Quick Notes from Beijing

By James Fallows

Thanks very much to the latest guest team for their ongoing dispatches. Herewith, on a sanity break from other duties, some quick notes on what I first notice compared with my latest stint here last summer:

1) Pollution in Beijing itself has been as bad as the very worst I remember from the olden era. The view below (11am China time, Feb 23) has been more or less unvarying for the past four days. PM2.5 readings through that period have been steadily in the "hazardous" or "beyond index" category. I don't recall a stretch this bad, this long, before. Offered less as complaint than as reality check.

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[Update: after four+ days of incredible blear, today, Thursday, the skies are dramatically brighter, with visible blue. Don't know why -- it's not windy, as if a big front had come through. Grateful whatever the cause.]

2) Prices are higher for everything, especially food. By Western standards they are of course very low. But by Western standards people's incomes are also very low. I see why there is so much talk about the disruptive effects of inflation. (Letting the RMB go up faster would help, but that's a topic for some other time.)

3) Internet blockages and social media interference seem worse than I remember experiencing between 2006 and 2009, except in the tensest Tibet-riot periods. Even VPNs sometimes don't work or are slow -- especially this past weekend when no one knew how serious the "Jasmine" demonstrations would become. To illustrate the difference this can make even if you're willing to shell out (as most Chinese citizens wouldn't be) $60 a year for a VPN to get around Great Firewall restrictions, here is a download screen showing progress on a file I was trying to save, from a server in the US:


If you can't read the small print, it's estimating 1 hour and 31 minutes to finish downloading a 34MB file. As it happened, shortly thereafter the connection improved and the file eventually loaded in "only" about eight minutes. But extrapolate that as an efficiency tax on the system as a whole. As I have mentioned many times, the whole setup here is quite an amazing combination of laissez-faire/chaos and cumbersome over-control. As many other people have mentioned, this is accompanied at the moment by a big media campaign pointing to the Middle East as an example of the kind of disorder China must avoid. The situation makes all the more startling the UN Security Council statement about Libya that China (along with other Permanent Members) approved yesterday:

>>The members of the Security Council underlined the need for the Government of Libya to respect the freedom of peaceful assembly and of expression, including freedom of the press. They called for the immediate lifting of restrictions on all forms of the media.<<

Emphasis mine, to indicate freedoms specifically not respected in China when inconvenient for the government and notably limited right at the moment. Lack of self-awareness on the government's part? Deciding that looking hypocritical was the lesser evil, versus standing alongside Qaddafi? Can't be sure.

4) Smiley curve. As mentioned in the magazine here and on this site here, many "made in China" exports are actually mere repackaging of high-value components from Japan, Germany, Korea, the United States, or someplace else. China is a huge export power, but not as huge as it seems. Latest evidence in this McKinsey report (free registration required). It said that if you separate the "real" Chinese content from what is counted as total Chinese exports, exports accounted for only about 1/5th of the recent increase in China's GDP -- rather than 1/3, as most reports would suggest, or nearly 2/3rds, as reported a few years ago. China still has a big trade surplus; it still relies too much on exports for growth; its economy is still out of balance with the rest of the world's. But the picture is a little different from the way it's usually portrayed. Here's the main McKinsey chart showing export-growth as a share of Chinese GDP increase:

Back to typing, and back to this week's guests.