Lost on Planet China - J. Maarten Troost [56]
If you ever happen to find yourself on the fifty-sixth floor of the Jin Mao Tower, make a point of wandering toward the middle of the floor, where you’ll find a lobby-type bar and a bunch of tables thoughtfully spread out to give businesspeople—and they’re all businesspeople, mostly of the male persuasion—enough room to conduct deals and discuss strategies without having solo travelers in jeans eavesdrop on them, and then cautiously look up. And I do mean cautiously if you are at all susceptible to vertigo. Here you’ll find a staggering thirty-story atrium, and if you’re unprepared it’s very possible to feel a sort of reverse vertigo, this sudden overwhelming awareness of an immense void. Sort of like being in a Star Trek movie, but with better lighting. Then, if you’re curious to know what weeks of nothing but vividly flavorful Chinese food will do to your taste buds, head on over to The Grill, the hotel’s Western restaurant, where every seat offers a window view of the shimmering city beyond the glass.
The restaurant was filled with businesspeople—Chinese, American, European, Japanese, Arab—and sitting in an opulent restaurant in bustling Shanghai is to be reminded of just how much money there is sloshing around China today. The government is sitting on a roughly $1.4 trillion reserve, and if you think China is just going to idly rest on a big pile of dollars while the U.S. government does everything possible to depreciate the dollar, you’re wrong. The Chinese government started a sovereign fund, and in its first big move bought a stake in Blackstone, the private equity firm, which together with hedge funds is representative of the parts of Wall Street that have gone feral. They did this not merely to make some money—which they haven’t since share prices in Blackstone have tumbled more than 50 percent—but to learn how the sharks operated in international finance, which is an interesting skill set for the Chinese Politburo to learn.
Of course, it’s not only the government that sits on wealth in China, though they do have their hands in an awful lot of it. There are now more than a hundred billionaires in the country itself. And it’s no wonder. Forty percent of all goods imported by the United States comes from China, and the United States, of course, is hardly China’s only customer. More than $500 billion of foreign investment has found a home in China, and it has finally become the massive consumer market that businesspeople have been salivating over for decades. There are more than 500 million cell phones in China, and it’s now the second-biggest market in the world for cars. Ditto computers.
And there are stock markets. Two, to be exact—in Shenzhen, near Hong Kong, and Shanghai. The Chinese, among the most prolific savers in the world, have more than 17 trillion yuan in household savings. Investors, however, are permitted to invest only on the domestic exchanges, which they do with manic glee; 69,000 people open brokerage accounts per day in China. Indeed, pawnshops have even started accepting houses and apartments as collateral for loans. The thrill of investing has become so pervasive that the government had to pass a law making it illegal for high school students to invest in shares, which they’d been doing with about the same measured restraint typical of sixteen-year-olds everywhere. But you can hardly blame the Chinese for throwing everything they have into the stock market. In 2007, the market rose 97 percent. In 2006, it rose 130 percent. Few markets in the world have ever approached the gains of the stock market in China.
Real estate, too, has experienced a similar manic appreciation. “Do you see that building there?” said the waitress, pointing at an apartment building far below us. “It’s more than 20,000 yuan per square meter.”
“Really,” I said, mulling the Tuna