Losing my religion...

This week I find myself enjoying the cooling pleasures of an air-conditioned café a few metres south of Victory Square in the centre of Bangkok. The temperatures rising (it isn’t surprising…) but, having learnt over the last few years the benefits of pacing oneself, I find myself feeling cool in both the physical and affective senses of the word. I have been on the road a month now, but it feels like I have barely begun. Another six months of this peculiarly peripatetic lifestyle would surely not go amiss. Sadly, after a brief sojourn to Southern China, I am due back in Blighty in a mere ten days. 
 
This particular café is much to my tastes, if not so much for its décor at least musically. I have been here ten minutes and enjoyed a nostalgic trip down memory lane to the strains of Simon and Garfunkel, Don McLean and Don Williams. Not the coolest choice of backing tracks perhaps, but much preferable to the short loop boredom of overly loud and intrusive music one usually has to suffer in Thailand and China. 
 
The first fortnight of this particular sojourn was spent in Kanchanaburi being, on one level at least, incredibly lazy. The furthest I traveled in that time was down to the local football stadium and back to watch a lethargic match between the langurous and laissez-faire practitioners representing Kanchanaburi and their downright soporific and slumbersome opponents. On another level though, it was also a time of fairly intense activity. More or less every day a considerable amount of time was spent reading, writing and generally studying economics and value investment techniques. As it seems that an increasing amount of my (reasonably) passive income comes from that source these days, it both makes sense to understand the subject in some depth and, idiosyncratically perhaps, I actually derive a degree of pleasure from researching such arcane and apparently complex subjects. 
 
Part of the process involved the investigation of certain ideas and concepts on the web. Much as the internet itself is an ever useful cornucopia of information and yet, for me at least, it also holds two dangers. The first, and one that I have been prey too far too much in the past, is the dreaded and dreadful ‘click-bait’ that one finds embedded in so many news sites. A scary thought for me would be the comprehension, if one were able to quantify such things, of just how much of one’s life has been wasted chasing one’s tail because of the temptations of these ubiquitous snippets of ‘news’. Tis designed that way of course, and annoyingly effective it is too. Being aware of the problem does help though, and I feel I have managed to remain far more focused during this trip than has been the case heretofore. 
 
The second danger is that of the obfuscation of reality due to the tendency of people to forcefully express their opinions through the internet no matter how unsupported by fact, how nebulous or how credulous they are. This is as much the case in finance as it is in politics or religion. It seems that whatever one searches for one will inevitably find support for one’s own biases or, alternatively, someone who has a diametrically opposed view and wishes to express it forcibly. Tis a wonder to me how some people are able to extract completely opposite lessons from the self-same events. Oh well, nowt so queer as folk as the old adage has it.

I recently became aware of the Israeli ‘historian’ Yuval Noah Harari and even attempted to read some of his contributions online. Scarcely, if ever, have I come across such a hugely opinionated and tendentious commentator who seemed happily capable of making utterly presumptuous and preposterous statements and then, fearlessly adding insult to injury, extrapolating exponentially on those ideas (perhaps ‘biases’ would be a more appropriate word here…) to the point where the conclusions reached were but a distant and far-removed cousin of any reality I am aware of. To his credit though he did advance one very interesting and thought provoking notion; the idea that much of human advancement has been due to the actions of people inspired by a given concept, be that concept religious, political or philosophical – to some extent no matter how ill-founded the actual concepts were/are.

Great things have throughout history been achieved by those smitten by such beliefs, even when the most cursory examination of said beliefs demonstrates them to be at best nebulous or, at worse, downright nonsense. In the case of religion one can think of Judaism, essentially a collection of tribal myths of a wondering semitic desert tribe with unpleasantly racist overtones, or Christianity, effectively a serendipitous historic accident that grew, often for political reasons, out of all relationship to its original significance, or onto Islam, surely few religions have done more damage to the very people who espouse to follow it than this particularly illogical set of unpleasant prejudices? With politics one need look no further than the extremes of either the right or the left, the republicans, the royalists, the socialists, the communists or the fascists. All these ideas, deeply flawed as each and every one of them are, have inspired great men and women in their time and led to significant changes and, sometimes, even to progress. Unfortunately, the reverse is also true: many inspired by these self-same beliefs have committed and continue to commit the most heinous and inhuman acts and have felt quite justified by their ‘beliefs’ whilst doing so.

Such considerations are huge and certainly beyond the far more modest aspirations of this little blog. Suffice it to say that the internet, much like human society itself, is peopled by those who passionately express more or less every possible viewpoint … often to the point of absurdity. For this flanneur the realisation that much of this verbiage is far better disdained save for the occasional indulgence for amusements sake, tends to save an awful lot of time. Although once of more idealistic mien myself, in my callow and long-lost youth, a healthy and pointed pragmatism is all I tend to aspire to these days.

Time has moved on and time for me to move on too. It has been a very pleasant couple of hours spent meditating on these mentations in this cool and pleasant café. The Americano was good, the music pleasant, the musings interesting (to me, at least!). What more could a wandering and wondering flanneur wish for?

The Dream of Socialism....?

“The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.”
Winston S. Churchill

Having spent the last two weeks in Dongguan, the need to escape the constant and very wearying airborne pollution has led me into taking a trip 70 miles South to the former British colony of Hong Kong. As I sit here in the Hebe Haven Yacht Club comfortably pondering the direction of this particular post, I find gazing thoughtfully across a quiet and pleasant harbour in one of the quieter recesses of the New Territories. This place does indeed have a very British feel to it, as one looks around it becomes immediately apparent that the majority of the guests are ex-pats though, given their ages, one would guess the majority have only come to Hong Kong in the last few years. The place feels quite swanky and the clientèle well-heeled, even if many of them seem to be wearing yachting plimsolls at the moment.
Although times are challenging generally, my impression of Hong Kong is one of long term success. Indeed, it seems that the economy here has been happily growing for at least the last fifty years or so. Way back in the early sixties, the former Crown colony was fortunate enough to have been the used as something of a petri dish for an economic experiment. It was largely overseen by one John James Cowperthwaite, a British civil servant who was given the role of Financial Director for Hong Kong in 1961. He remained in this position for the next decade during which time the colony went from being something of economic basket case to a thriving, successful and wealthy enclave within which opportunity and entrepreneurship thrived.
One may wonder exactly what it was that Cowperthwaite did in order to instigate such a miracle? Strangely, the answer to that question is better given by highlighting what he chose not to do than by illustrating any changes that he instigated. Cowperthwaite believed that for economy to succeed the most beneficial thing that a given governing authority could do was simply get out of the way. He was convinced that a positive attitude of non-intervention was the best thing a government could do to further economic growth. Famously, he even went so far as to instruct his civil servants not to collect statistics for fear that such an operation would lead to them being tempted to interfere. Essentially, this was laissez-faire capitalism at its most blatant. The subsequent success is hard to argue with.

In this view, the essential job of governance is to defend a country if necessary, ensure that basic law and order is upheld (the prevention of force being used by one citizen or group of citizens on another) and, apart from such fundamentals, interfere with the economic life of the society as little as possible.
It is interesting to compare the results with another location that was going through similarly drastic changes at the time, which also had a huge and unfriendly neighbour on its doorstep, but chose the polar opposite system to laissez-faire capitalism. Cuba, after the revolution of 1959, adopted socialism, centralism and government controlled economic policies. Today, it is clear that the experiment has not gone well. The country went from being being successful, if somewhat corrupt, economy to the current complete disaster whereby the very fabric of the infrastructure is in constant danger of complete collapse.

Personally, to admit that state interference in economics doesn’t work comes hard to me. From the time I became interested in politics as a very callow youth (my callowness was legendary) I had, up until recent times, always favoured left-wing views, sometimes despite the evidence of my own experiences. It has taken a long, long time for me to realise that my idealism is not supported by the facts.
Many, many moons ago, on one of my earliest adventures, I had visited the former Soviet Union. This was a couple of years before its eventual collapse but it was all too obvious even then that the basic standard of living was far, far below that which we were enjoying in the West. The people of the USSR also suffered constant strictures and controls as ‘the Party’ succumbed, as is so often does in socialist or communist states, to the paranoid temptation to meddle and interfere with every aspect of people’s existence.
Despite this experience, over the years my idealistic sympathies continued to be socialist but, as I looked around one’s own society and others that I experienced on various sojourns, it was becoming clearer and clearer that socialism was often the cause of economic woes rather than the cure.
Perhaps in recent times the most obvious example of this is that of Venuzuela, an oil and mineral rich country blessed with superbly arable farmlands to boot. It seemed to be an almost ideal country for a long term socialist experiment. Amidst much flag waving and sloganising, the government of Hugo Chavez was held up by the left of an exemplar of what such policies could achieve. Unfortunately, as has invariably happened time and time again, the inevitable control-freakery, the corruption, the de-motivation of the work force, and all the other evils of socialism set in. Currently Venezuela is on the edge of anarchy with daily food shortages and disintegration of even the basic structure of the society.

One fears that the lesson will be short-lived and much the same thing will happen again. As ever, it will be launched in a flurry of flag waving, drum banging and worthy idealism, but end in societal and economic collapse, despotism and violence. At some stage the realisation has to set in: socialism simply does not work.
Such lessons as Hong Kong were not lost on a certain Deng Xiao Ping, effectively the Chinese leader following the demise of Mao Tse-Tung in 1976. Deng had witnessed first hand the previous three decades of stagnation, starvation and idealistic but useless posturing and the damage it had done to China under Mao. He gazed across the border to the miracle of Hong Kong, drew the obvious conclusions, and decided to create the very first special economic zone in Shenzhen, Guangdong Province in 1979. The experiment was so successful that it was rolled out across the rest of China over the next two decades and led to the freeing of countless millions of people from the grinding poverty that they had experienced previously under communism. Of course, being nominally the “Communist” Party of China, the leaders couldn’t admit the reality, so to this day we hear the endless verbiage about this experiment being a step on the road to a socialist utopia but… beyond the tiresome rhetoric, the current crop of leaders understand the underlying reality.

Back in the Hebe Haven Yacht Club, the waitress brings a fresh cup of Americano to finish off what has been a very pleasant lunch. The view is wonderful, tiny boats bobbing about the harbour with islands dotting the bay beyond, the surrounding comfortable and the spot ideal to reflect on such matters. Perhaps, as we started this week’s effort with a quote from a very influential 20^th century British politician, it would be fitting to let him have the last word too (although this particular pearl of wisdom may be apocryphal, there are many versions on the internet):
“If a man is not a socialist by the time he is 20, he has no heart. If he is not a capitalist by the time he is 40, he has no brain.”

The First Green Shoots…

If you do not change direction, you may end up where you are heading.
Lao Tzu

This week, the first week of the New Year, I find myself enjoying the pleasantly clean atmosphere of the Milo Cafe. In the last week, I have popped into the Hey!!! Cyber once or twice, but such was the stink from the ever-present smokers that I have, apart from those occasions, kept to the notion of paying a little extra for some half-decent air. As far as I can tell, the smoking ban has had hardly any effect whatsoever and I have seen not a single iteration of the stricture being enforced in Dongguan. Such is China and attitudes to law here, very much a pick and choose situation, both from the point of view of the citizens and from the enforcement agencies themselves.
Having said that, the voluntary move to such swanky places as the Milo has proven pleasant. It is an oddly dark place with multiple small rooms and cubicles giving it an almost baroque ambience. The seats are deep and sumptuous, each supplied with at least one extra cushion, books line the walls and the choice of background is piano sonatas by the likes of Chopin, Bach and Mozart. All in all, a far more conducive atmosphere to settle down, ruminate and attempt to stew happily in some creative juices.
The Milo itself is one of the multiple cafés to be found on the edge of the local square. Already a pleasantly green space, it was previously just mostly an open meadow. In the last year or so though, the local government have been busily planting more and more trees. At this rate, by the time I next return it will be a veritable jungle. This is an aspect of modern China that should be both recognised and applauded. During Mao’s time the government basically completely wrecked the environment. In particular, during the ill-fated ‘Great Leap Forward’ (1958-63) the government’s policy not only led to the needless deaths of millions, mostly by starvation, but to a complete decimation of forests across the land as trees were ripped up to sacrifice as fuel for the furnaces in a doomed, and rather ludicrously laughable, attempt to produce steel for construction sites. The steel thus produced was of such low quality as to be as good as useless. By the time they realised their error ,the damage to the environment and people’s assets (pots, pans, tools and utensils, basically anything metal was being smelted) was enormous.

Similarly disastrous attitudes to the environment prevailed during much of the subsequent 50 years. Much of the economic advantage that China gained in the latter part of that period was very much at the expense of massive environmental damage. From Mao, through Deng Xiao Ping and all the way up to and including Jiang Zemin, the reckless damage to China’s Eco-system was very, very low on the list of priorities. China as a country still suffers much from the catastrophes inflicted on it during those years. The rivers are still very suspect, the air filthy, industrial practices still very dubious but, after so much wanton vandalism and reckless wrecking of the environment, it has to be admitted that since Xi Jinping came to power there has been a fundamental change in attitudes.

Part of that sea change has been an attempt to plant huge numbers of trees and to reforest large areas of China. The aim is to attempt to undo at least some of the damage of the past and to end up with more than 20% of the country covered by forest. This is a noble ambition indeed, and one that looks to be on the point of success. Each year here there is a national tree planting day when thousands upon thousands of trees are planted by politicians, dignitaries, celebrities and even school children.

Another very positive development has been the encouraging of the development of electric vehicles and a government willing not only to subsidise the industry but also help the consumers make the transition. This is in complete contrast to the UK where the zeitgeist seems to have taken a completely opposite turn with the government there reducing their role both in industry and as far as subsidising the consumer is concerned. This seems, given the now parlous state of the air, particularly in London, to be about as short sighted a policy as one could imagine. A good day in a Chinese city is still far worse than a bad day in London but… the Chinese are addressing the problem with their usual energy and, bit by bit, the pollution levels are coming down. Unfortunately, at the time of writing, the total opposite pertains in the UK.
One company that has made great strides in this area is BYD (Build Your Dreams). Originally a maker of batteries for mobile phones, they have branched out into auto manufacture and become World leaders, alongside the American company Tesla, in the production of electric vehicles. Tesla’s vehicles, it must be admitted, have far more cache but are also incredibly expensive. The range, perhaps the most critical problem remaining for electric vehicles, on the BYDs is now almost as good as Tesla’s but their models cost a fraction of the price. Given their access to the Chinese market, perhaps the biggest in the World for electric vehicles, it certainly is a company to look out for in the future. The famous financial wizard, the almost legendary sage of Omaha, Warren Buffett, seems to think so. He has literally invested billions into this company over the last few years. Given Mr. Buffett’s incredible track record in investment over the last five decades, far be it from me to argue that this is not a very wise move indeed.

There has also been quite astounding work done in the North of the country. Nicknamed “the Great Green Wall”, the Chinese have planted a huge ecological barrier that first halted, and then reversed, the encroachment of the Gobi desert. The man-made arboreal barrier now covers more than 500,000 square kilometres. The government looks forward to a time when the forest will stretch nearly 5,000 kilometres from Xinjiang province in the West to Heilongjiang province in the East. The sheer scale of such a project is impressive indeed. In these pages I have oft criticised those in charge in Beijing, but on this particularly occasion I happily doff my cap to them and utter a sincere ‘well done!’.

Back in the Milo I ponder the implications of these matters to what now sounds like Bach. China’s cities at this moment in time are not the most pleasant places to be. This week in Dongguan there has been hardly a breath of air and with temperatures in the mid to high twenties the steady build up of air pollution has been noticeable but...over the years I have come to this part of the world the improvement is quite clear. If the reforestation goes on at its current pace and the Chinese government are successful in converting the drivers here over to the joys of electric transportation, the future could be bright indeed.

Coughing up…

Expert, texpert, choking smokers, don’t you think the joker laughs at you?
John Lennon

Today, the last day of 2016, I find myself in the rather delightful environs of Frigg Cake, a somewhat upmarket establishment located in the ‘Coffee Village’ of Dongguan, an area just off the main square that seems to consist of twenty or so coffee shops and suchlike. I had a rather pleasant stroll over here this morning meeting, en route, my favourite security guard. Last year, his English lexicon consisted of the words ‘I love you!’ which he would say every time I passed his booth. In the last nine months or so, he has enlarged his vocabulary by some 25% to include the word ‘f***’. These days, instead of greeting me with the overwhelmingly positive ‘I love you’ all I get is ‘f*** you’, to which I normally respond ‘f*** you too’ followed by a high five. Such a pleasant start to a new day…
Pondering the name of this particular establishment, one hopes that the first word is meant in the sense of a noun, although it must be admitted that ‘Frigg’ is not a particularly common name in this part of China. At base though, I feel that all is fine and dandy as long as it is not meant to be used as a verb as the image thus conjured is perhaps just a little too disturbing to contemplate.
The music this time seems to consist of the very pleasant tones of Katie Melua and some gorgeously nostalgic Ink Spots numbers, both of which are far more welcome to my delicate ears than the usual raucous racket they tend to play in such establishments as this in China. The main reason for choosing Frigg Cake as my haunt for today is the strict ban imposed on smoking in these premises. After suffering much in my usual watering holes of Hey!!! Cyber and Cochan, I decided enough was enough and to cease frequenting such pungent environments in favour of far more salubrious environments such as this.

The last few days have been a tad colder in South China and this has led to crowds of people turning up in the Cochan almost every member of which seemed to want to light up a cigarette. Now, personally, I have no problem if people wish to pay out their hard-earned lucre on ridiculously expensive packets of small, white, toxic sticks which they then intend to set light to in order to inhale noxious fumes from, thus imbibing a range of carcinogenic chemicals into their lungs causing all manner of damage... that is their prerogative. Far be in from me to interfere with other’s choices in such matters. The problem comes when this nihilistic and self-destructive indulgence is imposed on others, particularly on my not-so-good self.
Yesterday, I did endeavour to avoid the worst of the smoke by pulling up the neck of my fleece jacket to cover my mouth and nose. This had merely a negligible effect so I then switched on a nearby free-standing fan and directed its blast in the general direction of the smoking hordes, all to little avail though. The task was as hopeless as King Canute’s doomed attempt to turn back the North Sea, the plumes of exhaled cigarette smoke continued to waft in my general direction from the mouths and the cigarette tips of a multitude of impassively impervious smokers.

Unfortunately, Such situations are oft experienced in the Middle Kingdom, but there is some hope on the horizon. According to several news sources, the Chinese government are set to impose a nationwide ban on smoking in ‘public places’ and refreshment establishments from the 1^st January 2017. Given the imminence of this deadline and the complete, profound and utter indifference of the smokers here, one would imagine something, as the saying goes, has to give.
Up to now, even though well aware of the damage being done, the Chinese government have been very reluctant to address this problem. Some cynics say that this is because smoking is such a huge source of revenue for said government, the smokers coughing up huge sums each year, that any desire to stub it out has been overwhelmed by the greater desire to continue to tax the 350 million or so smokers in this country. The temptation for the government not to act is actually twofold here, as they not only take the taxes but, amazingly, they also produce the cigarettes in the first place. China has a state owned tobacco monopoly known as the STMA. Since it was founded in 1982, everything involving tobacco including production, marketing, imports and exports has fallen under the jurisdiction of this monopoly.

China loses something in excess of one million people each year to smoking. It seems to this flaneur to be something of a strange situation when a people’s government has been so actively involved in making a huge profit out of the deteriorating health, and even the deaths, of its own population. The good news now though is that it now seems that they have finally turned over a new leaf. After many ifs and butts, and many attempts to endlessly drag out the process, the government have finally decided to attempt to extinguish the habit, at least to some extent.
One cannot help but wonder though, given the ubiquity of smoking here, and the quite blatant insensitivity of the smokers, just how effective this ban will be. Personally, I wouldn’t hold my breath… Like so much legislation here, it is one thing to pass the law, quite another for that law to be enforced. I have been in many a café now where signs are displayed quite prominently but are completely ignored by the recalcitrant smokers. In a police station recently I was pleased to see a large and very clear ‘no smoking’ sign above the counter. I was not quite so pleased to see however, immediately below said sign, a policeman puffing away without the slightest concern, apparently completely impervious to the theoretical strictures placed upon him.

China has many, many laws, those responsible for creating such things being quite active in their zeal to reshape society but, in practice, much of this legislation is just ignored by the general population. A few minutes in a taxi will very quickly demonstrate the completely laissez-faire attitude to the rule of law here. On the roads, the rules and guidelines are ignored to such an extent that one wonders why they bother at all. Seeing bikes, cars and even lorries coming the wrong way down a dual carriageway is not unusual here, if the driver of said vehicle feels he can take a short cut by acting in such a way then he will. The legal implications will not have even crossed his mind.
Given such an attitude, I am generally pessimistic about the effects of the smoking ban but...the next week will tell. I will happily apologise for my pessimism if I prove to be incorrect, but I fear no apology will be necessary.
Back in the Frigg Cake I continue to enjoy the lack of tobacco smoke and the generally pleasant atmosphere, even if the music has now gone over to a slightly more cacophonous jazz, it is still not as intrusive as the more commonly suffered rock. It is, admittedly, a tad more expensive here, but given a choice between paying a few more yuan for a coffee and having to imbibe second-hand smoke for two hours whilst I create one of these efforts, I think I will increasingly select the former.

Life's a beach.......

Today’s slightly pre-Christmas blog comes from what would be a delightful Coconut Grove Hotel located on the Hainanese coastline just East of Wenchang. I say ‘would be’ as, at the time of writing, the immediate environs seem to be suffering from the effects of some local stubble burning and there is a somewhat pungent smell about the place. My room looks out directly onto the South China Sea, but the potentially pleasant view is diminished to some extent by the aforementioned haze to the extent that one can barely see the island 600 metres away, let alone the horizon. At the moment, I am not sure if this is a temporary phenomena or more a permanent state of affairs. Seeking further information from the reception staff yielded little or no insight, just the usual emotionless expressions and disinterested shrugs.

This is something of a shame as most everything else about this location is really very pleasant indeed. The hotel is well named ‘The Coconut Grove’ as it is located within a veritable forest of coconut trees. The whole area is a fecund mass of verdant and copious growth, so much so that the experience of walking though it is somewhat akin to enjoying the tropical plant section in Kew gardens or a few hours in the Eden Project but on a much, much larger scale. I must have walked five or six kilometres this afternoon and, apart from the odd basic dwelling, the inland side seemed to consist of an almost infinite variety of flora and fauna with quite literally more coconuts and mangoes than you could shake a stick at.

Butterflies would flutter by, some tiny little things with delicate, pale yellow wings, others were about half the size of my hand with pitch black, velvety wings adorned with large red spots like bloodshot eyes. I inadvertently walked through a couple of thick spider’s webs, a worrying experience given the size of some of the insects on this island. One’s imagination took flight at the thought of the monstrous arachnids that may have been lurking in the shadowy undergrowth nearby, just awaiting their chance to pounce on unsuspecting passers-by like myself.
At one stage I did actually partake of one of the coconuts which were being offered by a roadside peddler. She seemed to be a somewhat passionate woman, much given to haggling very aggressively with her customers. In my particular case the first price I suggested to her, six yuan (slightly less than $1), seemed to be acceptable and she immediately, and rather skillfully, sliced up the coconut. I found myself partaking of the delicious juice within barely thirty seconds of ordering it. In the meantime, the woman herself carried on arguing with the rest of her clientèle. For my part, if there is one lesson I have learnt in life that I could and would pass on to my readers it is that one should rarely argue with an angry woman, but particularly avoid said pastime if the female in question happens to be in possession of a machete and knows how to use it…

After a couple of kilometres I turned down another path that led back down towards the beach. The jungle was very thick at this point and the path only a couple of feet wide, but I was drawn on by the increasing volume of the sound of the waves of the South China Sea lapping up against the spartan seashore.
The beach itself was an odd mixture of the most pristine sand and huge amounts of carelessly discarded debris of all sorts. This particular strand would have appeared to be something of a tropical paradise if it wasn’t for the sheer amount of flotsam and jetsam either washed ashore or simply thrown away by the locals. There is a peculiarity in Chinese culture that I have noted on many an occasion whilst here: the care and respect that they treat their own environs with contrasts completely with the absolute disregard for shared surroundings. It is curious how commonly one sees this environmentally disastrous attitude expressed throughout the land. Rubbish and detritus matter not if they are deposited somewhere, anywhere, outside of one’s own house or car it would seem. I blame Confucius myself, and all that ‘filial piety’ nonsense he was so fond of espousing.

The sheer scale of the debris was interesting in and of itself. All manner of discards from used mattresses to farm implements, fishnets (of the angling variety rather than female hosiery...) to plastic containers, curious industrial metal hangers to worn out tyres, a vast cornucopia of chaotic chattel cast aside with nary a thought as to any consequences.

Dotted about the beach were also numerous holes, some a mere half or even a quarter of an inch, others as wide as four or five inches. I guessed that these might be the domains of the crab population and only paused for a seated break on the beach in a spot that was relatively free of them. Even then, after only a few seconds, I noticed that a particularly curious crustacean was espying me via his beady eyes which extended a fraction of an inch or so above his head, having popped out of his humble abode to work out just what was going on in the neighbourhood. This was one of the bigger crabs, perhaps three or four inches across, with a brownish green body adorned with red spots across the front. I say ‘front’ somewhat warily, as the crabs themselves don’t seem to understand where their front is actually located. The multiple, smaller gray crabs walked much in the fashion so popular amongst the crab population and would lurch off very quickly to the side. If they were particularly alarmed, they seemed to have the ability to stand up on just one side and run at high speeds in this upright position. A strange and slightly disconcerting sight.

Gazing out upon the beach from my somewhat nervously maintained vantage point, the panoramic view reminded me of my boyhood and watching endless films of American Marines storming up the beaches of exotic tropical islands led by the ever-present and seemingly bullet-proof John Wayne. Japanese snipers would be waiting in the tops of the coconut trees for a chance to take a pot-shot at one of our American allies but would be felled with a dull and satisfying thud by the sharp-shooting skills of one of our trans-Atlantic heroes.

After all this excitement, I was more than ready for some satisfying sustenance. Hainan Island is famous for both its fish and its chicken. The first I rarely eat but will do so when not much else is available, the second I steer clear of completely. At the roadside though, and particularly in the vicinity of the restaurants, there were many small vegetable plots where the locals were taking advantage of the puberal and prolific nature of the soil. The restaurant I settled on actually asked me to simply pick whichever vegetables, mainly greens and salad, that I fancied. This was then prepared with garlic and herbs and offered up with a bowl of rice for around 15 yuan (about $2). It literally could not have been fresher, within seconds of being picked the leaves were sizzling away in the wok.

Existence here on Hainan is very, very pleasant, particularly in such small resorts as the one I am currently staying in. Occasionally I think of life in the UK at this time of year, of the crowded shopping malls filled with heaving, frantic and frenzied masses of frenetic present purchasers desperately trying to acquire something appropriate in the way of a gift to the mind numbingly and ubiquitously tedious accompaniment of John Lennon, Wizard, Madonna, Paul McCartney, Slade, Wham etc., etc., etc., or even, God forbid, sickly sweet and soporifically sonorous Christmas carols.

Yes, life is good here in far flung Hainan away from such tedious traditions. In the last ten years, I have managed to avoid spending all but two Christmas holidays in the UK. Each of those reminded me of why I dislike the whole unpleasant ‘festive’ season in the first place.
Long may these escapes continue!

A merry Xmas to all...

Irrational Exuberance…..

“But how do we know when irrational exuberance has unduly escalated asset values?”
Alan Greenspan

This week’s episode come from the small but delightful Green Tea Cake which, strictly speaking, isn’t really a café at all but more a bakery with the possibility of having a green tea thrown in if customers should so desire. They do a rather scrumptious red bean loaf here for a very reasonable 7 yuan. Probably not the healthiest thing in the World, but a very pleasant indulgence nevertheless. The wifi connection is relatively strong and, for the most part, it feels like a little haven of peace in the day to day madness of this manic metropolis.
Life in China is intense, perhaps a little too intense for some tastes. People’s attitudes are often very direct which does, I have to admit, take a bit of getting used to. In the city centres, they often seem to live in an almost constant state of agitation, an ongoing struggle to get ahead in whatever terms ‘getting ahead’ is meaningful to any particular person: getting in front of the car in front, getting over the zebra crossing first, getting to the front of the queue, any queue, by fair means or foul. It is quite routine here for the person behind in line to demand whatever they want even as the shop assistant is dealing with the person at the head of the queue. In almost any other country that I have visited over the years this would be considered ill-mannered at best, here it is so normal that the locals scarcely bat an eyelid.

This manic freneticism is perhaps nowhere more desperately expressed than in the Chinese Stock Markets. China has two main markets, the Shanghai Securities Exchange, which has been in existence some four decades now, and the much more recently founded Shenzhen Stock Exchange in Guangdong Province. Since being in China, I have kept a weathered eye on these two and have been somewhat amazed at just how drastic the daily gyrations are. Vertiginous price movements in a given share are nothing unusual in these markets. Such drastic movements in an upward direction are looked upon very positively by the authorities here. On the other hand, a ten per cent move downwards can lead to further selling being suspended for the day. It’s a free market, but with Chinese characteristics...
Originally, I had been tempted to examine the possibilities of investing here but, after a few weeks of investigating just how the system ‘works’, I have come to realize that any semblance of a relationship between the price of a given share and the underlying reality of the business in question is purely coincidental.

Many moons ago, in the dot com boom at the turn of the century, I found myself caught up in much of the ‘irrational exuberance’ referred to by Alan Greenspan. Fortunately, by nature, I tend to have a very strong sense of caution and often display more than average skepticism when it comes to such mass indulgences. I remember being criticized at the time by a friend who explained to me that I ‘failed to understand the new paradigm’. What he meant was that the old rules relating to valuations of companies no longer applied. Caught up in the spirit of the times, so many people actually believed this to be the case. Personally, I did indulge a couple of times, but was fortunate to have been taught the value of stops (prices at which you automatically sell if a position is going against you) by another friend who shared my skepticism. This allowed me to walk away with a very decent profit. Others were not so fortunate and found it hard to let go when the bubble finally burst.

Much the same sort of situation, at least as far as the psychology goes, applies to the Chinese markets of today. I examined multiple shares, looking at their earnings, or more often the lack of them, their PE ratios (price/earnings), their debt, their growth and the actual nature of the industry or business they were involved in. A normal PE would be in the region of 10 to 20, much above that and the price begins to look a little frothy. British shares tend to the lower end, American towards the higher, but the range isn’t huge, at least not when compared with China.
What I found is that some of the ratios in China would be in the 30’as or 40’s, with some reaching into the several hundreds. I looked into the nature of the underlying securities to try to understand how such prices could be justified and found... car manufacturers, travel agents and electric plug makers. Such companies as these may grow, but the possibility of them justifying such huge PE ratios is more or less zero.
One of the problems for China is that the average investor here tends to have little experience and even less knowledge. The market is commonly viewed as simply another form of gambling, an activity much beloved in China (even if technically illegal), rather than a means to invest in a business. In Europe, the UK and the US, the biggest influences on prices are the major institutions and hedge funds, professional investors all. In China, it is Joe Bloggs on the street.
To put it simply, the market reflects a tidal wave of irrational speculators but very, very few informed investors.
In light of these investigations, any temptation to find a means of investing in such madness quickly disappeared. This bubble is so huge that when it bursts, as indeed it must, the sound of the explosion is going to reverberate around the globe.
Back in the Green Tea Cake, I find myself struggling to resist the temptation of some of the gorgeous dangao (cakes) on offer. China has grown much in recent years and there is a general sense of prosperity about this part of the World. Beneath the surface though, the threat of the investment bubble, the real estate bubble and, perhaps the biggest of all, the credit bubble that supports the whole house of cards lies simmering away in the background (Just how many metaphors can a lazy flaneur mix in one sentence?...). With these things one never knows just when lightning will strike, but strike it will. Given the vast amounts of capital involved in each of these situations, this is likely to be bigger than the dot com catastrophe or even the 2008 financial crisis. At times, tis a scary old World…

Down the aisle...or down the garden path?

“Have you ever wondered why so many items of women’s clothing don’t have pockets?” Esther Vilar

This week, I find myself in the rather dark , albeit friendly and relaxed environs of Cochan Coffee in the bustling business district of South Dongguan. These Chinese cafés seem to work to a recipe that demands the ubiquitous presence of music continuously blaring away in the background. Some, like C café, have a tape that consists of about three songs only and loops from dawn to dusk and beyond. Others, like Hey!!! Cyber, feel that Western Rock is an appropriate background to the enjoyment of a cup of coffee. They are sadly mistaken, of course, but that same recipe is repeated day in and day out. This particular café specialises in somewhat softer Western Pop and seems to actually change the music on a daily basis. Such practices come as something of a relief. Listening to tapes looping again and again has something akin to the effects of the infamous Chinese water torture on me and brings on an almost irresistible temptation to place a booted, size 14 foot, through the offending apparatus.
The Chinese, or at least it seems to me, are dominated by custom and practice, even when that custom and practice are no longer applicable or, worse yet, were not a good idea in the first place. All societies have expectations of their constituents, ways of being and acting that seem fitting and appropriate within that society. In China, perhaps, those expectations are nowhere more prevalent than in the area of marriage and reproduction. Every person within the society carries the weight of expectation that at some stage, the earlier the better, they will pair off and create multiple replicas of themselves. Not that China is lacking in such replicas, currently they have some 1.38 billion of them and going up. One area that China is definitely not to be found wanting in is people…

The weight of these expectations in China has been keenly felt since the age of Confucius and his emphasis on filial piety. The ‘rightness’ of getting married and having children is scarcely ever questioned within this society, even though the country suffers from severe problems of massive overpopulation. At some stage, usually without much personal consideration at all, the average Chinese will feel it is almost a duty to fulfill his/her society’s expectations and thus lock their lives into a certain, pre-determined course for decades to come.
One of the relatively good things about China though though, is the relative simplicity of the marriage contract. People are general married via a secular ceremony carried out by a local official. Chinese females, being female, often insist in many of the trappings of Western style weddings: white dresses, bridesmaids and all the rest of the paraphernalia associated with celebrating the capture of a husband. Despite all this, if the marriage fails (which they are increasingly likely to do in China, just like almost everywhere else), it is relatively easy for the couple to divorce. If both parties are agreed, this can be done in a weekend. Even if they disagree, the process is still much simpler than that which is ‘normal’ in the West.
If the husband had a property before the marriage, there is no question of it being shared with the wife after a divorce, especially if she has made no contribution to the acquisition of that property. The split is relatively equitable. Children are provided for, if necessary, but beyond that there is no onerous obligation on the part of the husband to sacrifice his financial well-being to his now ex-wife.
Perhaps this is an area where we in the West could learn from the Chinese and the way that marriage and divorce are handled here, at least in the legal sense. Given the lack of even-handedness in divorce law in the West, there is clearly a need for some re-adjustment before men start to give up on the idea of marriage altogether. Indeed, exactly this is happening in America at the moment. In previous decades, 70% of those of marriageable age would, indeed, be married. That figure is now barely 50% and going down fast. The main reason for this is appears to be that men are now perceiving marriage as a ‘bad deal’. One wonders what took them so long?
Given current legislation in most Western countries, almost all the risk of marriage is taken on by the male, almost all the reward given to the female. This becomes even more so if the couple divorce. Whether or not she has contributed to financing the property the couple live in, the wife will tend to end up benefiting if they separate. Unlike in China, no consideration is given to the simple fact that she has not contributed and she is deemed, simply because of the fact of living there, to be entitled to at least a share of the said premises, sometimes the whole kith and caboodle. This same situation often applies to the husband’s wealth, even when the wife has made no contribution whatsoever, she can still expect a ‘nice little earner’ from the settlement.

The blatant inequality of the law in such situations has led to the creation of a new career path for females in the US, although admittedly similar situations have occurred in many cultures over the centuries. The phenomena is known as a variation of ‘hypergamy’ and consists of a process of ‘marrying up’ through a range of husbands, gradually moving up in social class, and gaining greatly from the settlement each time the female divorces yet another man who has become surplus to requirements. If there have been children from the previous marriages, so much the better for her. The courts will have awarded her generous settlements which, essentially, will allow her to live out her days without the need to actually work ever again. The same, of course, cannot be said for the ex-husbands. They often find themselves working all the hours for the next few decades in order to pay maintenance to their former wife to keep her and her new lover/husband in some degree of comfort. Failure to do so, at least in the US, can lead to incarceration.

Given such a situation, is it any wonder that more and more men are rejecting marriage altogether? Even a ‘successful marriage’ will entail restraining their options in almost every area in life simply for the reward of providing a female with house, home, financial support and replicants. As Pete Duel asked, somewhat incredulously, in the role of Hannibal Heyes, ‘That’s a good deal?’
Back in the Cochan the musical accompaniment has changed to a relatively pleasant, and markedly less intrusive, classical composition. The early morning crowd of stressed and smoking men has disappeared into their offices and the clientèle now largely consists of middle-aged housewives, perhaps the partners of those very men who previously occupied the place, contentedly passing the time of day with their friends. Tis a hard life for some...