My Beijing, on the eve of the Olympics

I still remember that first flight into Shanghai in late 2001 with a Singaporean friend and conference organiser who wanted to introduce me to the Shanghai Banking Association in the hope that we could strike a deal to run a banking conference in China. We landed at the soviet styled Hongqiao airport, which was then the international airport and made our way to the Shanghai Banking Association offices which was on the old Puxi side of the river somewhere near Nanjingxi lu, if I recall correctly.

It was also an old style building, with a 1960s elevator that took us to the correct floor where there was a large landing area with a generous deco art window with grills and the musty smell of seasoned furniture. We entered into one of the offices along the corridor and there met the secretary general, a Mr Yin, over rounds of Chinese tea in traditional Chinese setting.

Mr Yin smoked like a chimney, and I never remembered when his last cigarette ended and the next one started. He was, as I later found out when I got to know him better, like many in Shanghai, from somewhere else. In his case, he was from Jiangsu province from where many of the quietly hard working administrators in Shanghai like him came from.

Mr Yin did not speak a word of English, and I did not speak a word of Chinese, but between us we had a very easy conversation translated through Emma Huang, one of his staff. On the strength of a hand shake we agreed to what was going to become one of the world’s first agreement between a Chinese banking association and a foreign commercial organisation to run a very successful banking conference for the Chinese banks. The opportunities that the hand shake with Mr Yin opened for us in China, and the implicit trust that it was built on, surpasses all the memorandum of understandings and contractual agreements with partner organisations I was to do with any other organisation in the future.

The essential unspoken rule of that trust would have read that “I am placing my own career on the line to entrust this agreement with you, a complete stranger to me, to know that you will deliver a world class programme as you say for my constituents. You will guard my reputation and do nothing to harm this trust I am placing on you now.” The rest was left to me to deliver.

Such arrangements with government officials is actually not unusual in China and I think it is a healthy model. I think governments should be weak – so that there can be a symbiotic relationship with the rest of society, especially with entrepreneurs whose creativity creates solutions for them. I was familiar with one local technology company that transformed the entire foreign exchange settlement process by cutting the approval time required by the State Administration for Foreign Exchange (SAFE) from 25 days in the old days to five, just by getting a relatively junior ranking official to give their web based service a try. The junior officer was subsequently promoted and the company got to do several future enhancements for SAFE in the 2002-2004 period. I cite this example to contrast with countries like Singapore with strong governments, huge budgets and ostensibly smart people (of course people are smart when budgets are huge), but who are so capable as to do everything for themselves that they do not need the rest of their own society.

What was unusual was Mr Yin’s willingness to trust a complete foreigner. That relationship with the SBA is now institutionalised and I have seen four subsequent secretary generals come and go since then. For a while, I would send Mr Yin cigars as a token of our friendship, until I got word through his staff Emma that he was absolutely polluting the entire office.

In a sense, Shanghai was always a natural entry door into China for foreigners. My colleague and friend, Jeremy Sim, recently introduced me to an old book, “The Problem with China” written by that famous philosopher, writer and thinker Bertrand Russell in 1922. I was a fan of his writings on religion and western philosophy when I was in my 20s but had almost forgotten him. I almost jumped out my chair when Jeremy, at least one generation younger than me, mentioned that Russell lived in China for a year and wrote a book on China.

The fascinating quality of the book was the way in which Russell, in his time, was able to cut through the hubris of western prejudices against China. His description of the nuances that only some one really familiar with the country – the friendliness and openness of the Chinese people to discuss their own country even with foreigners, and the modernity of Shanghai even in that age, could have been transposed to what the country is today without a word being out of place. Then as today, Shanghai was the natural starting point for any foreigner, as it was for me.

I could add some of my own observations as to the quintessential qualities of China today. Notwithstanding western biases, in my view the social fibre of Chinese society is substantially very democratic. Everybody has an opinion. The internet is vibrant with exchanges of very knowledgeable opinions. If indeed government officials can be corrupt and over-bearing, it is in equal measure to how the average Chinese can demanding and fully aware of his social rights. Herein lies the quandary for anyone ruling China. Leaders hide behind traditional hierarchical structures, and the people abide by them, but to a point.

I think that Russell’s sympathetic treatment of China and how it was dragged into war with Japan and humiliated to pay extortionate customs duties to Western powers is a profoundly powerful starting point to understand how far China has come as a nation, and to truly appreciate the significance that 8 August 2008 – the opening ceremony of the Olympics – would mean to this country. Not surprisingly, I discovered as I was writing this blog that the book was reprinted this year.

I gave the name of the Shanghai Conference “The Future of Banking in China,” which it carries to this day. In the first conference held in the spring of 2002, the local Chinese bankers attending came to hear about all the foreign banks that were going to descend upon the country under the World Trade organisation (WTO) agreement signed just the previous year to liberalise the financial services sector within the next three years. They were curious, maybe afraid that their own banks will be take over. The only foreign bankers they met were the ones we flew in to speak at the conference. They were particularly curious of Citibank.

Within a year, the competition in consumer banking started. The foreign banks did come to Shanghai and the landscape changed and changed and changed several times over the course of the next few years.

How quickly things change in China. By the time we reached the 2008 iteration of the conference, 60 percent of the powerpoint presentations were by Chinese bankers themselves having evolved a culture of becoming more self assured of their own best practices and learning this strange culture of actually sharing strategies with each other through our conference.

One of the foreign bankers we invited to speak at the 2008 conference was from Washington Mutual, and the poor man was more concerned if he was going to have his job when he got back to the US than he was of his presentation. The Citibank the Chinese so feared in 2002 became technically insolvent and is now looked down in China. It was made to look foolish by Shanghai Pudong Development Bank (SPDB). SPDB turned itself into a national powerhouse on the back of the original training and capital provided by Citi. It is now not allowing Citi to take any subsequent substantial stake beyond its original four percent. Citi then courted a really ly poorly run bank, Guangdong Development Bank, more out of desperation to own something or anything in China. The dilution of the Citibank brand name in China was massive.

One of the things I was particularly pleased about was the financial deal I struck with the SBA to ensure the long term viability of this conference. In everything one does in China, one has to be mindful of the relentless, shameless copying that will ensue. Especially in the knowledge business. Especially in the Internet era.

Every year without fail, our conference agendas were lifted almost immediately from our own website and put on that of at least three local organisations, cheeky enough to represent us as their “supporting organisations” and causing confusion in the marketplace. Our only consolation was that in the knowledge business they could copy the form, but not the substance of what we do.

Although it was the simplest of deals that I won’t share here, it kept away other organisations from seeking to work with them on the same basis. A number of local publications swirled around the SBA like flies during the first conference we held and asked if they could have similar arrangements with them. When they were told the deal we had, these local copycats scratched their heads and wondered how it was possible (I should also add that we have foreign copy cats as well, including Irish and Australian guys who are serious readers of my blog, but I digress).

Nonetheless, it is not difficult to become very comfortable in Shanghai. Shanghai loves its foreign friends more than it loves its own Chinese people from other provinces. Shanghai is where the foreign community lives the Great Gatsby life, surreal, a swirling masquerade, unconnected to the real worlds they come from.

Shanghai is where, dinning at the Jean Georges at Three on the Bund, on the table just across, I would encounter Giorgio Armani, no less, entertaining a host of his friends, his Shanghai flagship store just downstairs. The world was at its feet.

The “brunches” every Sunday are where the foreign and local hauteur celebrate every weekend for its own sake. Arguably the world’s most ostentatious, outrageous Sunday brunch must surely be at the Westin (definitely in my recommendation of the 1000 things to do before you die), complete with a 100 piece orchestra, choir, free-flowing champagne, children running around and food from all over the world.

I loved Shanghai’s four seasons – the most beautiful of which is always its autumn when its tree lined streets in the French quarter are littered with leaves, and the Shanghainese in streets with their trench-coats look their smartest and the weather is at its best. In a moment of my own hubris, I sometimes tell my friends that if I were Chinese, I would most certainly be Shanghainese. I enjoy how smart and sharp they are as a people, and enjoyed holding my own amongst them.

But it was a Shanghainese, no less than the chairman of the largest bank in the world, Mr Jiang Jianqing of ICBC Bank, who told me in no uncertain terms that if I wanted to succeed in the banking industry in China, I would need to go to Beijing. This was in a conversation in 2004, when I was meeting him for the second time and was proudly telling him that I have this working relationship with the Shanghai Banking Association, of which he was chairman at one time.

The government’s promulgations that Shanghai will be the first city to open its financial sector to foreigners attracted thousands of foreigners there, and hundreds of global companies. But even as the foreigners were distracted in this second city, work had already begun to rehabilitate the Big Four Chinese banks based in the main city, Beijing. Mr Zhang’s response to all this was to wave his fingers and make it clear to me – “come to Beijing.”

My road from Shanghai to Beijing was not as easy as that flight from Hong Kong to Shanghai in 2001.

I first visited the China Banking Association in Beijing in 2002, in the hope of replicating our success in Shanghai. The reception I got was that from an old, cold government bureaucrat whose first question to me was “why are you in Beijing?” and “what do you want from us.” End of conversation. I remember visiting one of the earlier shopping malls in the city during that trip and being asked “Ni hui shuo Zhong guo hua ma?” and not a clue at that time what that meant. In Shanghai, just standing in the sub-way station, I would get passer bys practicing their English with me.

The value systems of the two cities were dramatically different. In Shanghai, Chinese professionals returning from the US and other foreign universities would make a bee-line to work for the foreign multinational corporations. In Beijing, returning Chinese professionals made a bee-line to work for the government agencies, notwithstanding that salaries can be four times lower than working for foreign companies. In Beijing, there was perceived value in working for government, at least in the early years of their careers because power and connections were more important than money. The two cities were in many respects as good as two different countries.

Indeed, China is not all one country. Its 33 fiercely independent-minded provinces (31 plus Hong Kong and Taiwan, if we recall) are as good as 33 countries co-existing, and then there is Taiwan, the “renegade” one. It’s called the China Banking Association, but it could just as well be called the Beijing Bankers Association. At that time, the China Banking Association was under the even more bureaucratic People’s Bank of China, located in an old building with a dark, squeezed conference room.

To build a China business, I had to travel to visit the banking associations in as many provinces as possible and build relationships separately, one by one. In some provinces, the reception was outstanding, where the local chairman would wine and dine me and my first Chinese staff, Joanna Woo, until we were intoxicated under the table. I surrendered my liver to endless rounds of mao tai, the wonderful local rice wine that can make me walk out into the wintery night without my coat on and feel no cold. In others, they were indifferent. In none, did any relationship with the China Banking Association in Beijing matter.

If there was one person I would attribute the building of our China business together with me in the first four years, it was Joanna Woo. A true blue fierce Shanghainese girl, subtly attractive, incredibly intelligent and a sufferer of no fools, except maybe for her boss. I have the best of memories of building goodwill in the industry together with her.

She was unusual for a Chinese, ready to tick off senior people rather than indulging them when they were tacky enough not to turn up at a meeting as promised. When a low ranking government official in Beijing asked for a 50,000 reminbi bribe to secure another low ranking official as a speaker, she just cut a path for us to go straight to the top for free.

Joanna set the standard for all the China staff we were to hire subsequently – Chinese and yet international , someone the Chinese bankers would trust to connect them to the rest of the world. This was The Asian Banker story in the Chinese banking industry. We were a bridge between the best in China’s banking industry with the best in the rest of the world.

Joanna was also unique as an individual because she was adequately international without ever having had studied abroad. She could hold her own long before she met her benignly caustic English husband, Michael.

The poeple of a country with 1.3 billion people cannot be caricatured and yet foreigners do that. Tao Ying Ying, a friend of my staff Wang Yi whose wedding I attended in Nanjing, introduced me to a writer, Berly Markham whose book “West with the Night” was something that Ernest Hemingway himself had admired – not something that many Americans could have told me. The Chinese education system, although rudimentary, provides its young people an adequate foundation to build on their own individualistic preferences.

We continued visiting the China Banking Association year after year after that first meeting, and was confronted with the same cold bureaucratic treatment until 2005, when the business climate in Beijing itself appeared to change magically. Two of the Big Four banks were announcing their proposed Initial Public Offerings (IPOs) to the world and the chairmans of the banks started becoming savvy in meeting foreigners, including me. The China Banking Association was by this time a direct subsidiary of the China Banking Regulatory Commission (CBRC) and moved to a spanking new building in Jinrong Jie (Financial Street). It was almost as if someone had let the light through the dungeon.

I had actually first visited Beijing in 1996 on a short holiday before. There were mostly bicycles on the streets then, and I remember how the sky was blue then. The number of bicycles decreased dramatically by 2002, but still somewhat competed with the cars for space on the streets. By 2005, the bicycles became completely irrelevant. Something that I remembered from the 1996 trip was how talkative and inquisitive Beijing taxi drivers were even then. They speak Chinese with that heavy Beijing drawl, and that with an English-Chinese dictionary in hand, sitting in the front seat, it was possible for a foreigner like me to carry out a “conversation” with the taxi driver on a wide range of topics from religion or politics and Chinese history.

I now know that taxi drivers in Beijing are called endearingly “Shifu” (or master), by the local community. Say “Shifu” and they will obligingly go out of their way to provide you with all the help you need to get to your destination, with a bit of “conversation” thrown in.

In recent weeks, I found it very intriguing to watch on CNN and BBC, as part of their Olympic stories, claims that the Chinese government had been “persecuting” small pockets of people who are still being chased out of their hutongs (traditional homes built around courtyards) in the middle of the city. Even as a relatively recent arrival to Beijing, I was witness to the massive exodus of businesses and homes out of the hutongs into cleaner, more modern and space efficient buildings. The evictions themselves provded visual fodder to the foreign TV media, and in the absence of “the other side of the story” – answers to questions like how many notices were these residents given, what exactly was the compensation given, what percentage of the dwellers did take the compensation and what percentage did not – the coverage is technically sensationalist, tabloid quality stuff.

When the CBRC was first set up by the government in 2003, it was itself operated out of an old run down “hutong” in Jinrong Jie. It was interesting for Joanna and I on our many visits there to be acquainted with the vice chairman himself inside very cramped offices in a small building inside the courtyard. China Minsheng Bank, one of the larger non-state-owned banks in Beijing used to be in a hutong, although they maintained it very well. Maybe westerners feel more nostalgic that Chinese people about living and working in these little traditional houses so that they can come as tourists and take photos without having to live in them themselves. For the most parts, the hutongs in Beijing had become unsafe and unhygienic to live in and the vast majority of local people have aspirations that are no different than any city dwellers in any major city in the world.

By 2006, all of the major banks were housed in spanking new buildings. The march of Beijing from undervalued sub-scaled homes into a modern city was relentless. When I accompanied Roger Fugerson, the former vice chairman of the Federal Reserve Bank (Greenspan’s number two) to meet Liu Ming Kang, the CBRC chairman in 2006, we had to just walk around the corner from the Westin Hotel to the spanking new CBRC headquarters in Jinrong Jie, instead of taking a car. It was as good as a walk around a block in downtown Washington DC, where the Westin there is located, with wide pavements and boulevards.

The apartment I stay in Jinrong Jie right now is valued at close to about US$700 per sq feet. Many of my Beijing friends are now home owners in this proud city. Yes, it is true that some of those being forcibly evacuated from their old hutongs are not being compensated properly, but which government in any developed country is able to adequately compensate squatters moving out of prime districts?

If you visit Beijing during the Olympics, you will be greeted by an endless display of magnificent buildings. From the world’s largest airport (functions flawlessly in contrast to the one in London that was opened one day apart), to the TV station headquarters (called the “Birds Feet” for its shape) , to the Grand Theatre (called the “Egg” building ) and culminating in the “Cube” and the Bird’s Nest” where the main festivities are being held. You might ask, what does all this mean?

I really don’t think that Beijingers have even had the chance to sit down and internalise all these developments themselves. I was at the Grand Theatre with a friend a few days ago to watch an outstanding performance of one of the Greek tragedies “Medea” in dance, choreographed by the famous Dirmitris Papaioannou. It was a really good abstract rendition in modern dance, but I would have never imagined watching it in this city. At the end of the performance, my friend and I caught sight of king Norodom Sihamoni of Cambodia, himself an accomplished dancer when he lived in Paris, leaving the theater.

Outside on the main Chang-an avenue, there were screaming sirens as motorcades carrying foreign dignitaries whizzed past an endless line of traffic. Beijing had become alive to the world in a way that we thought only Shanghai could be. For those of us who have seen Beijing when it was not open to the world, it was like watching the local people “wearing their clothes inside out.” They walk out of their homes and wander in the streets like tourists in their own town.

But Beijing has always had its own rendition of the ostentatious lifestyle, an extrapolation of the expansive buildings, ornaments and spatial architecture that used to be reserved for its emperors and high society. All that now plastered into the modern buildings, restaurants and parks.

When I entertain friends who are foreign to Beijing, one of the restaurants that I bring them to give them an introductory feel of the modern Beijing is the LAN Club in the Twin Tower building in Jianguomen district near where the China World Hotel and our offices are located. The décor is outrageous, with large Alice In Wonderland mirrors, paintings on the ceiling, whimsical chairs and tables and Indian carvings. There is nothing like it in Hong Kong, Singapore or Shanghai. Here the local owners of the restaurant have brought the Beijing penchant for outrageous theater to a new dimension.

Another restaurant I love bringing friends to, but for brunch on a weekend, is a place called The Orchard, outside the city in a farmland rented by a local Chinese painter and sculptor with his European wife. Beijing today is home to strong individualism, salsa (at the Salsa Caribe), rock ‘n’ roll rebels, a subversive artist colony in Songzhuang, a livelier alternative cultural scene than in any other Chinese city, that interestingly enough, all the communist party and the secret police in the land can’t or won’t stop.

Give Beijingers the chance, and they would express their individuality in whatever way they can. The new Beijingers did not create all this for the Olympics, they created these for themselves. If the hutong dwellers are protesting against the government, it is more likely that the other side of the story is that they are protesting against an invasion into their stubborn desire for self determination than any eviction to a government defined dwelling.

From being carefully insular to becoming open to the world’s attention, maybe Beijingers might become more reflective about what all this means to them after the Olympics is over and the limelight leaves the city to go to Shanghai which will host the World Expo in 2010, although I do not know them to be reflective. But leading up to the Olympics, all of these experiences did make it dawn on me that I am being drawn to this city.

I would describe as my good fortune to be relevant to the banking industry in Beijing in the following manner. I was not in Tokyo in 1945 when the Americans overcame the Japanese at the end of World War Two, and helped rebuild their economy. It is impossible for me to be relevant to Japan today. The Japanese do not think they have anything to learn from anyone about the banking industry, except the Americans.

I was not in Seoul when after the Korean War in 1953, the Americans helped rebuild the South Korean economy. The Koreans, like the Japanese, became entrenched in the silly notion that the best banks come only from America.

But I was there in Beijing in 2003 when the Chinese government announced initiatives to reform their banking industry, and opened its doors to any foreigner to contribute to its development. Unlike the Japanese or the Koreans, the Chinese had one outstanding quality – they did not have the historical baggage to qualify who could be part of their domestic economy. They started on a clean slate.

Not that these opportunities would be given to a boy from sunny Southeast Asia on a silver platter. I have to earn it every day, simply by being there. In the early years, whenever we had press conferences on the release of some of our research findings, the local media in Beijing would interview any white person with us, my staff, retired consultants who do freelance work for us, anyone, and studiously avoided interviewing me, even if I practically wrote the press release.

Some petty preferences can find their way on to the world stage. The chairman of the CBRC, Mr Liu Mingkang, who studied in a polytechnic in the United Kingdom, has a preference for everything British. This translates into giving the Financial Times, rather than Bloomberg or Dow Jones and least of all The Asian Banker, first access to all that is going on in the financial world in China. Remember this every time you see scoops on the China’s banking industry splashed across the front pages of the FT.

Still, who am I to begrudge that? To be caught up with the history of China is to be caught up with the history of the mainstream world, something that I would never dream of being a part of, being an ethnic minority from the backwaters of southeast Asia that I am. So I quietly bide my time, and humour the local people. I work their perceptions, not against it. There is a groove for everyone in the plains of history.

I sometimes tell my friends from the mainstream countries of the west, what a wonderful time in the history of the world it is for them. They don’t even have to be smart. How much more can a white person achieve for the world if only he or she had a broader perception of the aspirations and destinies of the other people around them, instead of forcing their own narrow values to others.

In the process, I set out to educate the Chinese bankers on the well run banks outside of the western world that they needed to be aware of, about a small bank called DBS in Southeast Asia, Chinatrust in Taiwan, ABSA and Standard Bank in South Africa (which ICBC eventually bought into), and even ICICI Bank in India, a country where the Chinese never thought would be home to world class institutions.

On of my most satisfying moments professionally in this regard was when I engineered for the 2005 Excellence in Retail Banking Awards to be held in Beijing in the year when Chanda Kochhar of ICICI Bank in India was selected to be the Retail Banker of the Year for Asia. The first ever winner of this prestigious award was Ms Chen Xiaoyan in 2003, the head of retail banking for ICBC Bank, for her outstanding work in consolidating all the data centers in her bank which had more than 100 million customers across 20,000 branches.

I know both women well and both are giants, both intellectually and in execution, in the Asian retail banking industry, making all the foreigners who run retail for the larger regional banks in Asia come across as little boys. If not for these two, all the huge numbers we see brandished around about the size of the future of banking in China and India would not have ever happened.

Ms Chen attended the heads of retail meeting that was held in the morning of the awards ceremony, where she sat with translator’s headset on, listened carefully to Chanda sharing about her strategies and watched as western and other international panellists validated this Indian bank. I invited Ms Chen to give away the award to Chanda, that evening. I like to think that that was the day when ICICI entered the psyche of the major Chinese bankers. So while I can’t do anything to break the deep prejudices that the Japanese or Korean banks have about learning from other Asian banks, I like to think that I contribute in a small way to how the Chinese bankers view their world.

My initial desire for the banks in Beijing was different from that which I thought was relevant for Shanghai. I designed the first conference for Beijing to be focused on risk management, because of the international focus then was on the non-performing loans of the Big Four Chinese banks. I called it the China International Risk Convention in 2005. The CBRC was very supportive and Mr Tang, one of its vice chairmans was the keynote speaker. But Beijing is a city of huge egos. If we were to have the chairmans of the large Big Four banks to be speakers at our conferences, then we needed to upgrade them. So, the following year, I renamed it “The China International Banking Convention” with a desire to make Beijing, rather than Hong Kong or Seoul, the home of the most important annual conference in commercial banking in the region, given the fact that four of the world’s largest commercial banks had their homes in this city.

I must add also that coming from Singapore makes a huge difference and I have much to thank Singapore for. When the Chinese banking regulators, the CBRC and PBOC, sign Memorandum of Understanding (MOUs) with top regulators around the world, all the countries they work with are OECD countries, except for two – Hong Kong, because it is part of China, and Singapore. A city state of four million people does not have the right to be taken seriously in a city that is home to the largest population in the world, but it is. Like the access that I have built in Beijing, it is not something that was given as of right to Singapore either. They had to earn it against preferences for western and OECD relationships.

But Lee Kuan Yew, the founding leader of modern day Singapore, had prepared his country for this role in the course of world history. First he forced his own Chinese population, some kicking and screaming, to learn Mandarin. I believe that there are easily 100,000 Singaporeans working in China. That is a massive 10-15% of the total working population of a tiny economy. Just one residential district in Beijing, Chao Yang, is three times larger than what we call Singapore.

Many Singaporeans in China are in the soft services industry, senior managers in the top brand name international hotel chains, restaurants and related services. Every time we hold a conference anywhere in China, the production companies we use are always “fellow” Singaporeans who now live and breathe Beijing. And yes, they are all there, having one part or another in the operations for the Beijing Olympics – and I am very proud of my friends in this community.

Secondly, Singapore prudently amassed considerable wealth that enables its Temasek and the Government of Singapore Investment Corporation (GIC) to become the only major Asian investors in the Big Four Chinese banks. The aggregate size of all the sovereign wealth fund of Singapore is several times the size of all the Southeast Asian economies, including Indonesia, Thailand and the Philippines, population 360 million, put together.

My friends in China Construction Bank have much to say about the fact that Bank of America does a lot with them as an investor, but there is no denying the fact that the other investor is Temasek.

The Singaporean influence shows itself up in many ways in the Chinese economy. The current social security system where Chinese can purchase homes using their social security net, comes from the Singaporean provident fund model. China’s first sovereign wealth fund, the CIC was set up following the Singaporean GIC model.

But the Chinese learn the darker things as well. The idea that Olympics should have a special area for official protestors was actually first developed by the Singaporeans when they hosted the IMF in 2005 (a modification in turn from the Arabs who completely banned protests altogeher at the IMF Meeting in Dubai in 2003). The western media thinks it is disingenuous that protestors should be designated protest areas, and I think so too. But the new Asian response, made in Singapore and perfected in China, is “you want to register your protest, don’t say that we did not gave you the place to do so.”

Having said all this, the ability of China and the Chinese to learn from others goes back many centuries. One of my all time favourite books on China is “Ten thousand miles without a Cloud” published in 2003 by a girl called Sun Shuyun, who is slightly older than I am and lives in London. In this book, she retraced in one year of travelling, the 16,000 mile journey of the seventh-century Chinese Buddhist monk Xuanzang (or Hsuan Tsang), across the Silk Road into India to learn Buddhism from Indian Buddhist masters and texts, and to visit Buddhist sacred sites, which took him 18 years.

The book is at once a study of the reflections of this modern Chinese writer, as well as that of the experiences of Xuanzang 1400 years ago. There are today many books purporting to provide readers with a glimpse of the Chinese mind, but almost all are highly egoistical and self congratulatory. Many are absolute rubbish. This was the only one that I found to be a refreshingly honest self-assessment of what it means to be Chinese, written (very importantly) by someone who is clearly very proud to be Chinese, as opposed someone who is affected.

Her thesis was that prior to the arrival of Buddhism from India, Chinese society and morality was communicated by analects and codes. Buddhism introduced the use of story-telling to communicate human values, and was the foundation of that all time favourite Chinese classic, Journey to the West, featuring the Monkey King. She also explored the different ways in which China and India influenced each other. For example, she points out that sugar originated in India in its original mud form. It was brought to China during the Tang dynasty (hence its name, tang, in Chinese) and refined Chinese sugar found its way back to India, and for that reason, the Indian word for sugar to this day is “chini” (which sounds like China).

I subsequently bought several copies of the book as a gift for some of my Chinese friends, but few actually appreciated it. In fact, some of the feedback by Chinese readers on Internet sites on the book were negative. Something I subsequently learnt was the general Chinese dislike for having truth to be spoken to them.

Some of the outstanding Chinese movie directors that I admire, like Zhang Yimou and Zhen Kaige, were also not necessarily admired within China when they first started. Some of my Chinese friends thought that movies like Zhang Yimou’s Red Shorgum and Raise the Red Lantern explored the inequalities in ancient China and in rural China were way too glaringly, and that it was not good for a Chinese director to make films that hangs dirty Chinese laundry out for the whole world to see.

Bertrand Russell pointed out that at the onset of its encounter with Western civilisation in the 17th and 18th centuries, the Manchu emperors saw themselves as superior to the West in history, culture, learning, customs, food, medicine and basically everything. But the Chinese emperors had one blind spot. They had no clue what the tremendous strides that Western civilisation was making in science, in war and in medicine meant to the global chess game they were increasingly drawn into playing.

That same arrogance exists today, except that while China may now have imbibed something about the scientific process, they now have a new stumbling block – they have little instinct on the impact of information on the world and how it can indeed destroy China if they do not master it.

I am fully aware that I am saying this about a country that is now the largest user of the Internet in the world and where emails, blogs, websites and mobile phones show that the Chinese are probably one of the largest consumers of information in the world. But just as when Emperor Chien Lung looked at the foreign gunboats in 1789, understanding the form is not the same as understanding the substance of the threat.

This inability to deal with information, especially about themselves, is a modern day blind spot. How much worse can Tibet, Taiwan or the school children who died in the recent Sizhuan earthquake be than the shamefulness of the US war in Iraq, the Palestinian problem or the Bosnian massacre? Yet, the Chinese government and its people behave as if their positions on the topics concerning them are non-negotiable. The conversation shuts down. To discuss these will be an affront to the Chinese people. Then the bullying sets in. “We are China, you don’t understand our position.” “You can discuss all the other problems of the world, but not this one.” “If you respect China, you will not meet the Dalai Lama.”

Yet when it suits them, the Chinese are able to play the information game as well as anybody else. We see this in the way that the regulators and the major banks deal with the international investor community, complete with powerpoint slides adeptly handling the scepticism about the non-performing loans and the quality of Chinese banks as investible assets. When we published a piece about the quality of the CBRC annual report, they invited my staff, Benny Zhang Wei, to fly to Beijing to explain to them how they could improve and were very receptive to his ideas.

But when we arrive at the Olympics pollution problem, the government is caught flat-footed. It was clear as long as one year ago that the problem was more entrenched than the authorities led people to believe, but they wanted to wish the problem away.

One Beijing TV coverage I watched sometime in May, of the attempt to test the impact of limiting cars on the road, had the newscaster saying that the tests were a success because “the cars along the main roads now travel at 45 kph and the average speed of the buses has gone up from 12 kmh to 20 kmh.” But that was not the problem!

So there it is now, hanging over Beijing like a pall for the whole world to see on the eve of the single most important event in their modern day history. The media still covers it is as if it is still a small embarrassment that will go away if the world only sees all the other good things about China.

All this is not to say that the Chinese is unable to solve this problem. There is a Chinese way to problem solving. To be sure, after the Olympics, heads will be rolling and a quiet investigation will be underway, all the way from the top, away from the glare of the international media. Quietly, the changes will be in place and 20 years from now, we will speak about the Beijing Olympics pollution as we now do the pollution during the 1984 Los Angeles Olympics.

I believe that the excuse that the pollution over Beijing is caused by vehicular exhaust and factories was such a farce. It did not strike the officials to point out that China has high vehicle emmision standards than the United States – Al Gore said that in his popular environmentalist video “The Inconvenient Truth” (and so it must be true). It did not strike them to boast about the fact that most of Beijing’s public buses are powered by cleaner LNG and not diesel – more than any other country in the world.

The real problem, I suspect, is the fact that almost all of Beijing’s energy supply is coal-powered. The pall will go away only if they shut down the power turbines in Beijing, which they obviously can’t. There is one within sight of our offices in the Guo Mao area. The problem is that the only realistic alternative power supply is nuclear so as not to be dependent on the oil states, and the coal mines in China keep thousands of rural folk employed.

The Chinese leaders responsible for energy did not discuss these things, especially in the days leading to the Olympics. Just as they would not discuss the silting problem in the Yangze river that is endangering the Three Gorges Dam.

From a foreigners perspective, not managing the perception of the foreign media in the areas of the forced evictions of the residual hutong dwellers or the pollution, may appear bizzare. But to the Chinese government, these may be managable domestic problems.

But if the foreign media hits the nail on the head and makes the price of coal in China an issue, they may well be shaking the Chinese economy at its very foundations.

Many economists that Chinese surpresses production prices by artificially keeping the currency exchange rate low. Continued easy access to state-own banks credit is actually the deeper reason that inefficient and low cost Chinese manufacturers continue to dominate global production prices.

But the deepest reason of all, surely must be the cost of energy. China is not victim to global energy prices because of its continued use of coal – mined by thousands of under-paid workers under extremely cheap and dangerous conditions.

If the pollution in Beijing during the Olympics was central to the Chinese government, someone’s head in the state administration would have been rolling by now.

Not that the international media is any good at getting to the heart of the issue. They can only deal with it to the extent that it is visual, having a rookie reporter standing on the streets of Beijing with a pollution indicator machine (and if he gets deported, no problem, we will send another one in). That, the government can deal with. It will go away.

I believe that at the heart of this congenital inability to discuss truth is the paradoxical co-existence of supreme pride and a supreme sense of insecurity in the Chinese psyche. All praise and all criticisms are intensely personal to their identity as a people.

I remember when Taiwan’s Ang Lee won the Oscar for his work on “Brokeback Mountain” in 2006, the Chinese newspapers in China, Taiwan and Hong Kong were just heaping praise on themselves. The China Daily said, “Ang Lee is the pride of the Chinese people all over the world, and he is the glory of Chinese talent…” There was this “We Chinese ….” pride that did not allow room for a non-Chinese like me to say, “hey I too enjoyed Ang Lee’s work, can I join in the celebration?” The outsider is excluded.

There is this tone in the Olympics that “..we Chinese.. have come into our own in the world”. As a non-Chinese in Beijing, I am really proud to have seen what they have achieved in the past five years to make this day possible, and I wish that I could be invited to celebrate together with the Chinese instead of being there as an outsider to just validate them. Subtle but big difference.

I will be watching the Opening Ceremony to see how much of these themes will be played out and to what extent the Chinese can rise above themselves and be truly part of the world who acceptance they so much crave for.

If the Chinese were free of this inferiority complex, they could potentially rule the world. But God in his infinite mercy made them imperfect, so that they will always be dependent on the approval of others. It is for this reason that I think that for all the perfect preparations that they have made for the Olympics, the presence of the pollution is shaping China in a way that it may not understand at the moment. It will keep China one step away from believing that they have arrived and save them from their own hubris.

At the same time, we have to always be mindful of the real Chinese contribution to the world – and that is human organisation. Even 1000 years ago, its population was already about 100 million – the largest bar none. China had to be the most organised country in the world. The layouts of the temples, the palaces and the courtyards, right up to Tiananmen, are a reflection of the value systems, processes and hierarchies that were necessary for a large society to function.

So, at the Olympics, they are probably the best suited people to throw in a cast of 100,000 to show the world what organisation can achieve for humanity. Yet, we the outsiders should maintain a sense of proportion about all that we see.

The Chinese are not the people to have developed 600 strains of corn agriculture five hundred years ago. That achievement belongs to the Inca people in the mountains of Peru. Neither were they the inspiration of the Olympics itself, bringing warring nations together to recognise mutual human aspirations. That belonged to the Greeks. The Chinese may be able to perfect the form, we really need to remember that the substance came from somewhere else.

So, in this way, we come to terms with the inter-dependent world we need to be, and Beijing can use the Olympics to launch itself to become that cosmopolitan global city that for 2000 years it just could not. We forget that as a city, it was built in a very parched and inhospitable land, because it was built to be fortified against the world, not built for the world, as many ancient trading cities were. The transformation from the primordial to the erudite is not as straightforward as the newspaper headlines make them to be.

Watching the international news media coverage of the days leading to the event, one would think that the Olympics are all about terrorists, the pollution and people being evicted out of their homes. The problem that China has is that with a population of over 1.3 billion people, there are any number of sub-groups that the international media can choose from to turn into news.

Some of the international media coverage is downright patronising. The otherwise erudite Economist in its August 2 edition made the comment that “ few would begrudge China some self congratulation as it rakes in the medals. But with memories still afresh of the virulent outburst of anti-western fervour, and with protests (sometimes unruly) by ethnic Chinese around the world at the West’s “bias” against China , nationalism will be under anxious scrutiny at the games.” I read that paragraph several times to double check that they did not qualify it by first mentioning the hooliganism of the West as the Olympics torch travelled through their cities. So, it is China that will be judged, but who will judge the west then?

My conclusion about the current international media coverage is that that’s what the international media does for a living. There is nothing unusual about it, and there is no reason for the Chinese people to take the negative coverage as being an affront to their capabilities. In the days leading to the Sydney Olympics, all that the international media discussed was that the Australian government was out-of-pocket from hosting the Games. In the days leading to the Athens Olympics, all they discussed was about whether the Athens government would be able to complete the stadiums in time for the Games. My friend, Senator Paul Sarbanes of Sarbanes-Oxley fame, who is himself of Greek origins, said to me recently “I knew the Greeks were going to complete it on time, it was a non-issue!” So, just because the media makes something an issue does not make it an issue.

Having said that, if the current media coverage shows the imperfections of the Chinese government and the inadequacies of the rule of law in the country, I think it is a healthy thing. I do not think it is a good thing for any government to be perfect. Perfect governments are cruel governments, as we have seen throughout history.

If China was a bit more confident as a country, what they could have done was to beat western sentiments at their own game. For example, apparently there was this minor protest at Tiananmen Square this Thursday morning, comprising three Western religious extremists thinking that they were doing China a favour by praying loudly in public in the square. The correct response if this was any other country, would have been to completely ignore them, and they would have been really furious.

But the Chinese government is its own worst enemy when it comes to handling its own public relations. It was too late in formulating a lousy response to the pollution, it allowed the world to assess its displaced hutong dwellers without offering what might have been a valid explanation from the other side. To say that it is a repressive government is to completely miss the point. It’s not even driven by ideology. Like all large governments anywhere in the world, including the United States, its legions of executives think they can walk on water.

Having so much to say about Beijing and the Olympics, you would imagine that I would have secured tickets for the Opening Ceremony. I was offered tickets two months ago, and I looked at the Birds Nest Stadium from the living room of a friend’s house and said “nah, I don’t want to be anywhere near Beijing during the Olympics.”

But as the days drew closer, and the streets were spruced up, the lights everywhere, hundreds of foreign contractors with the Olympics badge hung around their neck all over town, and even with the security all across town and in the sub-ways, I became caught up in the celebration atmosphere. I started scrambling for Opening Ceremony tickets but it was too late, unless you wanted to fork out $15,000 for a VIP booth. I realised that I had done myself a huge disservice. I should have planned to attend. But I now also think that depending on how the Games play out, I am going to feel different yet again after the Games are over.

I returned to Singapore last night. I timed my departure to coincide with the brand new Singapore Airlines Airbus A380 flight, which they diverted to Beijing from its regular schedules to London and Sydney, in the few days leading to the Olympics. I was not in any hurry to try this aircraft because the fares for the London and Sydney routes were just ridiculous. But here it was, flying out of Beijing on the same day as I was, reasonably priced and I did not know when I would have this chance again.

For all the hype related to the features of the aircraft, once you are inside it, it is just another piece of transportation and the thrill evaporated as soon as I entered the aircraft. It was an incredibly poor consolation prize for not being able to attend the one Olympics Opening Ceremonies that mattered most to me.

But for all its imperfections, China and the Chinese people are incredible hosts. If the Olympics are not about politics and one-upmanships, I can vouch for the innate Chinese desire to treat all foreigners as guests, as better than their own people. For any foreigner to misunderstand this is to completely miss the dignity that the Chinese will bring to the Games in a way that it has never had before.

There are too many fleeting senses, too much information in the marketplace to really think about what the Games should mean to me right now. I think that although Beijing has been preparing for seven long years for this event, the Day itself arrives as surprisingly as a new dawn on the local people. Even my local friends have been as vacillating about first not being there and then wanting to be there. I will be back after the Olympics to continue to be a real part of this city and to come to terms with how the Games may have changed us all. For all its imperfections, there is no doubt in my mind that Beijing has arrived.

Let the Games begin.


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