Raoul Pal: Beijing more impressive than Tokyo, newer than Shanghai.

I was recently skimming through the book "A Great Leap Forward?: Making Sense of China's Cooling Credit Boom, Technological Transformation, High Stakes Rebalancing, Geopolitical Rise, & Reserve Currency Dream".

The book is actually a collection of essays on the Chinese economy by different analysts. Some of it is pretty interesting. But then I came across the essay "There's Something Wrong in Paradise" by Raoul Pal. The author is an esteemed American financial analyst, and the founder of an elite global macro-strategy and consulting service. Clearly nobody's fool. His analysis of China's economy has its worth. The introduction to his essay, however, is based on his personal visit (or perhaps even multiple visits) to China. And that's where it becomes very clear that he has no real knowledge of the country and what it's like. 

First the author goes on about how China has the feel of a "liberated country", with domestic package tours everywhere full of "happy smiling faces" and "excited mannerisms". He adds that if you just go to a local bar on a Saturday night, you can apparently see that there is no turning back for the government, because the Chinese are "having way too much fun testing their newfound freedoms". I can understand people writing this stuff in the early nineties, but in 2015?  

Then comes a passage which made me cringe:

"Most of you will not have been to China and those that have will be stunned how quick its still changing. Beijing is a brand new City. Essentially give or take a few buildings it was built from scratch. It looks stunning. There are wide shopping streets with Starbucks, Esprit etc on every corner. Think Tokyo but more impressive, more technology, more mobile phones, more shops. Think new roads, new cars, new bridges, new flyovers, new skyscrapers, new houses, and new apartment blocks. Everything is made of the highest quality. In fact it's hardly an emerging country at all. It has arrived. 

Shanghai is a more traditional Asian city, older, more chaotic but it happens to be the size of Tokyo and looks sort of like KL or Bangkok. Again lots of technology, amazing buildings and busy, busy people."

To anyone familiar with China and Beijing, this description comes across as incredibly inaccurate. The passage is really just a testimony to Beijing's ability to impress visitors on business trips, and leave them with an overwhelmingly positive and completely inaccurate impression of the place.

"Beijing is a brand new city. Essentially give or take a few buildings it was built from scratch." First of all, Beijing's city centre is still full of Hutong dating back at least a hundred years. They are the one thing which gives the city colour and character. But even in the rest of the city, there are still lots and lots of decrepit apartment blocks built during the Mao era. They would hardly qualify as brand new. I would say that the fancy new housing blocks, although plentiful, are still in a minority. 

"It looks stunning. There are wide shopping streets with Starbucks, Esprit etc on every corner. Think Tokyo but more impressive, more technology, more mobile phones, more shops." This guy obviously never left the admittedly impressive Central Business District and the shopping malls in Chaoyang. Most of the city is hardly like that. Much of Beijing outside of the city centre consists of pretty ugly and uninspiring concrete jungles without any Starbucks or Esprit in sight, although I will admit that you can find a McDonalds literally on every corner. And let's not even talk about the more slummy areas where the poorest migrant workers collect. More impressive and technological then Tokyo? That's a huge stretch.

"Think new roads, new cars, new bridges, new flyovers, new skyscrapers, new houses, and new apartment blocks. Everything is made of the highest quality."  Everything is made of the highest quality? It's true that Beijing has some impressive new roads, subway lines and skyscrapers which are nice to use and work in. But just like everywhere in China, it is also full of shoddy, low-quality construction. Even some of what looks new and shiny turns out to be made to pretty low standards on further inspection. 

In fact it's hardly an emerging country at all. It has arrived. Suddenly Beijing represents the whole country, which is "hardly an emerging country at all". Perhaps he'd like to travel outside of the few major cities a little bit? 

"Shanghai is a more traditional Asian city, older, more chaotic but it happens to be the size of Tokyo and looks sort of like LK or Bangkok."  This is also highly inaccurate. Shanghai is a more traditional Asian city? Older, more chaotic? Anyone who knows the two places will tell you the exact opposite. Shanghai may have some old European buildings in the center, but it's not older then Beijing, and it's most certainly not more chaotic. In terms of traffic, transport and general urban planning, Shanghai is actually far less chaotic and more livable then the capital city. It also feels less traditionally Chinese, whatever that may mean. 

In fact, what really distinguishes Beijing from cities like Shanghai or Shenzhen is that it preserves some cultural and historical heritage, and a bit of genuine local character. But more modern and newer? No way.

Goes to show how unreliable even smart people's impressions of China can be.

Beijing's Central Business District skyline

A typical hutong street scene