inside thoughts on China and beyond

Inflated Inflation

“Same as every week please: two milk, a dozen eggs  and a pound of sugar.”

Hao, here you are.”

Xiexie, oh, can I also have a cabbage. I still need to eat diner.”

“Sure, anything else?”

“No, that was it.”

“That’ll be 35.6 kuai.”

“What?? Last week it was 21 kuai….”

“Ah, yes, but that was last week…. This is today! Inflation, I’m sure you know…”

Of course you know. Everyone knows. The threat of untamed inflation is the talk of the day, as it has been for the last 14 days. Guess what the talk will be tomorrow… The first signs of the storm to come, little clouds on the horizon, ignored by most, felt by some and enjoyed by the happy few. Little as it may be, it is affecting more and more. You leave the shop not sure what to think of it. Cheated?

Increasing demand that comes with the growth of this world’s fastest growing economy -where till recently only the sky was the limit, but now that more and more of its 87 billionaires are stretching the boundaries of law by illegally flying their Lear jets, it is the land of limitless opportunities- is causing empty storehouses. Natural disasters have hit hard this year. All this have lead to shortages, resulting in an average food price hike by more than 10% over the last 2 months. The price of the most important vegetables rose 62% in 1 year and our sugar has doubled (and because my wife refuses to spend more, I’m on a decimating sugar diet). To keep the peace, Beijing needs to provide food-support for 81 million people this winter. Think of it as more than 4x the population of The Netherlands or every soul of California, Texas and Florida together in welfare. Somehow Hu needs to cough it up, this increase need by 25% compared with the average of the last 20 years.

And if that is not enough, major cities like Chengdu now need double quantities gas compared to 2004. Up to only a few years ago, Chinese would live in their homes during the cold winter months with 5 layers of shirts, sweaters and jackets wrapped around their body while keeping all windows open: to let in the outside warm air. Not without pride, the office ladies down the hall would assure me that this is healthy and I had no choice but to suffer this self-torturing lifestyle during our long winter office hours. Now, this has changed. First thing they do when entering their office -and I should have no illusion that it is mine!- is to turn on the heating. Buzzing air-cons, mobile space-heaters and electric nose warmers are sold by the thousands. No wonder the higher need for gas and coal in 2nd tire cities. But because we all know that this will not be given, we can be looking forward to romantic winter evenings around candlelight while warming our feet in the oven.

Disillusioned you walk home. Have you been cheated? Here in China you never know. You will always wonder whether your Chinese neighbors get a better deal, knowing the well practiced saying : “If everything goes wrong, you can always cheat a loawai (foreigner)” …

And so you walk home, determined not to allow this to affect your emotions by happily reminding yourself that you’ve just paid next year’s rent for your apartment: they can’t change that now!! You were not really happy with the apartment in the beginning: it was old, badly insulated, dark with blue tinted panes in the barred windows and full of mold, dust and cockroaches. But you’ve invested some kuai and managed to actually make it cozy. Now, you don’t really want to move, even if you had a chance. For moving house in Chengdu comes close to a poorly planned suicide attempt. Once -and never again!! – which, come to think of it, is also the case of a well-planned suicide. But moving house is a constant fight with the movers who will try to convince you that only 2 tables, 3 mugs and 1 tissue box fit in the truck each round and that it may take up to 12 rounds to move all your belongings. Well, not all, because they decided that your plants are not worth moving…

But even if you are foolish enough to take this fight, there will be no company ready to move you now. Nobody really knows why -and those who know will surely not tell; and those who tell will surely not be believed- but suddenly 2 weeks ago China ran out of diesel fuel. Kilometers-long lines of waiting trucks can now be seen near diesel selling stations. Even our own drivers take shifts lining up to get one tank loaded, waiting up to 3 days per tank. The unfortunate, that is: those without government relations or under-the-table money, or the honest (who usually end up as the unfortunate) may only get half a tank. Many companies simply close their doors and schools let their students come by taxi. And the government, ah well, the concern that all this may lead to social instability is less troubling than the mind boggling number of their ‘senior’ officials’ car park. They are still wondering how in the world they could have managed to buy so many millions of 4-wheel drives and Audi’s… unless it also includes ‘senior’ street sweepers. And how to stop companies from moving investments to neighboring countries. And how to re-educate the world about the true meaning of the Nobel price, and its most recent winner, who, truly!, is no more than a petty thief. A new addition to the long list of taboos and blacklisted words in China.

And so, you were walking home, only to discover that a crowd is blocking the way to your apartment block’s stairway. The party is a mob paid by the developer who has been awarded with the contract to demolish your neighborhood and prepare the way for luxurious apartments. It is a lucrative goldmine for both the contractors and the local government officials. Residents that object against it (or want to see a higher buy-out premium, that in some cases can go up to millions of RMB per person) can find themselves threatened, bullied, tortured and, more often recently, killed. In this land of unlimited opportunities, the local officials do not want to miss the boat and just the Audi from work is not enough.

You may as well join the other crowd that, rather than walking home, is running off to the States, which is still the heaven-on-earth in the eyes of most Chinese who have never heard of the decay of the Roman Empire. Pregnant Chinese ladies are flown to California by the hundreds to deliver their own USA citizen, young and fresh, after they survived a facelift of cosmetic surgery they believed will get them higher up on the ladder of the well-to-do. Who knows what they’ll do next… Chinese scientists genetically engineered a monkey that now glows in ultraviolet light… Ladies, what are you waiting for?

Those who do not need to worry about the inflation and who missed this investment strategy will send their son or daughter to study in the US. Recent research has revealed that this is mostly motivated by the parents’ pride-full need to show off, not realizing the low quality of their selected university, that in a crisis-stricken money- needed university, is eager to enroll rich foreign students, ignoring standards and requirements (except of course the money requirement) and blind for the social and cultural difficulties for the child. It is a statement, and for Chinese parents, that is enough.

In the end, we cheat ourselves more than we cheat others.

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