The Expats' Gala

Also known as the "Charming Chongqing New Year's Ball" which officially invited as many locally resident foreigners as could be invited. All in all, maybe fifty attended. In a city of 5 million, and a municipality of almost 40 million, that isn't terribly great attendance. But it's not bad when considering, as I was later told, that there are only about 150 foreigners who live long term in this city, and maybe 2,000 at any given time (including tourists, business-people, temp workers).

We filed into the entry hall of the River Rose Hotel for registration, past a pair of odd photographs hung upon the wall. One was a picture of Mao Zedong dancing with some woman, and the next photo was of Dubya and Laura Bush also dancing the night away. I wonder if the hotel realizes how offended Bush would be by that comparison? For that matter, I'm surprised that more Chinese aren't offended that their beloved mass-murdering forefather is being compared to the US joke-in-chief.

The hall where the foreigners ball was to be held was a lovely impression of former colonialist glory. The center of the room was filled with a dance floor and stage quite similar to the opening scene in 'Indiana Jones and the Temple of Doom'. Surrounding that, leathery grottoes set back against the walls were filled mostly with the local elite, with European or Indian faces sprinkled lightly over the top.

Paul, our most recent teacher, introduced me to the man who the local government had called in to consult on this ball, among many other projects, a Mr. Felt. Mr. Felt was an older Swedish man with an 'Ian McDonald'ish look to him. Very experienced, very much inside the loop as a consultant to both the government and to foreign businesses looking to do business in China. We all settled down with some wine and waited for the show to begin.

The show itself was fairly predictable, if you've seen a Chinese variety show on TV. Shadow-puppetry was accompanied by ear-piercing sound effects (birds chirping, roosters crowing, wolves howling); a 'ceremonial' champagne pyramid was made into a royal sticky mess, but I hardly saw the entertainment value in it; a Taiwanese singer, Theresa Tang, sang as couples danced away in the semi-gloom. I deduce that the government was afraid the dances (at least three separate occasions that evening) would not be attended, so professional dancers were sent out onto the dance floor dressed much better than most of the guests--tuxedo for the man, flowing dress and gossamer silk drapes hanging from the arms--and flitted about like overdressed pixies. The wife of the consul of Cambodia was brought in to cut some cake, along with some local bureaucrats and foreign businessmen. Perhaps the highlight of the program, however, was the Sichuan Opera-style performer who could change masks across his face faster than you can blink. Unfortunately, being seated in one of the back corners, I couldn't see his performance very well, even with strategically sited TV screens around.

More interesting for me than any part of the planned program, was the conversation back in my corner. Who better to ask about Chongqing's current business climate, than one of the men in the center of it all?

Chongqing, it seems, is not a good place for foreign investment or business to locate itself. Although labor shortages (you wouldn't think to hear about those in a land of 1.3 billion people, would you?), density of competitors, and rising salaries on the eastern and southern coasts of China are making those regions less glamorous to the world's metacorporations for purposes of outsourcing, Chongqing hasn't really done much more than create a facade of propaganda in order to present itself as a viable alternative.

These things I was told:
(A) The local government (and thus business climate) is as incestuous and corrupt as any in China. Middle-level bureaucrats drive BMWs which they shouldn't be able to afford on their official salaries even if they saved up money for all their lives. The PSB (Public Security Bureau, i.e. China's KGB) has a stake in one of my school's direct competitors, for example. I suddenly could understand why we have so much difficulty finding good marketing opportunities, especially in public areas.

(B) These bureaucrats are "hostile from top to bottom" to foreign businesses which are seen as being "too honest [for the local government kleptocrats] to trust". Singaporean, Taiwanese, and HK companies, in any case get slightly better treatment. Other foreigners should just forget about opening companies that try to sell to the local market. Only factories for export and services targeted to the local government have a reasonable chance of profiting at the moment.

(C) In the days of true Chinese communism, Chengdu was considered the 'administrative center' of the region, and Chongqing was considered the 'production center'. As a result, there is a remaining lack of administrative capability in Chongqing. Local bureaucrats have little sense of how to make Chongqing an attractive business destination, other than proclaiming it from the rooftops, spending money on lavish celebrations in its honor, and building more highways and skyscrapers through its center. Xi'an, for example has set up a development zone in partnership with the EU in which European businesses will receive years' worth of tax freedom. Similar partnerships are lacking in Chongqing, because the local bureaucrats apparently believe that the onus of development should be put on incoming companies (and in the meantime, they can pocket the money that Beijing has sent for the very purpose of such development).

Luckily for Chongqing, there is hope on the way. Beijing, finally fed up with local incompetence, sent in a new mayor. This man is known for chopping heads--notably in the port city of Dalian in the northeast, where there were mass resignations and a couple suicides among the top bureaucrats shortly after his arrival--to good result.