Economic Crisis Creating Opportunity for Some?

The economic crisis has hit the US very hard, that's obvious, but for those in China who may not get back to the States much, its hard to realize how bad things really are, though the horror stories online and from family and friends bring it home. The crisis has quite obviously hit many Chinese factory towns, especially places down south like Dongguan or on the east coast in Zhejiang and Shandong. However, in Beijing and Shanghai, despite it being a regular topic of conversation, the reality is that its only seen in small ways (ie less expats at restaurants/bars). For the most part, white collar workers in these cities have gone (more or less) unscathed up to this point.

While companies aren't desperate to hire new talent, they also aren't laying off people. If you are a Chinese law firm these days, the economic crisis can actually serve as a sort of blessing in disguise. There are some rumors floating about that two of the biggest firms have laid off some attorneys, but these firms are heavily reliant on IPO work and that has all but dried up. Yet at most Chinese firms, things are churning along and lawyers are pretty safe (unless you work at this firm but that has nothing to do with economics). For firms that are more diverse, while work is slow for many Corporate associates, they aren't at risk of being laid off and most ended up receiving a bonus and a (slight) raise, not great, but far better than what their counterparts at foreign firms in Beijing and New York are getting.

Chinese firms typically have more limited expansion plans than their foreign counterparts and the top ones can offer the same service quality you would get at one of the biglaw foreign firms in China. The difference is, of course, they charge about half what biglaw firms do and pay their attorneys even less.

Expect things to get a lot worse for foreign law firms in China over the next year or two. While their home offices are in complete disarray, layoffs (or even the threat of them), will lead top associates (often Chinese citizens) to consider making the move to Chinese firms. Hours are similar at Chinese and foreign firms, but there is a far greater chance for advancement at a Chinese firm for a Chinese native, especially one with experience at a top foreign firm. At the same time, clients are bound to reconsider their firm affiliation and make the economic choice by moving their business to a Chinese firm.

The shift from foreign biglaw firms to Chinese firms has been a slow process since the early 2000s and the crisis could be a major blow that reorganizes the legal market in China.


On a Carousel

If you're involved in the online expat scene in China, there are a few people you come to know, very quickly, almost all in a very positive light, but one name has stood out over the years and it doesn't bring with it positive connotations, Chris Devonshire-Ellis. FOARP has the best, most comprehensive introduction of Mr. Devonshire-Ellis around.

The name led to many stories and blogs in previous years, but little has been heard about him lately, though recently he was back to his old ways, threatening the dean of Shanghai blogging, Wang Jianshuo. However, recently it appears Devonshire-Ellis did something unprecedented among bloggers in China and quite possibly around the world.

In his firm's "China Briefing" newsletter, he published a statement from a chummy "interview" with a Chinese government official in which the official makes very remarkable statements about the yuan, the Chinese currency, that, it seems were completely fabricated. China Law Blog has a great look at the whole story, breaking it down with links to other bloggers and some pertinent questions. Though it's doubtful that CDE could face legal charges for his questionable article, whatever connections he has to the Chinese government are certain to be burned. Pretending to be a journalist will get you in trouble in China, but when you do so and it influences the country's currency, I'd expect major ramifications.

This story is causing a mini-storm on twitter and could end up being the expat community's story of 2009, even though the year's only 2 months old.


Too Good to be True?

"Stop the presses!" I hear myself shouting, before realizing this is a blog and there are no presses involved, but that's the kind of story this is to me. The idea that Nike would dedicate US$200 million to the Chinese Super League (CSL), the Chinese domestic soccer league, over a period of 10 years is just shocking.

Just a few years ago, the league went from large companies sponsoring it (and its tournaments) like Siemens, Pepsi, and Midea to no sponsor, then had a British internet phone company sponsor them and pull out shortly into the season. Kingway, the Shenzhen based brewery, was league sponsor in 2007 a decent step up, but then in 2008, they were replaced by small Chinese wine brand Jinliufu. Siemes, iPhox (the British internet company), and Kingway all signed multi-year deals with the league and ultimately pulled out of them after a season (or less).

The nitty-gritty of the Nike deal looks like this:
  • 2009: US$15 million spread between 12 clubs
  • 15% annual increase of that US$15 million
  • eventual sponsorship of all 16 clubs

So what does this all mean? For one, finally some major muscle is coming in and serving as China soccer's white knight. CCTV recently agreed to broadcast CSL games, after having suspended their broadcast last season. The league still has the stink of corruption, on-pitch battles, and walk-offs, but one of the league's biggest concerns over the past 5 years, sponsorship, will no longer be an issue. In the long run, hopefully this will take the Chinese league from general oblivion into one of Asia's premier leagues. While the national team is probably beyond saving at this point, a good run of form by one of the Chinese teams in the newly expanded Asian Champions League would help the league's reputation.

Currently, only 2 of the 16 teams (last year's winner and runner up Shandong and Shanghai, respectively) wear Nike. While it would be expected Nike would want to very quickly re-establish its ties with Beijing Guoan, the capital club will continue wearing Adidas in 2009.

Nike's signing on is a major investment in Chinese soccer, hopefully this will mark a turning point for all of Chinese soccer, though it should guarantee that the domestic league will be improved. The league begins next month, the past two seasons have gone down to the final match, hopefully the same drama (without the negativity) will be seen this year (and most of all, hopefully Beijing will finally be champions!).


Fireworks and Fire

Events turned surreal tonight as amidst all the fireworks that are going off all over our fair city, a fire appeared to break out at the iconic new (and not yet totally finished) CCTV Building. In fact, the fire occurred at the equally odd shaped building just north of it, known as the TVCC complex (Television Cultural Center).

The fire appears to have started around 8:30 pm, though we first heard about it from colleagues in Guomao around 9:10 pm. After raging for an hour or so, explosions started to be heard and the flames were seen reaching many stories in the air, and the whole process came to an end around 11 pm or so. As of right now, smoke can still be seen coming from the area and some are concerned about collapse. All of subway Line 10 is closed and traffic around 3rd Ring Road is at a standstill as police are keeping people away from the building.

Today is Yuanxiaojie, the Lantern Festival, and it is the final day of Chinese New Year festivities, so its marked by lots of fireworks. Fireworks were being set off in Beijing since early in the evening an speculation is that fireworks are what started the fire. Explosions were heard around the scene, but with fireworks going on all over the 3rd Ring Rd area of the city, it was hard to differentiate at times what was coming from the building and what came from elsewhere.

If you aren't on twitter, its time to get on, as the story broke there well before it was seen anywhere else on the web, a full hour before it made it onto Chinese tv. What is there to take away from all of this? First, lets hope and pray for the safety of everyone who may have been in/around the buildings and also for the first responders. Also, be very careful when setting off fireworks in the city (though fireworks policy is bound to change next year). We'll try to bring more if anything develops through the night and especially tomorrow morning.

*Above photo by Wu Lin. All photographs and content are copyright and can only be used with approval of blog editors.


Hater in the House, Part 2

My problem with the New York Times article on the hip hop scene in China (discussed here), is that there's no reason for that article now. There is no sudden love of the music (despite site views) or anything in 2009 that's popping off that wasn't before. More top acts are coming to China, but the audience is almost exclusively expat (just look at the Roots, Kanye, and Talib shows). There hasn't been a sudden large number of hip hop clubs that have opened up, or live local shows going down, there aren't that many underground ciphers or battles that are going on either. Yes, the clothing has been appropriated and the dancing is very popular, but the music is still just a tiny niche.

Let's first get some things straightened out, hip hop contains four elements: graffiti, break dancing, MCing, and DJing. This is something often forgotten or overlooked by those outside the community, all of them are equally important and there's a big difference between that and rap music.

To be honest, all 4 elements have not even come close to entry in China and its going to be a long time before that changes. Dancing came in first and is unbelievably popular here, with tons of crews even in far flung 3rd tier cities and mainstream classes at gyms and even on tv. In Korea, the dancing came with the music, and while the dancing popped off a lot faster, the music slowly caught up to where there are serious hip hop acts, but in China, we're still a long way from that. You do see some graffiti around town, but because of the strict nature of the police, almost all of it is sanctioned or more pop art than the raw tagging that goes on elsewhere (even in Hong Kong).

DJing is another problem, mainly caused by the difficulty of getting top records. Real DJ's use records and the only way to get them is by having them shipped from back home, making HK or Tokyo runs, or bringing them in whenever the DJ (or friends) return home. Most clubs don't even bother with real DJs, they just use computerized mixes or loops, though some "hip hop" clubs will put somebody who fits the "image" of a hip hop head behind a platform with 2 turntables and tell them to pretend to spin for an hour or two, good money if you can get it.

And finally to MCing, well...We're not there yet, we're nowhere near there. The problem, it seems, especially from reading some of the comments to another blogger, is that there is more a desire to make money than stay true to any art form. Groups that have made it "big" (you could mention Gongfu, but they even make Yin Sanr look gangster) do so with feel good, sometimes even pop, lyrics. There are some decent underground acts who've yet to sell out, but the difficulty is in keeping them together because there isn't a lot of money to be had. There are a lot of expats running around who are sometimes involved in the scene back home and trying to promote it here, some of them are highly skilled and doing a great service, others, well...not so much. There's also too much lack of confidence (perhaps that's the right way to say it?) in some artists to perform straight up hip hop music, all too often you get something more akin to Fred Durst-ian rock rap (but in part, that goes to the lack of influences and the difficulty of getting all kinds of hip hop in China).

Then there are the guys who come from government housing, poor families where both parents were laid off, where the father beat them and their mother, who come from failing schools and instead of rapping about this experience, they talk about "gats" and "ho's", although they've never held a gun and are probably still with their high school sweetheart. I'm not making this a call for conscious rappers or saying that they need to be political, not at all, but talk about your own experiences, you are ghetto, you don't need to pretend to be from the (US) "ghetto."

There is not enough diversity in influences, not enough DJ's who know how to scratch and mix, and far too many hangers on and its made the movement stagnant. The minor glimmers of hope you see from year to year quickly dry up and the scene just feels like its slowly lurching nowhere. The dancing has taken off, but it is already completely disconnected from the music. The clothing style is often more about pissing off one's parents than anything else and is so out of tune with current American hip hop style.

However, it's not all negative, there is some decent, pure hip hop if you dig for it. There are people who are serious about trying to make the scene grow and there are people who truly love the music and aren't just in it for the money. 2009's a tough year economically, but do what you can to support the real hip hop acts when they play live, drop some money on a real CD instead of downloads, hit up websites like which are often doing a great service. The scene is paused, its in its infancy, but that doesn't mean it can't grow.


Why the World Cup Not Coming to China is a Good Thing?

The deadline for bidding on the World Cups in both 2018 and 2022 came and went on Monday and to many people's surprise, China wasn't one of the countries that bid. China was widely expected as one of the bidders this time around and would have been an immediate front runner.

So why didn't they bid? While we here were major backers of the concept of a China bid, we've since reconsidered the idea and decided not bidding was best. Why? Well, let's look at some of the reasons that have been put forth:

1. Chinese Soccer Development
There is a feeling among the "highly intelligent" people at the Chinese Football Association (CFA) that hosting the World Cup when the team is still as bad as it is is not a good thing. It's a matter of face and national pride, which is why this belief is shared by the fans. Much like with the Olympics and China's record 51 gold medal haul, fans want the World Cup at a time when the national team will make the country proud. This is a major reason why on a poll, 89% support the CFA's decision. The problem is that 1. China can always host the World Cup again, and 2. having the Cup here could be a major boon to soccer's growth and development in China.

2. the Olympics
No, not Beijing 2008, but Harbin 2018 or 2022. If all goes well with this month's Winter Universaide in Harbin, the city has high hopes to seriously bid for the Winter Olympics (unlike their 2010 bid). It seems the national sports authorities are more focused on this (and building China's winter sports power) instead of focusing solely on one sport, soccer. Also, development of a winter sports program will be far easier than making the national soccer team good. What's the problem with this? London in the UK and Sochi in Russia are already hosting the 2012 and 2014 Olympics, but both bidding for 2018/2022, while Tokyo and Chicago are in the running for 2016 and both Japan and the US are bidding as well. Some even think that hosting the Olympics could be an advantage to sealing a World Cup bid.

3. Money
Yes, we're in the midst of a global financial crisis and China has been hit hard. With the Olympics debt yet to be paid, adding a World Cup burden on top of that could be a bit much for the country to handle.

4. Venues
This is the final one and, to me, the most important of the 4. China simply isn't prepared to host. China only has 3 soccer specific stadiums (in Tianjin, Shanghai, and Chengdu), but all of them have a capacity of less than 40,000, the minimum to be used in the World Cup. In China, there are beautiful new stadiums in Beijing, Tianjin, Shenyang, and Guangzhou and all would likely host games, however all (and an older one in Shanghai) are surrounded by running tracks. In fact, I'd venture to guess that almost every stadium in China over 40,000 is a multi-use stadium with a running track, keeping the fans far away from the field. Therefore, either a lot of new stadiums (which would undoubtedly go unused or make older ones redundant) would need to be built or the fan experience would be severely lacking.

It would be great for China to host the World Cup, especially because it may be the only way China gets into a World Cup in the next 10 years, and while soccer needs to be developed here, the CFA made the right decision in not choosing to bid for the 2018/2022 World Cup.


The Law is the Law Except When its not the Law

The Labor Contract Law (I almost introduced it as new, but after more than a year, can it still be deemed as new?) was supposed to be the big 'un when it came to promoting worker's rights in China and keeping business behavior in line. There were lots of expectations and tons of blog posts written on the issue, but as can happen with Chinese law issues, things turned out very differently from what was originally expected.

Chinese law is a hell of a thing to deal with. Laws like the Labor Contract Law are written in an incredibly vague fashion, usually purposely, to allow for provincial and city governments to then interpret the law in a way that most fits their local situation. Basically, Chinese law serves as a US Republican states righters wet dream. Unfortunately, this often means that the local government is free to "interpret" the law in a way that completely removes it of any fangs (and usefulness) it may have had.

Dan Harris wrote a bit about how the economic crisis may have led to local governments ignoring much (or all) of the labor law as long as companies don't lay off workers and I've heard stories that confirm what he's stated. Over the Chinese New Year holiday, in the hinterlands of Beijing, I heard a number of tales that further confirms why any hope that the law would change things should go by the wayside.

Getting away from my friends who are all city folk white collar (often foreign owned) company employees, I heard countless stories from airport baggage handlers, factory workers, cooks, and other laborers about how the law is an afterthought. Out of about a dozen people, only two were not expected to work during the holiday and of those that had to work, none expected the trebled overtime pay that the law called for (though some did expect to receive some overtime pay). In many cases, the company's distribution of small gifts or food before the New Year was supposed to satisfy employees instead of their deserved overtime pay. All knew that this was against the law and that they could make claims, but all had seen what happened to others who made claims or were convinced the process was futile.

One year on, the "groundbreaking" law doesn't seem to be protecting the people who needed it the most.


The Strange Story of Bonzi Wells

Two other sites have picked up the story of Shanxi Zhongyuan releasing Bonzi Wells, who returned to the US during the CBA's Spring Festival break. This move is a bit shocking considering Wells has been incredibly helpful to his Shanxi team, instantly dominating the league and breathing life in an otherwise mediocre team. Wells was near the top in points, rebounds, and steals per game, but only was able to help his team to a .500 record during his time in Taiyuan.

So why was he let go? Very little information has come out on the release, but that's not surprising as so few people care about the CBA. Despite Wells being a force for Shanxi, the team was 8-7 before he arrived and 7-7 while he was in China. Was the release inspired by the fact that despite the large sum of money they were paying him, Wells couldn't improve the supporting cast around him? Or, a more cynical (or sinister) thought, is it because of Wells' immediate impact on the league, exposing it for the joke that it is? The CBA is already dominated by foreigners, you'd have to go almost 20 names down to find the first Chinese players name on the points per game list, and the sudden appearance of an aging and out of shape mediocre NBA player suddenly becoming Michael Jordan might have been a little too much for league heads to take.

There's sure to be an interesting story behind Wells' release and I wouldn't expect his team to be very forthcoming, we'll just have to wait for someone to get a comment from him.

UPDATE: The story is simple, seems Wells just didn't want to return to China, less than 2 months was more than enough, and if you want to know why that might be the case, check out this interesting post by Gabe Muoneke, the CBA's leading scorer.