Friday, February 28, 2014

Hushed or Chopped

The cost of press freedom in Hong Kong?

This New York Times article (and others like it) reports on the vicious stabbing of a prominent Hong Kong newspaper senior editor (Kevin Lau of the Chinese-language Ming Pau) by a knife-wielding assailant who was aided by a getaway motorbike driver. Mr. Lau had been a strident voice in calling for the investigation of the offshore wealth of Chinese officials. Sadly and suspiciously, he is not the first such investigator to have been met with threats, or worse consequences. Reporters have been forced into self-censorship, often by anonymous calls in the middle of the night by parties wishing to discuss family safety. Kevin Lau’s just happens to be the most blatant assault to date. Equally troubling is that many of these acts of intimidation and violence against Hong Kong reporter have gone unsolved by the usually-efficient local police.
Consider also the threats of expulsion currently leveled against several international reporters from the Mainland. The New York Times in particular has been facing pressure on its locally based staff since it broke the story about Wen Jiabao’s multi-billion dollar wealth accumulation while acting as Prime Minister.
For all the crackdowns on corruption and economic crimes that the Xi administration is undertaking, it means nothing in the long run if the leadership counterbalances such worthy programs with harsher (and possibly criminal) repression of human rights and individual freedom. Such dichotomous policies can only lead to anger, tears, and yes, more bloodshed.

Friday, February 21, 2014

Not Worth Dying For

Paying the ultimate price for ambition

This SCMP article provides further details of the 33-year-old JP Morgan FX trader who jumped to his death in Hong Kong earlier this week. Sources cited “work stress” as a prime reason for the young man’s action. Thoughts and prayers go out to his loved ones.
(R - E) = H, or Reality minus Expectations equals Happiness. This is a handy formula to measure mental well-being; both variables need to be present in proportionate quantities to get a positive result. The banking industry is at a crossroads where that formula is falling out of whack far too easily. On the one hand, expectations remain high. Movies such as “The Wolf of Wall Street” don’t help. Despite depicting the obvious ills of debauchery, the movie and book evoke a nagging sense of “those were sure good years” for many now chasing their fortunes. Banking is still regarded as one of the most lucrative professions in the world.
In Asia (particularly China), the lofty expectations are further amplified by cultural and economic pressures. In the past two decades, values have become skewed towards material and professional success, away from life balance, spiritual well-being and physical health. It’s a sad fact that China and Japan rank highest among countries where overworked workers commit suicide. Korea is no doubt close behind.
However, the reality of the banking industry is that its best years are clearly in the past. Fees have been falling across all business lines. Regulations and compliance issues have stiffened over the past few years, limiting risk taking and profit opportunities. The public and media continue to vilify banking practitioners without differentiating between the vast array of businesses that bankers undertake. Hiring practices in Asia have come under close scrutiny, despite the fact that hiring well-connected professionals who open doors in local markets is a marketing strategy deployed by companies in every industry.
Globally, banks have been taking steps to address the issue of overwork, trying to mandate maximum working hours per week and change the hell-bent culture of their institutions. As laudable as such intentions may be, much else needs to be done (and some time inevitably needs to pass) before the industry’s evolution can settle down to a point where the (R - E) = H formula produces results that are more consistently in the black. In the meantime, let's hope that all young professionals, even bankers, keep their lives in perspective.  

Saturday, February 15, 2014

Can Buy Me Love

Putting money where your heart is.

I’m not sure if this is the most or least romantic gesture this Valentine’s Day in China. According to this article, a man from Hangzhou proposed to his girlfriend by creating a bouquet of 999 paper roses out of 2,000 RMB100 banknotes, worth RMB 200,000 (US$32,800). He did this in lieu of offering to buy a house and car, as suggested by his sweetheart’s family, because he could not yet afford them. Tacky or not? No matter to the rest of us; she said yes.

Friday, February 14, 2014

A Case for Corruption or Charity?

Hardly the road to riches, at least officially

Pity the local civil servant in China. No, really. According to a leaked report in this article, 84% of local officials around Hunan province earn less than US$650 per month. Civil servants in other locales across the country are presumed to be paid similarly. In dispute is whether there are other official benefits (e.g. housing, medical) that augment this piddly salary. But even if there are other such perks, they are likely not to be meaningful enough to change an obvious fact - CCP officials at the local level are paid like crap. One individual is even quoted as saying that he makes less than some migrant workers. In a country where the state is considered all-knowing and all-powerful, this is rich irony indeed.

Yet, despite this circumstance, civil servant jobs are among the most sought after by university graduates in China. Why this paradox, it is easy to wonder. On the plus side of being a civil servant pencil-pusher, there are a) job security, b) prestige, c) proximity to power and d) a feel-good factor of working for the public good. But, more nefariously, there is also the darker force at work – the big “C” – that makes a civil servant’s job much more lucrative than the headline numbers suggest. For sure, the need to secure government approvals and licenses to engage in so much private enterprise makes the wooing of local officials a necessity. So occasions for bureaucrats to receive under-the-table sums and lavish entertainment have been rife and widely reported. 
Few doubt that having a more efficient public sector populated with capable and empowered individuals who are paid a fair income would be a major step in the right direction to reduce such leakage – in China and anywhere. Singapore is an often-raised example of a well-managed public sector. However, one wonders how quickly such reform is likely to happen in a ginormous place like China. A mindset shift could require a generation or two and the enduring of much social tumult. In the meantime, one has to assume that, one way or another, civil servants are going to have to find other means of scratching out a decent living in the post-communist PRC. Call it charity, if need be.

Wednesday, February 12, 2014

Nanny-tell-all in China

This article (Business Insider) is a first-hand account of a young English nanny who went to work in China for a wealthy local family and got schooled herself in the modern trappings of the Middle Kingdom. To frame the storyline differently, Mary Poppins went to China and got a spoon full of reality. Her account is packed with stereotypical elements, but it’s an amusing read nevertheless.
The plot goes something like this: idealistic English university grad who has read something about modern Chinese history and Mao’s “Red” China is shocked (shocked!, mind you) to realize how materialistic 21st century allegedly-Communist China has become. She encounters no little red books, no collectivist farms and factory complexes churning out everyday goods for everyday comrades. Rather, her host family’s possessions include stacks of designer shoes, a garage full of Porsche’s, kitschy Western furnishings, and more luxury brands than is displayed in a typical Vogue magazine. Naturally, the kid – her charge - is a bit of a spoiled brat. He picks his nose and wipes his hand on her, and exhibits a number of other princelingly ill-manners.
Yet, despite the moral ravages of wealthy privilege, including finding distractions in lavish banquets and shopping sprees, the kid’s Mom somehow manages to display love and affection for her offspring. She bathes the kid by herself, playing games while she does so. Amazingly, there is a sense of humanity and family values in this exotic Oriental land, after all.

This article may say more about the author's maturity and sense of professional propriety than shed any new light on what China is about these days. Perhaps she might have felt less discombobulated if she had worked in a household manned by eunuchs and rickshaw pullers, or in a farming commune in the hills outside Kunming. Surely, such vestiges of the "real" China still exist, at least in popular imagination.

Thursday, February 6, 2014

New York x 2 = Shanghai

To Cadre, with love.

The formula in the title refers to the amount that the average Shanghai luxury shopper spends on his/her most recent purchase ($1,000) versus the average New York shopper ($500), according to this Jing Daily article. Since statistics can be manipulated to drive just about any argument, what is one to make of this result? Are nouveau riche Chinese just out to outspend their American counterparts? Is Hugo Boss the Chinese Levi’s Strauss?
Perhaps not. An obvious mitigating factor is that the luxury duties on the Mainland make a Loro Piana sweater wildly more expensive than the same model in Manhattan. A more interesting fact is the purpose of the purchases – in China, the percentage of consumers buying items as gifts are between 10-20% higher than in the US. The cynic would assert that differential reflects the official corruption and graft still present in China, despite recent crackdowns. In fact, bestowing gifts – whether to curry favor or not – is likely to be a more general trend across Chinese society, particularly these days. And it stands to reason that purchases made as gifts reflect more immediate needs, thereby forcing consumers to pay the higher local prices rather than wait for that trip to Hong Kong, Milan, Paris etc to indulge their indulgent fancies.

Saturday, February 1, 2014

Expressing Love, with Spam

Nothing says “Happy New Year” like it.

In America, it’s either food for the underprivileged, or a damn fine door stopper. Not so in South Korea. Spam (the pork shoulder kind, not the unwanted email ads for Viagra) has held a special place in Korea’s culinary history for the past sixty years. In the years of privation during and following the Korean War, Spam was a luxury – tasty and safe meat that American GIs brought to Korean shores. And despite the country’s rise to the world’s first world elite over the ensuing decades, Spam's status symbol has been surprisingly robust. During the Lunar New Year celebrations, it is often encased in smart-looking boxes, sometimes alongside expensive wine or other meats. It is a well-received gift, one that can be assured of being consumed with relish (or following common Korean culinary practices, stir-fried with sour kimchee or stewed with instant noodles).
Korea’s love of the stuff has made it the second biggest market in the world for the telltale blue and pink tins. In a world of ever-elevating standards of status, it’s good to know that some humble things can hold their own. What, still don’t like Spam? Don’t knock it until you try it, at least in Korea.