of food. Even if you’re not adventurous enough to want to try abalone, shark fin, or dog, you’ll find all sorts of delicious yet unique foods to suit your tastebuds.

New Jishi – Homestyle Shanghainese food at reasonable, but not really cheap prices. They have a location in XinTianDi that is perfect to contrast old Shanghai vs. new Shanghai.

Yu Xin Sichuan – Like New Jishi, this is a small chain (5-15 locations) that has succeeded thanks to its good food, clean environment and moderate prices. Get the Ants Climbing Trees noodles (no ants or trees involved in the dish) and anything “water cooked” which is not really simply water but really hot peppers, Sichuan peppercorns and meat boiled in a liquid that helps the flavors mingle.

Hot pot – I prefer Dollar Shop because it offers individual soup bowls to cook your food in. That way if people like the traditional spicy hot pot they can get it, but others don’t have to suffer. This meal takes a while to eat, so don’t go if you are in a rush, but I think Westerners like the experience of cooking their own food and also knowing exactly what they are eating.

Din Tai Feng – Yes, it’s originally from Taiwan, but no better place than Shanghai to experience what is regarded to be the best place for xiao long bao (soup dumplings) in the city.

Sheng Jian Bao – I personally like a place just south of the City Temple. It’s quite the opposite of Din Tai Feng. While they offer xiao long bao, the better choice is zheng jian bao. Similar filling, thicker fried wrapper. Prices have recently gone up to 2.5 RMB for an order of 4, but it’s still quite the deal. Eat on the street with greasy fingers, or eat upstairs for a slightly more civilized snack.

Luxury watch shopping in HK

I’m on my way down to Hong Kong right now. I’m going to Taiwan again, so of course I have to stop by HK first. Instead of a quick transfer, I figured I’d go a little early and spend an extra day meeting up with friends and looking for watches. As I’ve mentioned on this blog before, Hong Kong has more luxury watch retailers than any other city in the world. I heard that 15% of all Rolex watches are sold in Hong Kong. The lack of sales tax combined with its central location in Asia with easy access to China, Japan, Korea and the rest of Southeast Asia make for a ripe opportunity.

Coincidentally, as I was waiting in the Dragonair lounge, I picked up a copy of Time Style & Design which features a story on the luxury markets in the emerging markets of China, India and Russia. The data presented is very interesting.

Russia

Stereotypes hold true. Russians seem to love to flaunt their wealth with extravagant items like helicopters, bejeweled pencils and gold baby bottles. The best known luxury brands are flashy designer labels like Versace, Armani, Dolce & Gabana, and Dior. They want to be smelled as well as seen; “75% of affluent Russians bought one or two new fragrances in the past six months.”

India

The country continues to take one step towards the west while remaining distinctively Indian. The three best-known luxury brands in India are all from India: Park Avenue, Allen Solly, Reid & Taylor. It’s just another example of India’s insular nature (especially in regards to consumer goods and retail.) Less than 10% of Indians know of Marc Jacobs or Yves Saint Laurent.

China

The middle kingdom is already the battleground for luxury brands. China is projected to surpass the US to become the world’s second largest consumer of luxury goods behind Japan by 2015. Chinese preferences tend to be more understated (relative to Russia, not necessarily the US.) The best known brands are Rolex, Lacoste, and Chanel. According to the article, “22% of affluent consumers in China own a (real) Rolex.”

Well, count me in. While Rolex is a little flashy for me, I too want to be able to wear a watch that is hand crafted and assembled in Switzerland. People definitely look at watches out here, so it would be nice to have something for them to notice.

Mmmmm, roast beef

To celebrate my imminent return to the United States, I ordered a roast beef sandwich from NYC Deli located in downtown Shanghai. The picture shown here is not my sandwich, but representative of what I got. Prices are reasonable (~40RMB) and include delivery, unless you live on the further reaches of downtown like I do. Then, it costs 15 RMB extra to deliver. The meat was good and the was lettuce crisp. Bread could definitely use some work. I don't know why it's hard to make bread in China. Maybe it's the lack of experience with ovens. Nonetheless, 'll definitely be ordering from them again.

End is near

Another long drought of posts caused by some busy weeks at work securing my next project. Well, now that's done and it looks likely that I will be done with my work here just before Christmas. Twelve more weeks and I'll be filling out the paperwork to confirm my move back to the US. Due to a wedding in India, I probably won't physically return to stateside until early January, but it's nice to know that I am almost done with work.

It's not that I have not enjoyed my time out here, but anybody who lives out here for a little while will understand when I say that I am looking forward to being back in United States. If presented with the right opportunity to return (this time with Katie), I would definitely consider it; China is going to be powering global economic growth for a number of years to come. However, it will not be an easy decision, because China still has so much room to develop on a social level.

Needless to say, though, I'll be home before the year of the Pig turns to the year of Rat.