China’s Dangerous Housing Bubble: Lianjia’s Bold Efforts to Support Price Momentum

China’s housing market may be in a bubble, especially in top-tier cities like Shanghai, for that markets seems to share some of the same excesses that the United States had in its real estate shortly before the subprime mortgage crash in 2007. Here in China, we have a flood of newly created cheap capital flowing into the market at low interest rates for easy loans. We find unusual business models popping up to exploit the cheap credit and drive up housing prices and demand. What is happening is not sustainable and represents a huge misallocation of capital. The problem could get much worse, as it has in the United States, through vigorous government “help.”

Easy credit from the banks of China and China’s equivalent of “quantitative easing” have been used to stimulate the markets, just as was done with little success in the U.S., Japan, the European Union and Zimbabwe (before their cataclysmic crash with hyperinflation and economic chaos). Initially much of the new money being created was being used to drive the Chinese stock market. As that bubble popped, wealthy Chinese looked again to real estate as the traditional safe way to make lots of money. In popular cities, home prices have shot up. In Shenzhen, housing prices show a 57% increase over last year. That’s an insane rate showing something is wrong.

Owners of apartments until recently were not too concerned about rental rates since they real money were making was coming from rapidly appreciating property values in cities like Shanghai. But with fear that recent rises were no longer going to be sustainable, rental prices are now getting more emphasis. This appears to be driven in part by the very large-scale actions of a giant force, the real estate company Lianjia (United Homes), according to a friend of ours who is a real estate agent. Lianjia is a respected heavyweight in the market. It has somehow managed to obtained huge capital reserves that it has used to buy up many former competitors, giving them a stranglehold on the real estate business, at least in terms of the agencies and agents that buyers, renters, and sellers use for transactions of homes and individual rental units. According to our friend, they are also using large amounts of capital to make loans to customers who otherwise might not be able to afford the down payment of a new property. Further, they are actively working with property owners to push for significantly higher rental values. This increases their commissions and also make landlords happy. I am not saying this is unethical, just that it is bold and seems to require easy capital to keep the momentum going.

In spite of a slowing economy in China, many renters are reporting significant jumps in rent this year, at least here in Shanghai. Our landlord, for example, wanted to increase our rent by 33%. Since we take good care of the place and don’t make many demands, though negotiation, she was willing to sacrifice to help us by just asking for a 24% raise in rent instead. But she has agents from Lianjia calling her and saying she could be getting 33% or even 40% more. This seems to be happening all over the city.

In looking for new, more affordable apartments, my wife found that when she went to the nearby Lianjia office and asked for places with a price similar to what we have been paying the past year, they said it wasn’t possible and that we would have to pay a lot more to get a place with the features we now have. When we went to one of the increasingly hard-to-find non-Lianjia dealers, we learned that there certainly were places in our price range that could meet our needs. While my wife and a non-Lianjia agent were looking at one apartment priced at 14,000 RMB, a Lianjia agent came to the same place with a Chinese girl who was looking to rent. She liked the place and asked how much it was. My wife heard the Lianjia agent say it was listed at 18,000, a full 4,000 RMB above the actual asking price. The girl was shocked and wondered how it could be so expensive. She turned to the agent my wife was with and asked what price he had been told. Not wanting to make another agent lose face, our agents just nodded his head and said it was 18,000. But this apparently was Lianjia’s attempt to drive up the price, deceiving a customer. Ugly. That may be a rare exception, but our non-Lianjia realtor also confirmed that Lianjia is aggressively talking up the prices. Landlords seem eager to listen to this talk. But this bubble is unsustainable.

By offering easy loans to customers who might not otherwise be able to get one, and by collaborating with landlords to drive prices up, the rental market in Shanghai has been booming at a crazy pace, the kind of pace that looks like a classic bubble. The housing bubble is already popping in Hong Kong, with a significant drop now in housing prices since the Sept. 2015 peak, said to currently be in “free fall.” That cold front may soon sweep northward to cities like Shanghai.

In bubble economies, it’s hard to tell precisely when the insanity will stop. With abundant injections of cash and other policy actions, the government could keep driving up prices for a while, but eventually (what, two more months? maybe six? a year?) economic reality has to kick in, and when it does, it can be painful and sudden. The bigger the steps taken to keep the bubble going, the worse the pain will be and the longer the correction will take.

When cheap mortgages to unqualified buyers begin to fail and threaten the banks, we could be in for a repeat of the subprime mortgage crisis the US faced a few years ago. When property owners begin to see that real estate values can drop significantly, they may look to the ultimate way of preserving capital in risky times: precious metals, particularly gold and silver. A dramatic pop of any kind in China could send shock waves throughout the world.

What to do? Be prepared for trouble. Get out of debt. Have cash on hand to keep you going for two or three months in case there is a run on the banks (the available currency in the US is a tiny fraction of the vast amount of digital money that has been created, and if banks fail or are hacked, turning those digits into something you can spend may be a challenge that faces many delays, not to mention massive threats of hacking). Physical cash on hand may be an important part of your survival kit. Food and other supplies, and some gold and silver coins or bullion, may be a good idea.

By | May 15th, 2016|Categories: China|0 Comments

Passport Tip: Keep Photocopies, Carry a Copy, and Have Photo on Your Phone

There are many times in China when you’ll need your passport. For travel and bank transactions, you generally need the physical passport (sometimes even train travel requires that, though it’s hard to predict when there will be a passport check to get into the train station). But for buying train tickets and a variety of other situations, a photocopy or cell phone image of your passport is fine. I recommend that you always have an image of your passport with you in your wallet or purse, plus have an image on your phone. I also suggest that in addition to an image of your main passport page, you also have an image of your current visa.

Don’t allow hotels to keep your passport. Some want to hold them at the front desk, but this puts you at risk. One person I know had their passport stolen that way. Leave them with a photocopy if they need something from you, but don’t give up your passport.

By | April 27th, 2016|Categories: China, Safety, Surviving, Travel tips|Tags: |Comments Off on Passport Tip: Keep Photocopies, Carry a Copy, and Have Photo on Your Phone

One Nutritional Supplement You Probably Need in China: Vitamin D3

The medical literature tends to suggest that people waste a lot of money on the vitamins and other nutritional supplements they buy. But here in China, there is a vitamin that I think you may need: D3. Vitamin D3 is normally created in our skin by sunlight, but sunlight is sadly lacking in typical Chinese cities because of the air pollution. Even when there is sunlight, there is not much UV light getting through the haze. In the US, people also get some Vitamin D in dairy products since it is routinely added to milk, but I haven’t seen evidence of that being standard in China and dairy products tend to be a much smaller part of one’s diet here.

Lots of people here have lingering colds and coughs. In a couple of cases I know, giving the sufferers regular vitamin D3 helped them get back to normal. D3 is said to play a role in strengthening the immune system and other systems. It’s something we really need in China. You can buy it here, but it’s much more expensive than in the U.S., so I recommend that if you are coming to China for a long time, bring a good supply of Vitamin D3 with you and stay healthy.

By | January 11th, 2016|Categories: China, Health|Tags: , , , , , |Comments Off on One Nutritional Supplement You Probably Need in China: Vitamin D3

Where to Find Cheese in Shanghai: 2015 Update

2015 Update: The previously recommended wholesale market on 1255 Linahua Road that I recommended back in 2012 has been closed, and the key stores selling cheese have moved to a new location north of the airport at 333 Zhangye Road, south of Cao An Gong Lu (Cao An Highway).


One of the great mysteries of expat life in Shanghai is where to find cheese. Some expats rely on expensive cheese sold in small delis in the French Concession or places like the deli at the Westin Hotel/Bund Center. Some rely on cheese sold at supermarkets such as Tesco, Metro, Carrefour, or City Shop. But if you use a lot of cheese or just want the best price on cheese, you should know about the food warehouse in Jiading District Minhang District which supplies cheese and a lot of other products to restaurants all over town. There you can buy cheese for prices surprisingly close to what you might pay in the United States. A 3 kilogram block of good Gouda cheese was purchased yesterday by my wife for 165 RMB. That’s under $4 a pound for cheese in Shanghai. Awesome! You can also get similar blocks of mozzarella, Emmenthaler (Swiss), or cheddar. We love the rich, full flavor of the Gouda cheese, though.

The address is 333 Zhangye Road (张掖路), south of Cao An Gong Lu (Cao An Highway,曹安公路), north of the airport. From Hongqiao the cab fare is about 50 RMB. The shop we like is Xinzhiwang (鑫之旺). Phone: 61277793.

333 Zhangye Road: This is the place for inexpensive cheese!

Sunline (Xinzhiwang) at 333 Zhangye Road: This is the place for inexpensive cheese!

 

Big blocks of cheese in this cooler.

Big blocks of cheese in this cooler.

Cream, cheese, and other great products in the cooler.

Cream, cheese, and other great products in the cooler.

Some of the other import stores and dry goods stores inside the complex.

Some of the other import stores and dry goods stores inside the complex.

More cheese at Sunline.

More cheese at Sunline.

Sunline's business card.

Sunline’s business card.

View of the complex from the street.

View of the complex from the street.

This mecca of affordable cheese is inside a big warehouse at 1255 Lianhua Road, Shanghai. You enter this warehouse along a road used by forklifts or other vehicles. On the second lane to the left inside, you will find a row of shops. One of the first is SunPin Ran’s outlet, Shanghai Topwin Foods Trading Company (www.TSFoods.com.cn). Email contact: hero.db at 163dotcom, or call 021-5480-2293. Fax: 021-54934329.

By | October 11th, 2015|Categories: Food, Restaurants|Comments Off on Where to Find Cheese in Shanghai: 2015 Update

Travel Tips for Thailand

Just returned from my second trip to Thailand. The first was in Bangkok. This time we went further south, flying to Phuket, then taking a ferry to Phi Phi Island (Kho Phi Phi), another ferry to Krabi Town, and then flying to Chiang Mai.

Thailand is one of the easiest places in Asia for Westerners to visit and enjoy. It’s generally safe, both in terms of personal security and the safety of the food. It’s also convenient, for the most part, for most important signs include English and many people speak English, so hotels, restaurants, and shops are easy to use. Many cabbies also speak some English.

While theft is low and the people are usually honest and kind, there are some risks. On Phi Phi Island, a man from Brazil we met explained that shortly after he used an ATM machine at a  bank on the island (one of the numerous yellow ATM machines associated with Krungthi Bank), his account had several thousand dollars stolen from it. The ATM appeared to be secure and did not have bogus scanners or cameras attached to it to steal his card information. After discussing his case with his bank card company, he concluded that someone at the Thai bank must have helped make this theft possible. He went to talk to the local bank and of course, they denied any knowledge or complicity. One day he might get his money back, perhaps, but he was relying on that account to pay for the remainder of his trip. Fortunately, he had brought along enough cash to get by and would be OK, but the prospect of having an account cleared out by a local thief working in or with a bank made me unwilling to risk using an ATM card in Thailand.

My tip: avoid the risk of ATM fraud by bringing enough cash for your trip. I had brought along some hundred dollar bills from the US, and before coming my wife had converted Chinese RMB into Thai Baht at a bank in Shanghai. We budgeted our last couple of days very carefully so the money we had converted turned out to be just enough (OK, I skimped on our last meal and wished I had had another 100 Baht or so), avoiding the need to use an ATM machine or to use any credit cards in Thailand. (To be fair, I also avoid using credit cards in China, and am constantly on the alert for ATM risks, though I do use ATM machines in China frequently.)

In Bangkok, taxis are a pain because they want to charge foreigners very high rates and don’t want to use the meters. Have a Thai friend help or at least know what a reasonable fare should be for your destination so you can negotiate from a position of knowledge and walk away when the rate is way too high.

In Chiang Mai, there are metered cabs at the airport, but they are rarely seen on the streets. Instead there are abundant tuk-tuks (motorcyle-powered vehicles with three wheels that seat two people) and red trucks (small covered pick-up trucks with seats in the back that can hold up to about 10 people). Fares are negotiated but are usually quite inexpensive (maybe 80 Baht to get across town, 20 or so Baht for a few blocks). You can rent one of the red trucks for a private trip to a destination like Doi Suthep. For long trips or any trip where you care about comfort, safety, and the ability to see where you are going, rent a private driver in a nice car (typically a minivan). A day of driving in the off-season will cost around 1000 Baht (about US$27).

Both of our trips have been in the fall (September/October), which is a great time to visit Thailand. Not too hot, not too crowded, though it is the rainy season so be prepared for several days of rain. For us, that was OK. It was still sunny when we really needed sun and fine otherwise, though some views were less than ideal. But we here that in the peak seasons, the popular beaches and other attractions can be both unpleasantly hot and overcrowded. Not for us.

Electricity is fairly easy to manage. US plugs, both two- and three-pronged, will fit into the standard outlets here, which are around 220 V. No problem for typical electronics. I’ve read that sometimes outlets aren’t well grounded, so be careful, but we had no trouble in the places we stayed.

In spite of the beauty of Thailand, many places can be a little run down. Watch your step: sidewalks may have unexpected holes or other dangers. Walkways may be missing boards or have dangerous openings or unstable sections. Watch your head also: there are plenty of poles and other objects waiting to gouge your head if you aren’t careful, especially if you are tall.

It’s a beautiful country and a great place to relax, enjoy the scenery, enjoy adventures like elephant riding, diving, and white water rafting, and enjoy wonderful food. As for food, Khao Soy, a Chiang Mai specialty, something like a coconut-based curry with noodles and fried noodles on top, was one of our favorites, along with Massaman curry and Panang Curry. We also loved the fresh fruit drinks and smoothies.

 

By | October 5th, 2015|Categories: China|Tags: , , , , , |Comments Off on Travel Tips for Thailand

Joyous Living in China (and Perhaps Other International Settings)

Having shared a variety of my experiences here in China on the pages of my Shake Well blog, I hope some of you will be more willing to come here when the opportunity comes. I thought coming here would be a sacrifice, but it has been a blessing and joy beyond all my expectations. After four years, hardly a day goes by without me expressing wonder and gratitude at the privilege of being here. My love for China has only grown, in spite of the various challenges that Westerners may face here. I deal with some of the challenges and the more daunting aspects on the Surviving China section of my website, where I discuss some issues like the occasional scams to avoid, the problems with the Internet, dealing with food safety, etc. Lots of places will give you advice on those topics, and it’s important to understand them to stay out of trouble and survive here.

Beyond mere survival, though, comes a more important factor: joyous living. For many foreigners who find China an endless frustration and can’t wait to get back home, the joyous living part may seem remote. I’ll admit that sometimes foreigners end up in situations that are difficult and painful. But I’ve seen foreigners living in remote, difficult locations on shoestring budgets finding the same excitement and happiness that I’ve experienced in Shanghai, where my circumstances are favorable in many ways, and I’ve seen foreigners with much better settings who find the place intolerable. I’ve learned some valuable lessons from those who seem to living on more than their fair share of joy here, and I’d like to share what I’ve learned.

If you approach China in the right way, I feel you can make your in China one of the most enjoyable and rewarding times of your life. (This probably applies to many places, but there are some uniquely wonderful things about China.) China offers a richness of culture, scenery, history, language, and food that can make life here better than what you might experience anywhere else, but it takes preparation, work, and some mental adjustments to discover the richness that is here. You may also find Shanghai in particular to be one of the safest, most convenient and most delightful places on earth, IF you are flexible, overlook some gaps, and enjoy the strengths and beauty of the city.

It Begins with the People

Finding happiness in China, in my opinion , begins with the people. In spite of my various warnings about scams and other dangers that I give elsewhere, you need to understand that the Chinese people in general are kind, honest, friendly, and very kind to foreigners. There are times when you might cause problems and cross over hidden boundaries when it won’t seem that way, but you’ll soon learn how to avoid those situations and how to act properly for Chinese culture.

The key to finding joy in China, in my opinion, is learning to respect and love the people. Once you discover who they are and what they have to offer, it can change your life and your attitudes. To begin, you need to get out of your expat shell and make friends with the locals and learn about their lives. There are many ways to do this, such as:

  1. Hire a Chinese teacher to come into your home at least once a week and teach you Chinese while also discussing Chinese culture, current events, etc. A good teacher can help you understand the vast culture behind the words and better look into the heart of China.
  2. Invite your neighbors and other Chinese acquaintances into your home for dinner. This can lead to lasting friendships and great exchanges of information. Some of our lasting friendships arose by apparent chance after talking to a stranger on the street or chatting with someone on a train. Talk to people, make friends, and follow up.
  3. If you have guards (“menwei”) at your apartment complex, smile at them, wave, and occasionally bring them treats, especially Western goodies that you make or bring to China. A plate of cookies for them to share with each other can earn you a lot of “brownie points” and help you make friends. If you can afford it, I also strongly recommend giving “hong bao” (red envelopes with some cash) to all your menwei right before the Chinese New Year holiday. Once you understand how little they make, you’ll be grateful for the opportunity to give them a bonus. That kindness will often be more than reciprocated by the help they can give you. For example, once my wife left her suitcase in the back of a taxi. The menwei at our complex spent an hour or so reviewing security camera video footage to track down the cab and then recognized and called the cabbie, and we had it back that day—in time for a flight that night. They could have just said, “Too bad!”
  4. Treat your ayi (maid) well, if you have one (this also applies to a driver or others who might be hired to help you). One of the benefits of living in China is that help in the home is very inexpensive. Actually, it’s often too inexpensive. While you may hire an ayi at a fair market price, take care of her with occasional tips, be sure to give an extra month of salary in February as part of the traditional employer obligations to employees at New Year festival (you can pro-rate this if they have been working for you for less than a year), offer to pay her transportation costs to get to your place, and pay her even when you’re away and she doesn’t need to come to work (giving her vacation, in essence). A happy ayi who trusts you and respects you can spare you from a variety of problems and will be motivated to go out of her way to help you.
  5. While tipping is not required, I suggest doing it when you can. Cabbies will always appreciate it. Once you learn how little they earn for working so hard, and what a small portion of each fair actually goes to them, you’ll realize that a small tip makes a big difference. When they are friendly and helpful, why not give an extra tip and make them really happy?
  6. Don’t just shop at expensive expat stores like Carrefour. You will get some of the healthiest, freshest, and tastiest produce, eggs, and even meat at local wet markets. There you can become a regular and make friends with vendors, and experience an important part of Chinese life: the market. Chinese markets are wonderful, but often missed by foreigners.
  7. What about annoying people pushy salesman who approach you on the street selling questionable products? Perhaps they are scammers or crooks, but there’s a good chance they are real people with real needs. They get rejection all day long. Instead of brushing off the salesmen, be polite, smile, and say “Thank you.”
    BACKGROUND: A friend of mine asked a wise Chinese man for a powerful Chinese “zinger” to put annoying salesmen in their place and get rid of them. “What can I say to verbally shove them away?” was his question. The highly educated Chinese man thought for a moment and said, “Try this phrase: Xiexie.” My friend was surprised: “Wait, that just means thank you!” “Yes,” said the Chinese man, “and it’s the right thing to say. Those pushy salesman are just people trying to make a living, and deserve as much respect as you or I, even if we don’t want their goods. So don’t try to make them feel bad. Just be respectful and say ‘Thank you’ or ‘No thanks.’” My friend told me he felt humbled by this and saw those annoying people on East Nanjing and elsewhere in a new light.
  8. What about beggars? There’s a chance that they are scammers, but there’s also a good chance that they are real people in difficult situations. Carry a few coins or small bills reserved for the occasional beggar you meet. Treat them with courtesy. Look them in the eye, smile, and give them something. There may be times when you’ll sense something is wrong and you may just wish to move on, but in general, you won’t regret giving. You may even find some regulars you really like.
    Tip: When giving, don’t expose your wallet or purse to potential pickpockets. They are rare, but at Yu Garden a friend of mine had her wallet and passport stolen by a group of migrant kids while she opened up her purse to give some money to a beggar. (The empty wallet and passport was found shortly after by a Chinese man, a worker from the north, who spent 3 hours tracking down the owner to return it. Since the wallet had my wife’s card in it, he called my wife to report the wallet he had found, and waited until we could meet him to retrieve it—one of the many honest and kind people we have met in China.) Have your change in an easy-to-access place.
  9. Don’t let language barriers stop you from connecting. Get out and meet your neighbors. Find a translator if you need to, but introduce yourself and find out who your neighbors are. They may not be interested, but a consistent smile will eventually work wonders. Also try to be sensitive to things you may do that annoy neighbors, and get feedback from others on how to be a good neighbor. Meanwhile, keep your expectations from others low and don’t assume that others are being deliberately annoying when they are making too much noise or doing other things that bother you.
  10. Be patient in lines, while defending your position when you need to. When people cut in front of you, they may not have realized that you were really in line. After all, why was there a 12-inch space in front of you if you mean to be in line? Be patient and forgiving. You can indicate that you are in a line and ask them to get in line (paidui)—but do it with patience and a smile. (I know, this is easy for me to say, and admittedly often hard to do.) They probably didn’t understand. That’s the kind assumption, anyway, and a good way to think about the frustrations you might experience that come from the culture gaps you face.
  11. Be aware of the people around you and look for opportunities to help. If you are healthy and strong, a seemingly frail or elderly person carrying a heavy suitcase up or down stairs can be a great opportunity to help. A mother struggling to get her baby’s stroller down the stairs is another opportunity. Keep your eyes open for opportunities to go occasional good, and be ready to back off with a smile if they refuse help. But being considerate of the Chinese people helps compensate for the numbing effect of living in crowds and helps you feel more part of the community that is China.

In general, go out of your way to be friendly and respectful to people, though sometimes you’ll need to be firm and insistent. The times you slip and lose your patience will be times of regret. There are things that happen that will try your patience and yes, it may be easy to become angry and frustrated.

The times you do things that help others and the times you overlook the things that annoy are the times when you will most quickly appreciate who the Chinese people really are. The more you can see the good in these very different but very similar neighbors, the more you will connect with China and find happiness and excitement living here. But do take steps to avoid some of the problems that can leave you feeling angry and frustrated.

One opportunity to serve comes through various charities. My employer runs one of the China’s biggest private charitable trusts, the Huang Yi Cong Foundation, which provides help to needy school children in Gansu Province and supports other charitable efforts in China. Many of my colleagues donate a small part of their monthly income to the Foundation, which helps them become connected with the child or children they are helping. They receive occasional letters and photos that help them better understand the difficult life of the poor in China and give them opportunities to make a lasting difference. There are other organizations, of course, providing opportunities to make a difference, but I’m proud of the good people running the Huang Yi Cong Foundation and their passionate care for the needy families they serve.

In addition to building connections with the people, you’ll love your China experience more if you experience Chinese culture. There are many ways to do this. Go to museums, parks, community events, etc. Walk through neighborhoods and watch the dancing, game playing, calligraphy, tai qi, etc. Parks in the morning are great places to visit, and the Bund between 6 am and 7 am is another example, as you witness kite flyers and others at their best. Get involved in community events like special interest groups, classes, musical productions, dance groups, etc., especially those that reflect Chinese culture. There are numerous opportunities here and many friendships and mind-expanding opportunities here.

Again, don’t live in an expat shell. Get out and experience China and its culture. That includes the food. Please don’t just eat Western food. Learn about the many varieties of sophisticated Chinese food and experience many parts of China through its cuisine. Also learn about Chinese history, watch some Chinese movies, and continue learning the language and the culture as much as you can. You’ll find China to be a never-ending puzzle and mystery that rewards you deeply for each layer you unravel.

I hope you will experience life in China one day. May your experience here be exhilarating!

By | September 17th, 2015|Categories: China, Shanghai, Society, Surviving, Travel tips|Comments Off on Joyous Living in China (and Perhaps Other International Settings)

The Paper Industry International Hall of Fame to Recognize China’s Answer to Gutenberg, Wang Zhen

On October 15, 2015, Appleton, Wisconsin’s Paper Industry International Hall of Fame will be inducting six new figures into the hall of fame. One of them is a historical figure from China who can be considered China’s answer to Gutenberg. Gutenberg is frequently cited in the West as one of the most important inventors of all time for giving us the world’s first book printed with movable type, a remarkable achievement from around 1455. As with many inventions long thought to have had European origins, there’s a touch of Eastern flavor in this one, for Gutenberg’s Bible came 142 years after the world’s first mass-produced printed book made with movable type, the large Book of Farming (Nong Shu) from China, printed in 1313 by Wang Zhen.

Wang Zhen was a Chinese official who recognized that vast amounts of agricultural technology scattered across China needed to be preserved to help all of China reduce famine and be more productive. He took a Chinese invention, movable type, and improved upon it to make a practical way to print an entire book. He used carved wooden blocks for each character, and developed a sophisticated way of arranging them on two rotating tables to allow typesetters to quickly find needed characters to place them in his press. The Nong Shu was printed and preserved many notable inventions in China, including an early form of a blast furnace driven with a reciprocating piston attached to water works, something long that to be a later European invention.

Recognizing Wang Zhen for his important role in the advance of printing is a fitting step for the Hall of Fame, and I look forward to many more Asian inventors, scientists, and business leaders being recognized in the Hall of Fame in future years. The historical contributions of China in numerous fields have received far too little attention, and I’m delighted to see folks in Appleton taking the lead in rectifying this problem. Kudos to the Paper Industry International Hall of Fame!

By | September 10th, 2015|Categories: China, Consumers, Industry, Innovation, Paper, Products|Comments Off on The Paper Industry International Hall of Fame to Recognize China’s Answer to Gutenberg, Wang Zhen

Facing the Real Risk of Theft from Your Bank Account in China

An increasing number of friends are reporting troubling cases of theft from their China bank accounts. One friend, after years of working in China and saving every penny, was preparing to return to the US, but suddenly every penny in her ICBC bank account was stolen. The ICBC bank officials told her that someone had a copy of her card and had taken the money out. She asked how this was possible without knowing her password. No explanation was given, except that it was somehow her fault. She spent five days arguing with them and got nowhere. They said that the thief could have been working with her to perpetuate fraud on the bank, so why should they refund her money? Her only option now is to sue, but she has to go back to the US soon and fears she won’t have the ability to pursue the case. But we’ve encouraged her to work with a lawyer to fight this. She will, and I hope to have good news to report sometime.

Her story has almost exactly the same set of facts that we find in a chilling account, “How I sued the world’s largest bank and won” at Shanghaist.com. In this case, it was a smaller amount, 15,000 RMB that was taken from the author’s ICBC account. He encountered the same helpful consumer service policies and attitudes, and was forced also to sue for something that was clearly not his fault. He won, and it only took 7 months and some modest attorney fees to get his money back.

If you have a bank account with an ATM card, there is a real risk that one day money will begin disappearing from your account. There are some very high risk factors in China you need to understand:

1) The daily limit for ATM withdrawals is much higher than it is in the U.S. and Europe. A thief typically can take out 20,000 RMB a day (over $3,000), which is 5 to 10 times higher than typical US limits.

2) The daily limit may not be over a 24-hour period, but may be based on the calendar date, so if that applies to your bank, then a thief can take 20,000 RMB out at 11:55 pm, and another 20,000 RMB out at 12:05 PM.

3) Banks in China often don’t have effective anti-fraud protection.

4) There are many thieves with card copying or card scanning devices who can make a duplicate of your card. If they or a small video camera can watch you enter your password, having your account number and your password leaves you defenseless.

5) Thieves can sometimes pull money out of your account without using your password. I don’t know how this happens, but it has happened to multiple people in China, and it happened to us with our US bank.

6) When someone pulls money out of your account without knowing your password, it should be the bank’s fault and they should reimburse you. But consumer service attitudes and policies may not be identical to those in your home country. China banks may tend to blame the customer and argue that maybe the thief was collaborating with you, so they might not cooperate unless you take them to court. You can sue and win in China, but it will take a lot of work and the help of an attorney.

Because money in the bank is so vulnerable, I suggest several best practices:

1) Do not keep large amounts in any single Chinese bank. Move a lot of it into US accounts without ATM cards or with two-part authentication, and keep plenty of cash.

2) Use your bank cards as little as possible. Instead, use cash to make payments when possible.

3) Do not let employees walk away with your bank card (they might run it through a card copier device of some kind). Keep your eyes on it.

4) Do not let your card be scanned in any place that seems questionable or seedy.

5) When using ATM machines, look for unusual devices, small video cameras, etc., that might have been added.

6) Keep good records of where you have been so that if the bank says it must have been you that pulled all your money out of your account in, say, Harbin, you can prove you weren’t in Harbin that day.

7) Monitor your bank account frequently, and make sure you receive automatic text messages when money is taken out of your ATM.

8) When you do find a problem, document in detail who you spoke with, what you said, what they said, etc. You will needs lots of documented details if you have to sue the bank to get back missing money.

9) Avoid trusting your money to any bank that has a bad track record of protecting the money of its customers. If you know of banks that have performed well in this regard, please let me know.

These problems are not unique to China, but they seem to be a lot more frequent here and more severe, especially with the high daily minimum that thieves can take out.

If you do online banking, your risks are also high due to hackers. I suggest you use complex passwords that you change often, and only use secure computers to access your bank accounts. It’s good to have a cheap computer that is never used for browsing but only for bank access, and even then keep good firewall and anti-spyware software on it, keep it updated, use more secure browsers like Chrome or Firefox, and don’t use untrusted wifi networks to access your accounts. For added security, use VPN when you access your bank account.

Don’t keep all your money in any one account, and keep a wad of cash somewhere, too. Thieves can get everything, but we shouldn’t make it easy for them.

By | June 17th, 2015|Categories: Business, China, Finances, Internet, Investing, Scams, Shanghai, Shopping, Surviving, Travel tips|Tags: , |Comments Off on Facing the Real Risk of Theft from Your Bank Account in China

Pasta Mania: Great and Affordable Italian Food in Shanghai

There are lots of Italian places in Shanghai, but many tend to be expensive, slow, and not all that good. For affordable Italian with excellent service, my new “go to” choice is Pasta Mania. Last night I took a group to Pasta Mania on the 6th floor of the Raffles Mall next to People’s Square (take Exit 15 at the subway station for People’s Square and you’ll be on the ground floor of the Raffles Mall). For 38 RMB, my Arrabiata Penne was really tasty. The 68 RMB meat lover’s pizza was good, though I’m not a meat lover. The Al Funghi pasta my wife had was rich and creamy. The calamari was tender and delicious. I also enjoyed the beverages, especially the passion fruit tea and the rose and strawberry tea. Even tried a lychee smoothie that was quite good. We had a lot of food and a lot of fun for an average of 110 RMB per person. We could have spent a lot less by skipping drinks, dessert (half off on cheesecake!), and appetizers. Not bad!

Our waiter spoke good English and his service was outstanding. He came over and checked on us several times–a rarity in China. Friendly, clean, efficient place. We’ll be back!

There are several other Pasta Mania sites in Shanghai. Super Brands Mall has one also.

By | May 22nd, 2015|Categories: Food, Restaurants, Shanghai|Tags: , , , , |Comments Off on Pasta Mania: Great and Affordable Italian Food in Shanghai

Beware Fake Rental Fapiaos (Receipts) in China

Many expatriates living in China receive housing stipends that cover at least part of the monthly cost of rental here. In expensive cities like Shanghai, getting your housing stipend can be essential. Your reimbursement, though, requires that you provide a “fapiao” (official receipt from the government) which shows that taxes have been paid. The tax rate right now is 5%, so your fapiao of, say, 8,000 RMB costs your landlord 400 RMB. Your employer then uses the fapiao for some kind of tax benefits in reimbursing you. If you don’t provide a proper fapiao, you generally won’t get your housing stipend.

A few things can go wrong on this process. Make sure you know exactly what name your company requires to be on the fapiao. For me, it has to be the proper legal name of my company, not my name and not other commonly used versions of my employer’s name. One time my landlord bought several months’ worth of fapiaos all at once, but used the corporate name I pointed to on my business card instead of the official legal name, and I ended up having to pay for new fapiaos out of my pocket. In that process, though, I learned that getting fapiaos involves going to a local tax office, showing your rental agreement and your passport, and then simply paying 5% of your rent to buy the fapiao.

Also make sure you get fapiaos by the month. Your company will generally want one for each month, not one for three months at a time, even if you pay your rent once every three months as I do.

A more troubling problem you may encounter is fake fapiaos. Fake receipts? Yep, it happens, and is an easy way for an unscrupulous person to make some quick money. This may happen when a real estate agent, after closing the deal for your apartment, offers to save the landlord the trouble of getting fapiaos. The agent may have a friend allegedly at the tax bureau who can help you get the fapiaos easily. If the agent doesn’t need a copy of your rental agreement, that’s a clear sign that something is wrong. I don’t know if the seemingly official fapiaos are printed on stolen receipt paper from government offices or are just really good forgeries, but they look like the real thing and businesses may accept them and reimburse you, but if there is an audit or careful investigation, they may discover that the fapiaos are fake and you may then be denied your reimbursement.

For Shanghai folks, you can check to see if your fapiao is real or not using a government website: http://www.csj.sh.gov.cn/wsbs/WSBSptFpCx_loginsNewl.jsp. It’s in Chinese, so you may need help doing this.

If you are getting fake fapiaos, let your landlord know. It can hurt their credit and their reputation with the government. It may end up hurting you. The crooks who are stealing your money (and stealing tax money from China) with fake fapiaos need to be stopped. Of course, your agent or whoever gave you the fake fapiaos will be shocked that their friend in the tax office made some kind of error. Maybe they knew, maybe they didn’t, and maybe it was all an innocent mistake, but given the easy money to be made, chances are someone is just pocketing the money, and not pocketing it accidentally.

Unfortunately, one acquaintance of ours says that she got fake fapiaos by going to the fapiao office her business told her to use. I think this was an official fapiao office but I need to confirm that. Whether it was an accident or intentional theft, you need to recognize that there is a possibility that the fapiao you get is fake. Check to make sure they are legit, and try not to get too many months of fapiaos all at once in case there is a problem with them.

By | May 18th, 2015|Categories: China, Finances, Housing, Products, Scams, Shopping, Surviving|Tags: , , |Comments Off on Beware Fake Rental Fapiaos (Receipts) in China

Beware Counterfeit Money from ATMs: It Can (Rarely!) Happen in China

Two good friends of mine were traveling in Beijing recently and took out several thousand RMB from a Bank of China ATM machine in the lobby of a popular international hotel chain with a great reputation. Later that day, when they used their cash to pay a cabbie, he checked the bill they gave him and declared it was fake. They tried several other bills and all were fake. They didn’t believe the cabbie. They later went to a restaurant and had their bills rejected. They went back to the hotel and confirmed that the bills were fake, but the hotel said it wasn’t their fault and the bank claimed that it wasn’t possible for fake bills to be issued from their machine.

I’ve read of others encountering fake bills from ATMs, usually with the insistence of the bank that it is not possible. I’m afraid it can happen, though it has never happened to me. But now when I get cash out, before I leave the ATM, I hold a few up to the light to see if they are watermarked. The fake bills my friends had were lightly printed in the watermark area so it looked like a watermark, but holding it up to the light produces a much different effect.

Check a few bills at your ATM machine to reduce the risk of getting a big wad of fakes. Just my two cents.

By | May 17th, 2015|Categories: China, Scams, Surviving, Travel tips|Tags: , , , , , , , , |Comments Off on Beware Counterfeit Money from ATMs: It Can (Rarely!) Happen in China

Internet in China: Is Your URL Redirected to WKPG.org or Other Unwanted Sites? Here’s Help

Many Internet users in China are finding that the foreign websites they want to access are frequently redirected to an unwanted URL, most commonly WKPG.org. This can be extremely frustrating. This appears to be coming through local Internet Service Providers and may involve some sophisticated javascript that is injected into your URL request to redirect some portion of your requests. It is not a virus that anti-virus software can detect, though it is certainly an example of clever malware that is somehow injected into your browsing.

After several tries, here is what has worked for me and it has helped some friends. First, clear your browser cache and close your browser. Second, flush your DNS cache. Third, restart your computer. The DNS cache flush may be most important, so if you want a fast fix, try it first (after closing your browser) and see if that helps. But I suggest doing all 3 steps. Search for details of how to clear the cache of your specific browser and how to flush the DNS cache for your computer. On Windows machines, for example, the proper approach may be to run CMD as administrator (press the Windows button, search for CMD, then right click on the CMD program and select “run as administrator”) and then type “ipconfig /flushdns” (without the quotes). On my Mac, I had to run terminal and then enter “sudo dscacheutil -flushcache” (without the quotes). Check for your operating system.

But what is going on? Some article at Reddit (here and here) explore the possibility of this being some kind of practice of new capabilities related to the Great Cannon. I’m not sure. But it’s ugly and frightening that it can happen so easily. It may be that using https:// connections for added security could help prevent the problem in the future. That’s just a guess.

By | May 3rd, 2015|Categories: China, Internet|Tags: , , , , |Comments Off on Internet in China: Is Your URL Redirected to WKPG.org or Other Unwanted Sites? Here’s Help