June 26, 2005

09:01:00 am Housing Prices Set to Tumble?  

About a week ago in one of our e-mails we made a statement that we thought US housing prices had likely peaked. While we've been thinking that this was around the corner for oh-about-five-years-or-so, what prompted our comment was seeing the June 13, 2005 cover of Time at Tower Books in Tokyo. The cover headline: "Home $weet Home--Why we are going gaga over real estate." As we have explained before (see our March 20, 2005 post on the "falling" US dollar which has risen 11% against the euro since Newsweek decided to lament the dollar's decline with a cover story), the mainstream media tends to get it exactly wrong when it comes to financial trends. They write about how hot something is, just when it is due to cool down, and they write about how bad some asset is performing, just about when it begins outperforming. The reason for this is simple. Asset performance is not news until it has either significantly outperformed or significantly underperformed its norm for an extended period. "Stock Rise in Line with Historical Norms" is not a headline that sells, and so you rarely see a report like that. But by the time asset performance is news, things are usually so out of line that the trend is about to reverse. So the media are decent predictors of asset price trends--if you expect the opposite of what they are reporting. Seeing real estate on the cover of Time--especially in conjunction with the word "gaga" in a breathless headline--should not reassure you about the future rate of appreciation of US housing prices.

Others have written that US housing prices are higher than is fundamentally justified. Most notable is Yale economics professor Robert Shiller. The second edition of his book Irrational Exuberance (which we have not read) came out in February, focusing on housing prices. The first edition of this book came out in March 2000--within one week of the US stock market peak--stated that stocks were grossly overvalued. Today, over five years later, NASDAQ is about 60% lower. Also notable is the British newsmagazine The Economist, which takes a more serious and long-term view of events than is typical of the media. It made housing prices its cover story last week (issue dated June 18-24, 2005) two weeks after Time's gushing piece. It had a different message: housing prices worldwide are at levels not supported by fundamentals, representing the biggest financial bubble in human history. Below average returns or falling prices are to be expected over the next decade or so in many countries. The good news for Americans? The prices in many countries are even more outrageous than in the US, especially in the UK, Australia, and Spain. Prices have begun falling in the first two countries, according to some price surveys. Readers of our posts may recall think they've heard this before, and you have. Although not the cover story, the Economist wrote about this in March (see our March 21 post summarizing what they said then). Their story is similar this time, the main difference being three months have passed and worldwide prices in the aggregate are even more out of kilter. The Economist bases its analysis on historical returns and a comparison of rent versus purchase prices. In many developed countries, including the US, renting now makes more sense than buying, based on their models.

They don't suggest prices will collapse overnight. Prices may hold steady or rise or decline by small amounts for a decade or more to correct. The Economist projects that in the US, if rent prices rose by 2.5% annually for a dozen years (around the current rate of inflation), while house prices remained flat (i.e., fell in real terms), things would be back to normal. That's not a disaster, but it's much different than the past decade or so. But it is better than the country we are now in--Japan--has seen. Housing prices here peaked in 1989. Since then, they have decline 15 consecutive years. Let's repeat that. House prices in 1990 in Japan were lower than in 1989. Then they fell again in 1991. Then they fell again in 1992. Then they fell again in 1993. And so on through last year 2004. These declines have been muted somewhat because deflation has occurred in Japan over this period (i.e., prices in general have fallen--one yen buys more today than it did 15 years ago). But even adjusting for deflation, house prices in Japan in real terms are worth less now than in 1989.

The US is a vast country and not all regions perform the same. In the early 1990s, house prices fell steeply in the Northeast and in California, but were steady or rising in other areas. After September 11, house prices in Chicago dropped sharply for a few months (which is why we purchased then), but they have more than made up for this decline since then. But Chicago has not skyrocketed like San Diego and some other areas over the past few years. Those areas that have appreciated most are the most vulnerable to an outright price drop now.

We are at the end of the second quarter 2005 and no doubt when the figures for this quarter are available in a few months, prices will have risen through the end of June. At some point, though, the aggregate price increases in the US will stop, or peter out to the point of barely changing. We don't know when, it could happen in the third quarter or perhaps it will not be for a few more quarters or even a few more years. We are comfortable saying that looking backward five or ten years from now, more likely than not, US real housing prices will have underperformed their historical returns from their second quarter 2005 level, perhaps by a wide margin.

This does not mean you should sell your home (although if you live in San Diego or San Francisco, putting it on the market might not be a bad idea!). After all, you do have to live somewhere (on average, though, renting is now more economical than owning if you buying right now). What we are saying is that you should not count on future equity appreciation in your home. If you have home equity loans, interest-only mortgages, or any other exotic financing method, you should probably switch to something that reduces your debt outstanding instead of increasing it or keeping it steady. Own a second property as a speculative investment? Think again if you are counting on appreciation in the investment property to make the investment profitable. If the investment is not cash flow positive, you should flip it now.

For the moment you can read the Economist story online (this link may not work at some point in the future):

http://economist.com/printedition/displaystory.cfm?story_id=4079027

The Economist's editorial on house prices is also available online at present (same caveat about this link working in the future):

http://economist.com/printedition/displaystory.cfm?Story_ID=4079458

Send feedback • Permalink

June 23, 2005

07:29:30 am Asian Baseball  

On consecutive nights, June 16 and 17, we attended games in Seoul, South Korea and Tokyo, Japan. Each country has some differences from the US and from each other, but the similarities are greater than the differences and we had no trouble following what was occurring.

Here are our notes on what we saw, along with a little extra research we did on Korean baseball on the web. We did not have an opportunity to research Japanese baseball, so some of our notes on it are less definite. There is probably more information on it than on Korean baseball on the web, since it has been around longer and is a higher caliber league.

Thursday, June 16, 2005
Samsung Lions 5 LG Twins 2 at Jamsil Stadium, Seoul
Friday, June 17, 2005
Lotte Marines 5 Yakult Swallows 1 at Jingu Stadium, Tokyo

- Attendance, stadium capacity, and ticket prices. We don't know the exact figures, but we estimate that each stadium had 25,000 - 30,000 seats, about half of which were filled. Jamsil Stadium is the main stadium in Seoul (we think), although there is one other. Jingu Stadium is a secondary stadium to Tokyo Dome, which is much larger with something like 80,000 seats. For each game, we were able to buy good tickets at the stadium right before the start. In Seoul, we sat even with first base, maybe 40 rows up, and in Tokyo, we sat around row 10 of the upper deck, exactly behind home plate. Tickets in Seoul were priced at $8 and $4. We splurged on the $8 seats, but it appeared that more people opted for the cheaper seats. While this was probably due to price, there was also a coordinated camaraderie to the cheering in the outfield that some fans may have preferred to be part of. In Tokyo, as with everything else, the tickets were much more expensive. We paid around $30 per ticket. Prices ranged from above $40, which seemed not to be available despite many empty seats, to below $10. In other words, similar prices to the US. As in Seoul, there appeared to be more people in the outfield seats than in the higher-priced locations. There were a few luxury boxes in Seoul, but less than you would find in the US. We don't remember any in Tokyo, but they would have been below us, so we may not have noticed them.

- Ball-strike count. In both countries, strikes are listed before balls on the scoreboard, making it a strike-ball count, the opposite of in the US.

- Beer vendors. In Tokyo, beer vendors don't lug the beer around with them while they walk through the stands. Instead, the beer wait staff--two or three people per section or two--patrols the stands, takes your order, goes to get the beer, and brings it to you.

- Bullpens. At Jamsil Stadium in Seoul, the bullpens were right next to the dugout, which while good for the managers, meant a large foul territory, with the fans further away from the action, much like Oakland Coliseum. At Jingu Stadium in Tokyo, the bullpens were along the outfield foul lines as they are in some US stadiums (e.g., Wrigley Field), but the foul territory was still quite large.

- Cheering. The fans at each game were livelier and more organized than in the US. The Korean crowd was a cross between a South American soccer crowd and an American high school football crowd, as it responded in unison to the cheerleaders. Much of the Korean crowd had ThunderStix, especially in the outfield, even though you had to buy them for one dollar. The Japanese crowd did not have cheerleaders or ThunderStix, but like Korea, they had drums in the outfield as if it were a soccer match.

- Dimensions. The Korean field, in meters, from left to right was 100, 110, 125, 110, and 100. 100 meters is 328 feet, so this is comparable to a US park, with center field at 410 feet a bit longer than average. The completely symmetrical nature of the park made it feel like a US park of the 1960s-1980s era. We would guess though, that it was built in the late 1980s or early 1990s, but we are not sure. The Japanese field did not have dimensions on the outfield wall.

- First pitch. In Japan, the ceremonial first pitch comes complete with a batter standing in the batter's box.

- Food. Yes, the food is different, but you can get some of the same crap they sell in America. And let's face it, US ballpark food really is crap. We each ate a full meal at the game in Tokyo, something that Nick did not do during his entire 2004 baseball stadium tour, and something that Deanna has probably only done once before, in Seattle, where you can buy sushi at the game.

- Food from outside the stadium. No prohibition exists on bringing in outside food in South Korea. There are numerous fast food restaurants right outside the stadium, but the stadium may still be getting a cut of their take, as they are part of the overall stadium complex.

- Foul balls. At both venues, ushers in the vicinity blow whistles to alert you that a foul ball is headed your way. Japanese fans are fabulously lethargic in chasing foul balls, almost as if it is a dishonor to be the one who gets to the ball first. Ideally, they prefer a foul ball that bounces to them without them having to leave their seat.

- Foul screens. Present around the entire field in Japan--not just the area behind home plate--to protect the crowd from a line drive foul ball.

- Foreign players. The South Korean league allows each team to have two non-Korean players. Japan also limits the number of non-Japanese players per team. The US leagues have no nationality requirements, and certainly every team has far more than two non-Americans, as the best players in the world tend play in the US. In Japan and Korea, the foreign players tend to be US players with a contract dispute, or on the downside of their career, or players who prefer to be a good player in a foreign league instead of a mediocre player in Major League Baseball. Luther Hackman was the starting pitcher for the Samsung Lions at the game we saw. He was a mediocre long reliever and spot starter for St. Louis in 2002, later playing for San Diego. For Samsung, he pitched 6 1/3 innings, giving up two runs on five hits--a good performance. Benny Agbayani batted clean up for the Lotte Marines, the team with the best record in Japan. In the US, we remember him playing for the Mets in 2000 when they knocked off the Cardinals in the National League Championship Series. He was a solid player, but certainly not the clean-up hitter for the best team in the league. Alex Ramirez played left field for one the Japanese teams. His name is familiar, but we can't recall if he played MLB previously.

- Game time. 6 PM or 6:30 PM seems to be the most common start times for night games in both countries, 35 to 70 minutes earlier than in the US.

- Home plate seats. In Seoul, many of the seats behind home had tables, like a picnic area you would find in the outfield of a US ballpark.

- Leagues. The Korean Baseball Organization was founded in 1982 and presently consists of eight teams in one division. Japanese baseball has been around for decades longer and consists of two leagues, the Central and the Pacific, each with six teams.

- Line score. In the US, the game status or result is often summarized by the total number of runs, hits, and errors for each team, a convention dating back to the 19th century. Example:

(We cannot get these two line score examples to align correctly, but hopefully you can figure out what we intend.)

R H E
St. Louis 6 12 0
Cincinnati 1 4 0

In both Korea and Japan, they add an extra number, labeled B, for the number of batters who reach base by walk or hit by a pitch.

R H E B
Samsung 5 8 1 6
LG 2 5 0 2

Nick has thought for a couple years that if you were designing a line score today from scratch to convey the most important information, it would be different from the US standard of runs-hits-errors. Runs would remain first, as it is always most important to know the score. But next you would probably want to know the number of players who reached base safely without making an out (through hit, walk, hit by pitch, error, interference, or strikeout followed by a wild pitch or passed ball), as baserunners are needed before runs can be scored. This piece of information subsumes, and is more important than the number of hits or errors by themselves. The Asian format of RHEB is not this exactly, but it is a reasonable compromise: preserving the traditional RHE line score and adding one additional figure that indicates the number of additional baserunners. We would like to see the US adopt usage of RHEB.

- National anthem. No signing of a patriotic song occurs before the game in Tokyo. We're not sure about Korea as we got the stadium just after the start of the game.

- Playoffs. The 4th place team in Korea plays the 3rd place team in a best of 5 series. The winner of that plays the 2nd place team, also in a best of 5. The winner of that plays the 1st place team in a best of 7 series. Home field advantage in the best of 5 series is 3-2, with the higher seed getting the first three games at home. Home field advantage in the best of 7 varies based on whether the teams are Seoul based or not. (Three of the eight teams in the league are in Seoul). Overall, compared to the US, a higher percentage of teams make the playoffs, but having the best record in the regular season is rewarded to a greater degree in Korea, as the team with the best record gets a double bye. In the US, the best record gets an extra home game in some situations (but no extra game in others and one less home game in one particular circumstance), not much of a reward. In Japan, the winners of the two leagues meet in the Japan Series. In one league, the three best regular season teams advance to the playoffs, presumably with the 2nd and 3rd place teams playing each other and the winner of that playing the 1st place team. We don't know if the other league has the same or a different playoff setup.

- Prerecorded music. The US concept of not playing music once the hitter is in the batter's box does not exist in South Korea, and why should it? After all, this is Asia, where a cacophony of loud noises occurs constantly.

- Relief pitching. Both managers at each game managed lefty/righty matchups as if they were the second coming of Tony LaRussa. One side used five relief pitchers in the last two innings, switching to a left-handed pitcher every time a left-handed batter came to bat, and then switching back to a right-handed pitcher when the next batter was right handed.

- Schedule. Each of the eight Korean teams plays each other 18 times for a total of 126 games. We think Japan plays around 130 games. This is the first year for interleague play in Japan, which has proved popular, especially after a players' strike last season. The strike protested a proposed contraction, which similar to MLB, did not occur. The number of interleague games is significantly more in Japan than the 12-18 in the US, something like 40 games or more.

- Sixth inning stretch. Nothing special happened during the middle of the 7th inning in South Korea, but during the middle of the 6th, the reserve players took to the field to do calisthenics while the grounds crew grated the field for the first time since the game began.

- Surface. The Seoul stadium was grass, while the Tokyo stadium was Astroturf.

- Ties. In South Korea, a regular-season game is declared a tie if there is no victor after 12 innings. Japan also has ties, we presume after 12 innings, but we are not sure.

- Trash pickup. Being obsessed with cleanliness, Japanese ushers come and pick up the accumulated trash to date in the middle of the game.

Send feedback • Permalink

June 22, 2005

04:04:33 am South Korea  

South Korea

Country Background:
Population: 49 million
Per capita GDP: $18,000 in purchasing power parity; $12,000 in absolute terms
Size: slightly larger than Indiana
Currency: won, 1000 per US dollar
Language: Korean. Basic English spoken by many people.
Independence: Korea is an ancient society although it has been controlled by other countries at times. China exerted heavy influence in unifying various Korean kingdoms and having Korea as an ally from the seventh century onward. Japan has intervened repeatedly in Korea, most recently in 1592 in an invasion that did not last and then again in the late 19th century. Japan's influence in Korea grew as follows. In 1874, Japan imposed a treaty on Korea, effectively ending its close relationship with China and guaranteeing Japan commercial access to the country. In 1895, after defeating China in a war primarily over the status of Korea, Japan made Korea a protectorate, and in 1910 annexed it as a colony of Japan. After Japan's defeat in World War II, the Soviets provided security in Korea north of the 38th parallel, and the Americans did the same south of the 38th parallel. Attempts at peaceful reunification failed. After the Americans withdrew their security forces in 1949, North Korea attempted to reunify the country by force, invading South Korea in June 1950. The United Nations, led by the Americans, intervened, saving the south from the north, but ultimately fighting to a stalemate once the Chinese entered the war on the side of the north. A truce has held since July 1953. Since then the south has boomed, and the north has stagnated as most closed communist country remaining on earth. Following the example of Germany and Vietnam, it seems almost inevitable that the two Koreas will rejoin, but whether this will happen within a few years or a few decades remains unclear.

Itinerary:
Mongolian Airlines flight from Ulaanbaatar to Seoul
Four nights at Hamilton Hotel, Itaewon area

Seoul
Monday, June 13, 2005 - Friday, June 17, 2005
Temperature high/low during our stay: 85/65
Population: 11 million

Seoul is the capital and largest city in South Korea. The city hosted the 1988 Summer Olympics and co-hosted the 2002 World Cup, along with Tokyo.

Notable Activities:

Panmunjeom & DMZ Tour. Two distinct tours in the same area; each has don't-miss elements. At Panmunjeom, you see the conference room where the cease-fire talks occurred and you can step over into North Korea. The atmosphere is intense--South Korean soldiers stand in a ready posture to repel an attack while North Korean soldiers watch you from their observation tower. On the DMZ tour, you explore the 3rd Infiltration Tunnel, over 200 feet underground, which North Korea built in the 1970s to launch an invasion of the south.

War Memorial of Korea. Spend a half day at this excellent museum that chronicles Korea's military history. Naturally, the bulk of the museum is devoted to the Korean War.

Baseball at Jamsil Sports Complex. The Korean Baseball Organization is an 8-team professional league founded in 1982. Three of the eight teams are Seoul based, so there is a game in town most nights. We saw the Samsung Lions beat the LG Twins 5-2, scoring one in the 8th to tie the game and three in the 9th to win. See separate post on Asian baseball.

Star Wars Episode III, Revenge of the Sith. We had wanted to see this movie since its May 19 premiere, but we were in China then, and China is the only country we have been in so far which dubs English movies in their own language. All of the other countries have kept the English audio but added subtitles in their own language. Star Wars had not opened yet in Mongolia, so we had to wait until Korea to see it. We could have purchased an English-language DVD of the film for about $1 in Beijing, as it was commonly available on the street in easy view of the police. China is addressing its piracy issue, but at a much more leisurely pace than it leads US politicians and business leaders to believe.

Kyobo Book Centre. The best English language book selection of any bookstore we have yet encountered in a non-English-speaking country on this trip (this comment made before visiting Japan and Europe, where an even-better selection may be available).

Changdeokgung Palace. Seoul's city tour is mediocre and consists of a succession of similar looking palaces. This palace is the best one in Seoul, says Deanna, although it does not equal the Forbidden City in Beijing.

Commentary:

We were not sure at first if we wanted to go to South Korea. Nick had been there before in 1990, and since his shopping gene has been excised since then, he was not sure if he wanted to return. His impression was that South Korea offered great bargain shopping but its culture was less interesting than Japan, China, and other places. Ultimately, Deanna decided we should go, if for no other reason than she had several Korean-American friends and so she wanted to see the country for herself.

We are both glad we went. Seoul has become more modern and mature than it was 15 years ago, and was a nice place to spend four days after five weeks in less developed China and Mongolia. Seoul really is moving toward becoming a world-class city where people from any country could live. Just as South Korea is overlooked because of its larger neighbors Japan and China, Seoul is overshadowed as a city by larger and more advanced Tokyo to the east and faster changing Beijing and Shanghai to the west.

Consider this. South Koreas per-capita GDP is now only about 20% below that of New Zealand. The UN places Seoul as the 20th largest metropolitan area in the world. It has hosted the Olympics and co-hosted the World Cup. It has 11 subway lines. People learn English in school and can speak it to you on the street (of course, not perfectly, but you can get by if you are patient).

A significant lingering American presence remains from the Korean War, and we stayed right in the middle of it--Itaewon, which in the spirit of Chinatown as a place name, ought to be called Americatown, but is not. Over 30,000 US troops remain in South Korea, many of them at a base in Itaewon. Tourists looking for a native Korean experience stay far away from Itaewon, but for us it was nice to be in somewhat familiar surroundings after the past five weeks.

Considering how poor the country was 50 years ago after experiencing in succession 35 years as a Japanese colony, World War II, and the Korean War, it is remarkable to see how far they have come. South Korea is one of Asia's numerous economic miracles. It was christened in the late 80s as one of the four tigers--the others being Singapore, Hong Kong, and Taiwan--four Asian countries following in Japan's footsteps with tremendous economic growth. Today, and for some time, the tigers are on the threshold of no longer being considered developing countries. Statistically, you cannot really label Hong Kong, Singapore, or Taiwan as developing any more. They have developed, with per-capita incomes on par with places like Spain, Italy, and Australia. South Korea is not far behind.

One day Korea will unify. That occasion, as in Germany, is likely to be marked with unlimited joy and optimism, followed by a difficult decade or two of integration. In ballpark terms, the countries are similar sized, Germany at around 80 million people and Korea around 70 million if you add the north and the south together. South Korea is not as wealthy as West Germany was, and North Korea is much poorer than East Germany was. On the other hand, South Korea does not have the extensive and expensive social programs that West Germany replicated in the east when unification occurred. So it is unclear to us if Korea's unification will be more difficult or less difficult than Germany's--you could make the case either way. What is clear, though, is that unification will be difficult.

The optimism surrounding unification when it occurs may be correct in the short term and probably also the long term, but there will be a tough period of 10 or 20 years in between. The wealth disparity between the two countries, the written language differences (South Korea still uses Chinese characters, North Korea does not), and the different methods of government, laws, social programs, lifestyles, and customs after 60 years and counting of separation will be difficult to bridge. As one example, North Korea will provide a source of low-cost labor for South Korea, allowing it as a unified country to remain competitive in manufacturing for longer than South Korea by itself otherwise would. This, however, will drain manufacturing jobs away from the south (to the north) faster than would have occurred without reunification. So what's good for the combined country, or even South Korea as a whole, may be bad for segments of South Korean society. Nevertheless, that's the case with any form of change, even positive change.

Once unification appears likely, it will probably be touted as an investment theme. We think this may be correct measured over many decades, but is uncertain to provide excess returns in the first decade. In fact, if anything, unification may lead to Korea underperforming as an investment for a decade or so as it works through the many challenges of uniting.

Send feedback • Permalink

June 13, 2005

07:47:28 pm Mongolia  

Country Background:
Population: 3 million
Per capita GDP: $1,800 in purchasing power parity; $500 in absolute terms
Size: slightly larger than Alaska
Currency: tugrik, 1200 per US dollar
Language: Khalkha Mongol, used by over 90% of the population; Turkic, Russian, Chinese, and English also spoken.
Independence: 1921 from China

Itinerary:
Air China flight from Beijing to Ulaanbaatar
Four nights at Chinggis Khaan Hotel

Ulaanbaatar
Thursday, June 9, 2005 - Monday, June 13, 2005
Temperature high/low during our stay: 65/40. The climate here seems similar to Alaska. Tolerable, and occasionally warm during the summer, but very cold in winter. The average January temperature is well below zero Fahrenheit.
Population: 1 million

Ulaanbaatar is the capital and largest city of Mongolia. Like many places around the world, it is spelled differently now than the Anglicized spelling (Ulan Bator) that you learned in school, as more accurate translations become known. Depending on the source, though, you may still see it spelled the old way as two words (Ulan Bator), the old way but as one word (Ulanbator), the new way as one word (Ulaanbaatar), or the new way but as two words (Ulaan Baatar). Or maybe you'll see it spelled yet another way, mixing the old and the new (Ulaan Bator or Ulaanbator or some other variation). We'll stick with Ulaanbaatar, as that seems to be the preferred method here.

Another name spelled differently here than how it is traditionally spelled in the West is Chinggis Khaan aka Genghis Khan, the Mongolia leader who conquered much of Eurasia in the 13th century.

Notable Activities:
We had a full package tour in Mongolia, because we did not have time to research what to do. So we arrived without a guidebook and with our brain turned off, knowing that someone will meet us at the airport, take us everywhere we need to go, provide all meals, and make all decisions for us.

We toured the city on the first and third days, and the countryside around Terelj National Park the second. Our fourth day was a free day, during which we updated the web site. One full day is adequate to see all of the sites in the city, although you may want another day to hang out, shop, check e-mail, and so forth, as Ulaanbaatar is the only large city in the country. In one day, we could only see a portion of the countryside, which was beautiful. Most people spend more time in the countryside and the Gobi desert, traveling throughout the country, camping out or staying in a ger, the traditional Mongolian nomadic home.

Commentary:

Mongolia was the second communist country in the world, after the Soviet Union. After ruling much of Eurasia in the 13th century, the Mongol empire broke up in the 14th century, never to regain its former significance. China controlled what is now Mongolia beginning in 1691. With China consumed by its internal own problems between nationalists and the communists, Mongolia played the Soviet Union and China off against each other, and with Soviet backing, declared independence in 1921. Within a few years, the communists had firmly established their grip on Mongolia. With the fall of the Berlin Wall in November 1989, street protests here resulted in the communist party voluntarily gave up its constitutional power in March 1990. The country has been a democracy since then. As in many Eastern European countries, the former communist party has remained a leading political party (under a new name), but it is no longer the exclusive party.

As a former communist city, Ulaanbaatar is not pretty to look at. Nearly 70 years of communism have not yet been wiped away, and what capitalistic influences are present tend to the cheap and tacky variety. With a small domestic population of only 3 million people and a limited economy (per capita GDP is only $500 per person), there is relatively little foreign investment here even today. You won't find the Big Three American fast food outlets--McDonalds, KFC, and Pizza Hut--that have blanketed the rest of Asia. In fact, the only American chain restaurant here is bd's mongolian barbeque, a small chain started in the Detroit area in 1992, and with two Chicago locations, that just opened here last month. So now Mongolians can go to an American restaurant to enjoy traditional Mongolian food. Actually, most of its patrons are Western. More about it later.

Last Fall the decision to go to Mongolia was as easy as placing a green dot on the world map in our dining room. Mongolia sounded exotic, so why not go there. In his book Adventure Capitalist (see our Reading List post), Jim Rogers had some positive things to say, even titling a chapter of his book Digital Mongolia. Our Chinese travel agent, Yin Shuo, was able to book things in Mongolia, so when we were arranging our China itinerary as we were traveling through South America, we had Yin tack on four days in Mongolia after we left China.

We arrived and our guide Urnaa and our driver Chuluun met us. The two-lane road into the city was quite bumpy, a noticeable change from the four- or six-lane brand-new showcase superhighways that emanate from every airport in China, the airports themselves also being brand new. We drove through drab Ulaanbaatar, saw the first widespread graffiti so far in Asia, and then on to our rather expensive hotel, the Chinggis Khaan. The hotel looked impressive from afar, but upon closer inspection was not good value for money. Our room featured greenish wallpaper, a green Formica desktop, and greenish carpet. In other words, it was green. It would have been fashionable in the early 1960s, maybe. Throughout our stay, whenever we drove through the city, Nick looked out the window for a nicer hotel, and then concluded that the Chinggis Khaan probably was about the best Ulaanbaatar had to offer. It actually was not a bad hotel at all, it just was expensive for what you got. For the price, we expected the Llao Llao, but we got the Holiday Inn. You could probably book it directly without the double layer of travel agents and get a much better deal.

So a couple hours into our Mongolian adventure, we were bracing ourselves for a four long days in an unattractive place. Just what was it that Jim Rogers was so positive about? Actually, we can't remember what he wrote. The chapter title Digital Mongolia was probably a reference to the telecommunications infrastructure, and maybe he commented on how Mongolia had skipped forward to the era of ubiquitous cell phones and high-speed Internet connections. In 1999, when he was here, this may have been remarkable. But in 2005, this is true of everywhere we have been. Progress moves quickly, and our expectations rise rapidly. The more technology advances, the more we expect, and the more easily we are disappointed.

On our second day, our perspective of Mongolia changed completely. The countryside is as beautiful as Ulaanbaatar is unremarkable. Short grasses cover the land, making the entire countryside--from a distance--look like a manicured golf course. Herds of cattle, yaks, sheep, and goats wander the countryside unconstrained by fences. Now we understood why the backpacking crowd raves about Mongolia. We only saw one day's worth, and from many accounts not even the most scenic part of the country. There's the Gobi desert, a lakes region with great fishing, and other areas. But don't expect western conditions. The roads are bad, the worst we've seen other than Costa Rica, although probably no worse than many countries we are not going to. It takes a long time to get anywhere. And once you are there, you probably won't be staying in a place with a private bathroom or maybe not even hot water. For many people, this is no big deal, but you should be aware of it.

If Mongolia is unspoiled now, will they be able to keep it that way? From what we saw in Ulaanbaatar, we are not sure. Like many developing countries, there is little awareness of aesthetic considerations. Getting something built is more important than what it looks like. Litter prevention is unknown. Done with that bottle of water or that candy wrapper? Just throw it on the ground. Trash is everywhere. In the vast countryside, this is not much of a problem for now, but it could become a problem as more development occurs.

We received an e-mail commenting on the scenic quality of the countryside in our China pictures. The writer said the US could learn something about how to keep the countryside pretty. Actually, the opposite is true. Developing countries have little to teach and much to learn about beautification. If you don't see all of the litter, trash, ugly development, and pollution in developing countries, it is because we only take pictures of scenic things! These conditions are understandable to an extent. When you are poor, your priorities are different. You want a building that's functional and cheap; you can't afford beautiful. Litter on the other hand, is more an issue of education and behavior change than necessity. For reasons more easily observed than explained, it just seems there is a correlation between the amount of unnecessary litter and a countries economic and educational development. The US is no different. As a child, Nick can remember the roadside where he grew up strewn with litter. Now this is not the case. This is not to say that all litter in the US is gone, but there's less than in most countries, especially developing ones. The crying Indian paddling through the polluted stream has not yet reached the shores of Vietnam, China, or Mongolia. (As an aside, we wonder if the idyllic Native American village ever really existed. Our experience around the world is that indigenous people engaged in a subsistence living tend to have little regard for the look of where they live. Almost as a rule across different continents, their villages are strewn with garbage and careless, unnecessary litter. Nevertheless, it was a good ad campaign that helped clean up America, even if not factual!)

On our third day in Mongolia, we saw an ad in the English newspaper for Detroit American Bar. We chuckled, Detroit not being the first city that comes to mind, when you think of a place you want to visit. Just as the US bastardizes foreign culture by Americanizing things for its domestic audience (Macomb readers will remember the first Chinese restaurant in Macomb: Woo's Chop Suey and Steak House), so does the rest of the world often get Americana wrong. We recall California Fried Chicken in Indonesia and Chicago Dry Cleaners in Shanghai (hmm, all of the dry cleaners we know in Chicago are Chinese or Korean). We noted the address of this newly opened Motor City drinking establishment, "located just below bd's mongolian barbeque." Now wait a minute. Wasn't there a bd's on Clark Street in Chicago during the 1990s (now closed)? And weren't the owners of bd's from the Detroit area? Nick's friend Martin Brej, who toiled with him in the Philippines, turned Nick on to bd's in the mid-90s, after Martin had experienced it at business school in Ann Arbor, Michigan. We investigated.

It turns out this was not a case of misappropriated Americana or a copycat Mongolian barbeque concept stolen from America. It was the real thing. Having introduced Mongolia barbeque to America, bd was exporting the American Mongolian barbeque experience back to its country of origin. And his Mongolian franchisee decided a saloon named Detroit American bar was just the complement the restaurant needed.

For those who have not experienced it, Mongolian barbeque is a create-your-own meal experience where you select the meats, vegetables, spices, and sauces you want from a salad-bar type counter and then the restaurant's chefs cook your custom-made meal in front of you using long sticks on a flat circular grill (see image gallery). Nick first experienced this in Asia in 1990, and always expected it to catch on in the US, which it is has been slow to do, despite the popularity of the restaurants that have opened. At this point, we knew of a few restaurants in the Chicago area, such as bd's or Flattop Grill, which is a short walk from our house. Certainly, Mongolian barbeque ought to have caught on instead of karaoke.

We enter bd's. Instantly the manager, who is from Mongolia, walks up and introduces himself in perfect English. That is not normal Asian behavior.

Manager: Have you been here before?
Nick: Not here, but in Chicago.
Manager: Naperville or Vernon Hills?
Nick: (Impressed that someone from Mongolia has command of the names of Chicago suburbs) No, Clark Street, in the city.
Manager: We have 27 locations, but none in the city of Chicago. Only the suburbs.
Nick: (Realizing that his manager training probably neglected to mention the closing of a restaurant, but nonetheless impressed with the training he had received) Can you name all 27 locations?
Manager: (pointing upward to a merchandise display) I could, but it would be better for you to buy a t-shirt with all locations listed (Note: Tampa readers, bd's is coming to you this summer!)

So we proceeded to have an excellent meal at bd's, which not only tastes the same as we remember it, but also provided a similar experience. Copying the latter is an accomplishment, given different cultures and the staff's prior unfamiliarity with American restaurants. The staff, entirely Mongolian, is friendly and personable, engaging you in conversation in excellent English, and helping those Westerners new to the concept with what exactly to do. Later in the authentic Detroit American Bar, we met David, one of three Americans from bd's who are here for a few months to get the operation off the ground. They've done a great job and had a lot of fun doing it. Because of the huge differential in economic standards between the two countries, they probably will not make any money from their Ulaanbaatar franchise, but its good PR and a chance to refine the concept further in the States with what they learn from actually operating a Mongolian barbeque restaurant in Mongolia. Talking with the different people at this restaurant was one of the more interesting dining experiences we've had. It was the kind of positive, unexpected traveling experience that you can never predict, but which keeps you going. We would tell you more, but in the interest of time, we'll close out now.

Send feedback • Permalink

June 08, 2005

04:53:41 am China, Week 4  

Itinerary:

China Air flight from Lhasa to Xian
Two nights at the Bell Tower Hotel
China Eastern flight from Xian to Beijing
Five nights at Poly Plaza Hotel

Location Background:

Xian
Thursday, June 2, 2005 - Saturday, June 4, 2005
Temperature high/low during our stay: 90/70
Xian population: 7 million
Xian is the capital of the Shaanxi province, and is the city nearest the world famous Terra Cotta Warriors archeological site.

Xian Top Activities:
- Terra Cotta Warriors. One of the early emperor's put his subjects to work creating some 7000 unique life-size warriors made of terra cotta, to defend his tomb in the afterlife. We would not have wanted to be on the work crew of this roughly 40-year project, but it has resulted in one of the world's great archaeological sites some 2000 years later. See image gallery.
- Bike ride on top of city wall. The city wall around Xian is now completely restored. You can rent a bike on top of either the north gate or the south gate for a few dollars and ride on top of the wall. It takes about 90 minutes to ride around the entire wall.

Beijing
Saturday, June 4, 2005 - Thursday, June 9, 2005
Temperature high/low during our stay: 85/65
Population: 14 million
Beijing is the capital of China. It will host the Summer Olympics in 2008. It and Shanghai are the two most important cities of mainland China. Beijing looks and feels like a capital city, with wide streets, public plazas, and more low-rise construction than Shanghai with its commercial skyscrapers.

Beijing Top Activities:
- The Great Wall of China. There are numerous wall sites 60-90 minutes from Beijing. You won't go wrong at any of them. The most popular is Badaling, which Nick went to in 2004. The wall is steep and crowded at Badaling--it would be a liability trial lawyer's wet dream if only it were in the United States. On this trip, we went to Mutianyu, further away, at 90 minutes, and much less crowded as a result. You can take a cable car to the top of the hill where the wall is built, walk on the wall (it is steep at all sites, but Badaling is steeper than Mutianyu), and ride the toboggan chute down. See image gallery for multiple wall pictures. The steep shot of the stairs is at Badaling in 2004, but all other shots are at Mutianyu.
- Tiananmen Square, a huge public square with little decoration other than gates at each end and Mao's mausoleum. It's crowded and popular, so it's good for people watching. The National Museum and the Great Hall of the People face each other on each side of the square, while the Forbidden City is just to the north and the Urban Planning Center is just to the southeast, so all of these attractions are within walking distance of each other.
- National Museum of Chinese History. Under renovation until 2007 to get ready for the Olympics. A few exhibits are open. Okay, will probably be much better once renovations complete.
- The Great Hall of the People. A big building with lots of big rooms. Worth an hour.
- Forbidden City. The emperor's palace, probably the most popular attraction in Beijing. Featured in the movie The Last Emperor.
- Beijing Urban Planning Exhibition Center. Good, like similar centers we visited in Singapore, Hong Kong, and Shanghai (the Chinese do like to show off their prowess at city planning), but for such a new building, there is a disappointingly small amount of English. A real oversight with the Olympics coming.
- Lotus Lane (Houhai Hu). Restaurants and bars on a lake setting. Perfect for people watching. Did you know that 46% of Chinese women get their hair colored? This according to a Smith-Padgett observational survey of female passersby conducted on June 4, 2005 at Lotus Lane.
- Summer Palace. The Forbidden City apparently got a bit too steamy during the summer, so the royals had a similar complex built northwest of the city on a lake, where the breezes kept them from overheating.
- Beijing Opera. We saw three short performances that totaled about 80 minutes. That was just right. Worth seeing for that amount of time. The 800-seat theater had exactly 41 people in the audience, making it the least crowded place in all of China when the show began.
- Dazhaimen, Bai Family Restaurant. Great imperial-style restaurant in huge, scenic courtyard. Ask your hotel concierge to book a private room for you at this restaurant, with a waitress who speaks English since there no English menus. Pay attention to prices--there are many dishes under $10 and many dishes over $100. See Anniversary Dinner picture in image gallery.

China Week 4 Commentary:

We should report for the sake of accuracy that once we finished writing our week 3 post, which among other things mentioned how lousy we felt in Lhasa, Nick began to feel much better. So his fourth day in Lhasa was not so lousy after all, although Deanna still felt subpar, having not had the cathartic experience of scribing a blog complaining about her health.

During our trip, we have read two different, but nearly identical, quotations that say you should write your impressions of a place as soon as you arrive, before the unfamiliar becomes familiar. In this spirit, on Nick's first trip to China, he handwrote pages of observations now sitting in his filing cabinet back in Chicago. On this second, more familiar visit, he feels his observations may not be as sharp in this online web log as they are in those inaccessible notes stored back home. Why there's nothing in these blogs about how you can't walk 100 meters in China without bumping into a sidewalk merchant selling ice cream and something to drink, even on the Great Wall; or how the Chinese understand the concept of refrigeration quite well, but often fail to deliver an ice-cold Coke to a finicky American due to excessive opening of the refrigerator door. There's no explanation of how Pizza Hut is widely popular with the Chinese, yet has dozens of menu items you would not find in the US. No, those anecdotes, and a few dozen others that ought to be noted here, are not. The reason for this is found in what we offer as a corollary to the write-as-soon-as-you-arrive quotation. It states that as a practical matter you should write earlier in the trip rather than later, for your energy to comment on China in day 29 of a 30-day China trip will be somewhat flagging, as ours is now!

So rather than musing on in a directionless manner, we'll keep this post as mercifully short as the Beijing Opera we saw, and we will retake the stage in Mongolia.

Speaking of stages, there are also many loose ends on the world stage to discuss, and it seems we never have time to get to them. Traveling opens your mind up to so much that is going on around the globe, but the pace at which we travel makes it hard to go back and write about subsequent events in the places we've left behind. We're always writing about the new place where we've just arrived, but meanwhile interesting things are happening in the countries and continents already ticked off our list. Perhaps if we had more energy, we would comment on the Bolivian presidential resignation yesterday, the second silly South American country to drive its president from office for a silly reason after we left. Ecuador was the first, in April, an event we never got around to mentioning. Perhaps we should examine how a euro now costs 12 cents less than it did 10 weeks ago when we said we thought the dollar had bottomed. Things are also happening in places we have not yet been. Two European constitutional referendums have come and gone and we never translated any of the thoughts in our mind to the keyboard. We don't think the referendum failure is a disaster for Europe, or necessarily the end of a European constitution, but we don't know if we will ever get around to fleshing out those thoughts. That also is probably not a disaster for Europe.

We could explore our thought that the German stock market is now a buy, while the German bond market is a sell. Or maybe we will comment on Chinese-Japanese relations and how deep seated the anger between these two countries is. Over one-half of page five of today's China Daily, the main English-language paper in China, is devoted to biographical sketches of Japan's top 14 World War II criminals, all of whom were executed over 50 years ago--hardly breaking news. We could look at Japan's surprisingly strong economic growth in Q1, which suggests it is not headed for its fifth recession since 1990 as we thought and wrote it was several months ago. Why we could even answer our future skyscraper trivia contest question. But all of that will have to wait, as we procrastinate a bit longer.

1 feedback • Permalink

June 01, 2005

02:52:01 am China, Week 3  

Itinerary:
China Eastern Airlines flight from Shanghai to Yichang
Yangzi River Cruise upriver from Yichang to Chongqing on the East Queen, 4 nights
Air China flight from Chongqing to Lhasa (Tibet)
Four nights at ShangBaLa Hotel

Location Background:

Yangzi River / Three Gorges Dam
Wednesday, May 25, 2005 - Sunday, May 29, 2005
Temperature high/low during our stay: 80/60
Yichang population: 4 million
Chongqing population: 6 million (city); 33 million (municipality).
Population along river basin: 300 million

The Yangzi River is the longest river in China and the third longest in the world, after the Amazon and the Nile. The Three Gorges Dam, begun in 1994, will be the largest dam in the world once completed in 2009. The dam requires the resettlement of over one million people displaced by the resulting higher water level of the Yangzi River.

Chongqing is one of four municipalities in China, under direct central government control, rather than being part of a province (sort of like Washington, D.C. not being part of a state). The others are Beijing, Shanghai, and Tianjin. Chongqing is the newest of these municipalities, created in 1997 when three counties were split off from Sichuan province.

Lhasa
Sunday, May 29, 2005 - Thursday, June 2, 2005
Temperature high/low during our stay: 75/50. Bring your sunscreen, the sun is searing due to high altitude.
Population: 200,000
Tibet province population: 3 million

Lhasa Top Activities:
Potala Palace
Jokhang Temple
Barkhor Market
Deprung Monastery
Sera Monastery
Tibetan home visit

Commentary:

The Yangzi River runs through the industrial heartland of China just as the Great Lakes provided a focal point for American industrialization. The Three Gorges Dam represents the best and worst of China's controlled society. The massive project is a triumph of engineering prowess and state will, but at the cost of flooding dozens of ancient towns and historical sites, and requiring the relocation of over 1 million people, much of which has already occurred. Such a dam in such a populated area could never be built in the West--the lawsuits would drag on until the 22nd century.

The scenic Three Gorges that give the dam its name will not disappear once the dam is complete, as some accounts have misreported. Their beauty is reduced by the higher water levels, we have no doubt, but the peaks still tower hundreds of meters over the water. (It's hard for us to judge how much the gorges will have changed because most of the change has already occurred before our trip. The water level has already risen 135 of its eventual 175-meter increase. But there are still three distinct gorges and they will remain once the water rises another 40 meters. The peaks of Wu Gorge, for example, are 900 meters high.)

The dam's purpose is three-fold: 1) to control Yangzi flooding, which regularly causes significant damage and loss of life; 2) to allow for improved shipping access to China's interior; which should help 3) to promote economic development in the interior, which has lagged that of China's costal areas.

Visually, the Three Gorges Dam itself was less impressive than we expected. Shrouded in the ever-present mist/smog that blankets much of China, it's hard to see for one thing, and it certainly looks smaller than the Itaipu Dam (spelling?) between Brazil and Paraguay, for another. Having seen each, we'd bet that Itaipu is longer, but there is probably some legitimate statistic (e.g., vertical height or amount of water contained or something like that) allowing Three Gorges to legitimately claim the world's biggest dam title.

The clouds, rain, and mist reduces the visual beauty of the gorges as well. Probably this is as significant a factor as the higher water level in making the gorges themselves a bit of an anti-climax. The trip was interesting, but more for observing firsthand the impact of the dam project and for seeing the countryside than as a scenic cruise. Parts of the gorges were beautiful, but there were large areas in between that were not. The cruise may have been more interesting a few years ago before the water level rose to 135 meters. Then it would have been possible to see old villages still in use with the new, replacement villages built a few hundred meters higher on the hillside. Now, most of the old villages are already demolished (to prevent shipping obstacles) and flooded, with people resettled to the new villages. Several sites remain in use today that will be flooded in the future; however, not as many are viewable as would have been a few years ago.

Thoughts that the people would not agree to be resettled are countered by observation that most have already been. After the dislocations of the Great Leap Forward and the Cultural Revolution, being moved up the hillside to a new house and receiving some modest compensation for your old house may seem not all that bad to the Chinese.

So where do we come out on this project? Nick is probably 2/3 for it and 1/3 against, Deanna the opposite. Nick's reasoning is that the benefits of the dam are significant enough to outweigh the downside. And some of the downside (not all) has been exaggerated. While we can understand that anyone would hate to leave their home (not to mention seeing their home town destroyed!), we also think that some of the nostalgia for the old is diminished when you hear that the old homes largely did not have electricity or running water (which the new homes will). At least this is what we were told. Admittedly, we have some skepticism about the relocation after we heard the umpteenth tour guide tell us how happy the villagers are in their new homes. Clearly, all of the guides are reading from the same state-written tour manual. There's no way to know how much is true and how much is communist propaganda. But if it is true there was no running water, then sign us up for the relocation plan!

We say the some of the criticism is exaggerated because some of the more negative predictions have already been disproved as the dam nears completion. Projects requiring great engineering feats always have their naysayers, but more often than not, the will of those driving the project outlasts the critics. The critics usually have some good points, but often these are lost as the shrillness of their rhetoric causes everything they say to be discounted. One criticism that can never really be disproven and which no one wishes to see is that the dam will be unstable due to risk of earthquake. A dam collapse would put much of Yichang, population 4 million, under water. Interestingly, a Discover Channel program we viewed showed Americans and Westerners saying repeatedly that the dam cannot be built, and the Chinese saying that it can. While we recognize that there is no avenue for dissent in China, it was an interesting juxtaposition. A hundred years ago, many thought the Panama Canal could not be built, especially considering it had been tried and failed several times, lastly by the French. Theodore Roosevelt showed that America had the willpower to get it done. In this century, the Chinese appear to have the most willpower to create massive public works of infrastructure. Whatever your view, it is interesting to watch what they create.

Somewhere in the past year, we came across a Chinese saying, "If you don't get rid of the old, the new won't come." That sums up the Three Gorges Dam project.

And now, before we head to Tibet, an interlude, with three hints on how to pronounce Chinese words:

- "zh" is pronounced "j"
- "q" is pronounced "ch"
- "x" is pronounced "sh"

So Suzhou is pronounced as if it is "Sojou" or "Sue-joe" phonetically. Xian is pronounced as if it is "Shian" or "She-ahn" phonetically. The last dynasty was the Qing dynasty, pronounced "Ching."

Feeling Lousy in Lhasa

Here's a summary of our experience in Lhasa:

- The surrounding countryside is beautiful
- There is a place in China where the suns shines and the sky is blue!
- The religious sites are interesting to behold
- The above three factors combine to produce some excellent pictures, maybe the best since the glaciers of Argentina.
- You can see the main sites in two days. Since you need to rest the day you arrive due to high altitude, a three-day visit is sufficient, or take four days if you want some free time (say to update your internet site, for example).
- Because of the altitude, your body will feel not quite right the entire time you are there. This could be as mild as barely noticeable (e.g., shortness of breath after climbing stairs), or it could incapacitate you. Everyone is affected to some degree. "How bad do you feel?" replaces "Where are you from?" as a conversation starter.
- After four days, we are glad to have visited, and we are glad to be leaving.

Tibet reminded us of Bolivia. Each area is at high altitude, producing unlimited sunshine days with blinding brightness, but cold nights. Each is populated by a poor peasant class. Enough basic Western amenities exist to be comfortable, but don't expect a luxury experience--that's nowhere to be found (yet, it will come with time, to Tibet at least). And we felt lousy for parts of our stay in each place. This was not so much due to the altitude alone, but to having by coincidence caught a cold at our prior stop. Layering high altitude on top of a cold left us feeling run down much of the time we were in Bolivia and Tibet. It's not that we were laid up in bed unable to do things (although this does happen to many people), we just always felt kind of blah, without a lot of energy.

We never took Diomox for altitude sickness, as our symptoms seemed more cold related than altitude related, and we were already taking cold medicine. But as we experienced one sleepless night after another, we began to think that maybe we should have take Diomox upon arrival. Unlike Bolivia, where we were at an even higher altitude than Lhasa, we did not really feel better as time passed. So our advice would be to take Diomox or a similar medication, even though we did not. It will probably help.

Is this just a bunch of whining? After all, you may be saying, you've never experienced altitude effects. Why you've even been to the mile-high city, Denver, Colorado! Sorry, Denver is the minor leagues. A mile is 5,280 feet. Lhasa is 3700 meters high, or over 12,000 feet. In some places in Bolivia, we were at 4100 meters, or around 13,500 feet. You will feel something, maybe just a headache, maybe you will just notice your heart racing, but you will feel it. Our symptoms included (and this excludes the cold related symptoms): headaches, dry mouth, bloody noses, sleeplessness, body aches, and fatigue. And from listening to others, we figure that we fared no worse than the average person did, and perhaps better!

While we enjoyed Lhasa, it affirmed for us our decision not to visit Nepal and Bhutan. (Pause for collective groan to emanate from the more adventuresome travelers reading this.) Although they are printed on our trip card, we first decided a couple months ago to cross these two countries off the list when a palace coup occurred in Nepal. We've met travelers recently who have said it's not that bad politically, and that's probably true, but our reasons are as much to do with focusing more on what we enjoy. The political issues in Nepal were just the final reason to bail on those two countries. Frankly, we enjoy civilization more than primitiveness. We are glad we went to Bolivia and Tibet. But that's enough high altitude, basic conditions for us. The combination of those two factors limit your enjoyment of the place while you are there. So we are going to spend an extra 7-10 days in Europe, where there is so much we have not seen, rather than go to Nepal and Bhutan and possibly feel bad much of the time we are there. It's not the macho traveler thing to do, but it's what we prefer.

Send feedback • Permalink

02:50:11 am China, Week 2  

Itinerary:
Private car from Yangshuo to Guilin, 75 minutes
Air China flight from Guilin to Shanghai Hongqiao Airport
Three nights staying with our friends, John Krotzer and Tania Romanoff in Shanghai
Train from Shanghai to Hangzhou, three hours scheduled, four hours with delays
One night at Best Western Hangzhou. Many ordinary US hotel brands such as Holiday Inn and Best Western are much nicer out of the US. This Best Western was a five-star property, in contrast to its two-star character in the US (although five stars is generous, it would probably rate only four stars in the US).
Train from Hangzhou to Suzhou via Shanghai, four hours. This was a one-star train. We missed our original train, having showed up at the wrong station in Hangzhou. We knew there were two stations, but either the concierge did not write the correct station name, or the cab driver did not read it correctly. We missed our train by 15 minutes. Fortunately, there are two trains from Hangzhou to Suzhou within an hour of each other at 8PM on a Sunday night and we arrived at the correct station in time to catch the second one. Our next obstacle was to communicate this to the Chinese attendants. English is not in abundance at Chinese train stations, in contrast to many other public places. Of further good fortune was that that the Chinese ticket taker was good at charades, and helped us with the otherwise impossible task of exchanging our ticket for a new ticket. We were even escorted to the signalman's booth to wait for the train, away from the surging masses of non-queuing Chinese (see below). This treatment caused Deanna to dream of the luxurious VIP car we would be traveling in on our way to Suzhou. Think again. This train, unlike the one we booked originally, had no reserved seats and had far more passengers than seats. We had no complaints, not even when a fourth person sat down in Nick's three-seat row. We certainly were a novelty item on this train. There are a couple low light, out-of-focus pictures of this adventure in the image gallery.
One night at Bamboo Grove Hotel in Suzhou
Train from Suzhou to Shanghai, one hour
Two nights staying with our friends, John Krotzer and Tania Romanoff in Shanghai

Location Background:

Shanghai
Wednesday, May 18, 2005 - Saturday, May 21, 2005
Monday, May 23, 2005 - Wednesday, May 25, 2005
Temperature high/low during our stay: 75/60
Population: 13 million
Shanghai is the commercial center of China. It was the New York City of Asia in 1920s and 1930s, prior to Japanese occupation and then communist control. It is regaining its former glory and we think it will again become the most important city in Asia. But give it a few decades to do so.

Top Activities, Shanghai:
Shanghai is pedestrian-accessible world-class city like London, New York, Chicago, and others. So you could spend all day for several days, just wandering around, without an overly prescribed itinerary. You'll constantly encounter unexpected things of interest. Below are things we did, which will take about four full days. Most of these sites can be viewed in our image gallery. Our best advice is just to buy the Lonely Planet Guide and do whatever interests you.

View of city from Jin Mao Tower (or alternatively the Pearl of the Orient--its like Chicago, some people prefer Sears Tower, while others prefer the John Hancock Building. Pick one, it doesn't really matter which, or do both if you want.)
Walk along the Bund
Pearl River Cruise, one hour
Walk along Nanjing Road (shopping, pedestrian mall)
Shanghai Urban Planning Exhibition Gallery, a newish, six-story building devoted entirely to planning Shanghai's future. Impressive.
Shanghai Museum
Walk through French Concession (colonial architecture, sidewalk cafes, shopping), especially Xintiandi
Site of 1st National Congress of the Chinese Communist Party. This museum is located in Xintiandi, and is now surrounded by upscale shopping, restaurants, and high-rise condos. Times have changed. As we left Shanghai, the TVs in the airport were tuned to a fashion show, with models parading down the runway to the tune of Winds of Change by the Scorpions (a song about the collapse of communism).
Yuyuan Gardens
Chinese acrobats show at Shanghai Center. A cross between Cirque du Soliel and a Las Vegas magic show. Very good.
High-speed train to Pudong airport. As much a demonstration project as it is practical transportation, the train reaches about 280 miles per hour during its 8-minute ride from next-to-last subway stop to the airport.

Hangzhou
Saturday, May 21, 2005 - Sunday, May 22, 2005
Temperature high/low during our stay: 80/65
Population: 6 million
Hangzhou is situated around the scenic West Lake (see image gallery), making it a favorite local tourist destination. It is an old city, and like numerous old cities in the old country of China, it was once a capital city. The Southern Song dynasty was established here in the 12th century. Marco Polo described Hangzhou as one of the most splendid cities in the world in the 13th century. We would not go that far, but it is a fine place to spend a day or two if you have extra time while you are in Shanghai.

Top Activities, Hangzhou:
Most things are centered around West Lake, so stay within walking distance and just meander around. Take a boat trip to the numerous islands in the lake. See image gallery. On History Street, there are two museums, the Hangzhou History Museum and the Museum of Taxation and Finance. Sadly, for Nick at least, the latter museum, with its gleaming new building, was not yet open. He was looking forward to its Marginal Rates throughout the Ming Dynasty exhibit.

Suzhou
Sunday, May 22, 2005 - Monday, May 23, 2005
Temperature high/low during our stay: 80/65
Population: 5 million
Suzhou is called Garden City, Venice of the East due to its canal system and numerous rock-and-water (not flower) gardens. Its history dates back 2500 years, with its peak period of relative importance roughly between the 12th and the 16th centuries, due to its location on the Grand Canal and its concentration of silk production. While Marco Polo preferred Hangzhou to Suzhou, we would give the opposite recommendation, if for no reason other than Suzhou is two hours closer to Shanghai, making it possible to visit its highlights in a day trip. And while everyone should have a China train experience, the one-hour version from Shanghai to Suzhou is authentic enough; you don't need the full three-hour version from Shanghai to Hangzhou to get the picture. Still, if you have the time, it's worthwhile to visit both cities.

The Grand Canal is the world's longest canal, at one time 1100 miles long, connecting Hangzhou with Beijing, and linking the Yangzi and the Yellow Rivers. Conceptualized, built, and rebuilt over two millennia from 500 BC to 1400 AD, today, it is largely unused except for pleasure craft as its small size makes it commercially unviable. In that regard, it is no different from canals built in the 19th century in the US, which largely exist for recreational purposes today. Regardless of the century, though, as we have said many times in our posts, commercial trade flows--whether they are by foot, boat, train, truck, plane, or internet, determine the economic fortunes of cities, countries, and regions. The historical significance of the Grand Canal to Hangzhou and Suzhou is just one more example of this on an endless list we have encountered during our travels.

Top Activities, Suzhou:
There are numerous gardens and other things to see, but if you do these four things, you will have a good feel for the place: 1) 80-minute boat ride around the canals, 2) the Humble Administrator's Garden, 3) the Garden of the Master of the Nets (smaller, about 1/10 the size of Humble Administrator's), and 4) West Garden Temple. Skip the temple if you have to cut one activity out.

Commentary:

Nick's first trip to China one year ago was like a first date that went really well. He began the trip with a mixture of swirling emotions--anticipation, excitement, uncertainty, nervousness. He had read a lot about China, and was hopeful of having a good experience, but having never met her, he did not know what she would be like in person. So the date began with his guard up, and his expectations balanced, knowing that things could go well, but might go badly. By the end of the date, he was blown away, and immediately desired a second date. On this trip, the second date, he began with his guard down, and his expectations unrealistically high. Naturally, China has disappointed him a bit this time, as she revealed her idiosyncratic personality traits, one by one. The traits did not develop between dates one and two--they have always existed, but were hidden or overlooked on the first date.

Deanna, being a better judge of character, immediately identified China's flaws. Overall, though, she liked China, but was not yet ready to commit to a second date herself. She had to see if China lived up to his promise to call her in a few days.

China remains everything Nick thought it was one year ago. It is probably the most dynamic spot on earth right now, experiencing rates of economic growth perhaps higher than ever seen before in modern times. If that's not your bag, then it also has a history and culture as old as any country around. And if that doesn't do it for you, then it offers plenty of shopping at every price point imaginable, from really cheap to very expensive. So it has something for about everyone who still has a pulse.

Not being literate in Chinese, we cannot read local books instructing Chinese about interacting in Western cultures. If they are honest and direct, which they may not be, early paragraphs of such a book might read something like the following:

Westerners are overly sensitive and critical of our common public behavior, and actually consider some of our most natural acts to be offensive! Thus, for the sake of integrating into Western society, you must curtail some normal practices, even though the alternative may seem highly inefficient and even silly to you.

One of the more bizarre Western customs involves a concept known as "lining up" or "queuing." In this ritual, people arriving first have a belief that their early arrival entitles them to be the first to proceed, without further effort or struggle. Chinese arriving late, elbowing, and shoving their way to the front in an efficient manner may actually be criticized. Some aggressive Westerners may have the nerve to confront the efficient Chinese queue-jumper in a verbal or physical manner, without having the courtesy to offer the Chinese a face-saving way out of this simple misunderstanding. The rude Westerner could actually insist that the Chinese move to the end of the line! No matter how barbaric this seems to us civilized Chinese, this is how Western society operates. It is a wonder that they ever get anywhere!

It is important to remember that Western culture is not as old as our own, and thus is less evolved than our own. Thus, Westerners do not practice the following Chinese customs, and may even find them offensive (we are not kidding!):

- Loud clearing of the throat and spitting. You are actually expected to excuse yourself from the room and perform this natural act in private! How inefficient and unhealthy! This also applies to farting.
- Efficiently answering your mobile phone in a movie theater so that you miss neither the movie, nor the phone call. Westerners are not as proficient at multi-tasking as we Chinese are and they have trouble distinguishing between multiple simultaneous conversations. When in their country, we must be considerate of their mental and physical handicaps, and--as crazy as this sounds--miss a portion of the movie when our phone rings. Ridiculous, but necessary. Be sure to turn your phone's ring volume to loud, though, so that you will hear the incoming call over the movie volume.
- Public urination. Not only do Western adults not urinate in public, but also they actually expect that children in potty training not defecate in public either! How uptight and silly these people are! But when in their country, you should try to adopt their silly practices. You will experience a profound sense of superiority when you do so.
- Price negotiation. Westerners naively believe that a fixed price is just that. They foolishly pay the price printed on a prepackaged item without ever bargaining. But it is even worse than you think. Not only are Western consumers dumb on this point, Western retail clerks are so lazy and stupid that they lack the initiative to haggle with you. They refuse to sell you an item for a just-for-you special price, insisting that even Chinese pay the printed price. Maddening, but true. We do not know how their society functions with everyone paying the same price for basic consumer goods, but somehow it does.

In prior posts, we have lauded the British for being relatively more advanced colonizers and Singapore for being the most efficient city we know. On this trip to China, our admiration for British civility and Singapore efficiency advanced further. One of the British's most amazing and lasting accomplishments is that they taught Singaporeans, who are mostly ethnic Chinese, how to queue properly. As a trip to any Chinese train station will demonstrate, this skill is not innate in the Chinese character. And to Singapore's credit, their queuing discipline remains strong, over 40 years after colonial rule ended. Similar miracles of lining up are also on display most days in Hong Kong.

Think we exaggerate? The Lonely Planet China guidebook devotes a sidebar to queuing in China, calling it the worst part of visiting China.

In Shanghai, we stayed above the fray for the most part by lodging with our friends, John Krotzer and Tania Romanoff, and their three children, Agnieszka, Molina, and Dominik, ages 6 (in June), 4, and 2, respectively. They live in a four-bedroom house in an expatriate area near Hongqiao, the domestic airport in Shanghai. They moved from the US in January, as John now heads his company's Shanghai office. The compound, as they call it, where they live consists of villas housing foreign businesspeople and their families from all over the world. It is an oasis of Westernization in the middle of controlled chaos. Inside the compound, their kids can ride their bikes two blocks to the community center to board the bus for the international school. Outside the compound, it's a short walk to a Western grocery store, selling imported European and American products. But watch out--that red stoplight does not mean that drivers consider it necessary to stop, or even slow down.

Just as it was when Nick lived in the Philippines, it's pointless to drive yourself. The downside far outweighs the upside. Besides, a rented car comes with a free driver. So, they (and we while we were there) have a driver on call at all times.

So while in Shanghai, we enjoyed local food products: Raspberry Snapple, Papa John's pizza delivered to your door, bagels for breakfast, and Lean Cuisine for lunch. The latter cost about US$6 per entrée due to the cost of importing and we were quite happy to pay it.

We really appreciate being able to stay with friends during our trip. It does save us money, which is nice, but more importantly it provides a more-normal environment and someone new to talk to for a few days. It's a bit like being back at home, without having to interrupt the trip. So we thank the Krotzer-Romanoff Family in Shanghai and Simone Hilton and Bob Pritchard, the Strongs, and the Macks, all in Australia for providing us a home during our year away from home.

Send feedback • Permalink