Tis the very first day of
January in 2015 and I find myself comfortably ensconced in yet another Chinese
imitation of a very (in)famous, tax-evading (oops, I meant tax avoiding, of
course!), American coffee chain. These seem to be two a penny here and are very
fashionable at the moment in China. This one is called 85 Top Coffee for some
strange reason and has a logo that would probably breach various copyright laws
in most countries around the world. Not in China though.
All is not as it seems here and one often finds oneself
doing a double-take as one realises that what one thought was, say, a Rolls Royce
or a Mini, is actually not. If one were so inclined, one could happily spend
twenty minutes or so trying to spot the differences between the Chinese version
and the European original, in similar fashion to that ubiquitous game that one
finds printed in the newspapers of the world. The list, at the end of the twenty minutes, even with the most careful of perusals, would not be very long...
Oddly, those highly respected protectors of company's and
people's rights, the Chinese Courts, rarely find in favour of the plaintiff
when a European company has the audacity to complain. One can only admire their
obviously much keener eye and the way it is able to perceive clear differences
that are far beyond the abilities of lay observers, such as myself, to
perceive.
In the case of the American company, owners of the famous
green, circular logo, it is perhaps a little difficult to feel too much
sympathy though. It seems from recent evidence that they do tend towards a
certain flexibility in the interpretation of the law themselves. Their beans,
for example, tend to be sourced from that well known home of coffee,
Switzerland (must be the climate...). Strangely, last time I was privileged to
visit the home of cuckoo clocks and highly creative bankers , I didn't
particularly notice the presence of large coffee plantations. Oh well, I guess
their economy must have moved on in the meantime and branched out into the
coffee trade...
For all that, I must say that these particular surroundings
are rather conducive to quite cogitation and writing and are therefore much to
my liking. The music in the background, easy listening jazz, makes an
altogether welcome change from the seemingly endless loop of Christmas songs
that I have been subjected to for the last few weeks. The seating is modern and
comfortable, the décor dark, the odd mature house plant growing against brown
walls. All-in-all, it has the feel of some of the more exclusive coffee houses
of Thailand or Indonesia.
85 Top Coffee itself is to be found near the main entrance
to a large shopping complex that has been given the modestly unassuming name of
'Star City' in Chang An. The ground floor is smart, modern and home to various
jewellers and mobile phone outlets. The first is occupied, at least mostly, by
clothing outlets. The second floor is...largely empty and unoccupied. The
fourth the same, except for a slightly run down gym that is currently offering
outrageous discounts to get increasingly reluctant customers in through the
doors.
This particular mall isn't alone in this. Often the
presentation is of a thriving economy but the reality is a little different.
The first faint whiff of recession is in the air, although carefully hidden
away, particularly from Western eyes. Even on the apparently bustling high
streets one sees, every now and again, vacant shops with dusty and naked
mannequins strewn across the floor, amidst the discarded hangers and the piles
of leaflets posted through the door, the premises having clearly been empty for
quite some time.
When I was here last year, I was told that it would be a
great idea to invest in Chinese property. The old adage: “You can't go wrong
investing in bricks and mortar” was heard incessantly amongst the group of
people I staying with. I wondered to myself at the time how often I had heard
this particular refrain. It brought back memories of the property boom in
Ireland in the early part of this century, people queueing around the block
just to get their names down and the chance of buying a property before the
price rose yet again. How different it looked a year later, the cranes
motionless, building sites abandoned mid-build, flats that could scarcely be
given away. With these memories in mind, I decided to resist the temptation to
invest.
This year in China, prices are down. It
is not the same across the board, some areas doing notably better than others
but... dark rumours abound of the inability of property developers to pay back
enormous loans, often secured on the shadow banking sector, and of town halls
in debt up to their eyeballs having financed local government projects via less
than conventional means and shady deals with builders. Up to the time of
writing, there have only been one or two collapses (I mean this in the
financial sense – though if one sees the quality of some of the building it is
a small wonder that it doesn't happen more often in the physical!). One has
the feeling of a pack of cards that has grown far, far too high and is
teetering of the very edge of disaster.
Still, one of the advantages of the Chinese system is that
the powers-that-be can manage news, and financial intervention, in such a way
as to avoid, for a time at least, much of the panic that ensues in the West
when it becomes obvious that the market is about to collapse. There have been
bail-outs and pay-offs but the news scarcely reaches the headlines. There are
rumours of whole cities, built at enormous cost, with scarcely any occupants
(the so called 'ghost towns') and developers subsequently caught up in
mountains of unpayable debt.
If one were to believe the figures, the Chinese economy is
still doing very well and growing at rates that we can only dream of in the
West. For 2014 the figure is likely to be reported as just over 7% but... these
figures are more likely to mislead rather than to inform. As Leonard H. Courtney
said (often mis-accredited to Benjamin Disraeli), 'there are lies, damn lies
and statistics'. The management of data and the form it is released in is a
dark art that has reached new heights in the People's Republic of China.
Over the years, one cannot help but notice that people who
wish to invest in stock markets, housing, or whatever have a strange ability to
manage their own perceptions. They tend to see only that which they wish to
see. An ability to tell themselves that somehow this market is different to all
previous markets, that this is not a bubble but a new paradigm, that the old
rules don't apply any more and this market will go on growing forever. Of
course, it never does. The same old rules do apply and when a market grows much
faster than the ability of the purchasers to keep up it will, inevitably,
decline. If it is a bubble, it will, inevitably, burst. Strange how this always
seems to come as a surprise to many despite it being re-iterated time and again
in the past.
Back in the café, life goes on as pleasantly as ever. These
last few decades have been good times for China and the standard of living here
has increased to an extent that parallels, in many cases, that of America and
parts of Europe. People gamble (technically illegal in China – but no one ever
seems that bothered), smoke (technically illegal – but no one seems that
bothered),chat and pass the time of day with a goodly degree of bonhomie. It is
an entirely comfortable and reassuring scene. I have my fears and forebodings
but for now I simply wish, for their sake, long may it continue.
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