China Boy

I’ve made progress this week, the blanket of snow covering Beijing on Monday being a good omen by legend, as it brings water for the crops in spring. In the first working week of the Year of Dog I have learnt about the myriad laws for company incorporation, rented an office in downtown Beijing and been given an insight into who survives in Beijing, who thrives and who simply walks away.

Monday morning began my education into the labyrinthine legal maze facing me in setting up the company here. Essentially my decision is between setting up an FIE (Foreign Investment Enterprise) as either a Representative Office or Wholly Owned Foreign Enterprise (WOFE). As far as I can understand, they key difference is that the Representative Office cannot function as a stand alone entity, unable to invoice or receive payments from a client. It is taxed 10% on its expenses, and staff have to be hired through FESCO or another government linked employment agency. The real benefit is that there is no need to bring cash into China. The WOFE functions entirely as an independent business with all the rights that gives, costing between US$5,000 and US$15,000 to set up. A function of currency controls, the WOFE must have a stated working capital and this money must be brought into China and registered with SAFE (State Administration for Foreign Exchange). Four consultants later and I am confused whether I need to commit RMB100,000 (US$12,000) or US$100,000 to ensure that my license for a WOFE would be approved. Each consultant had differing stories of which amount would ensure success with the up to 14 ministries that need to approve a business license application.

Pondering the legal entity I was able to be more decisive when it came to committing to an office. I was sold on Unit 0504 in block 10 of Jian Wai SOHO, one of 20 blocks designed by Japanese architect Riken Yamamoto. However, when I told Tina, the rather capricious agent, she said it wasn’t available. Why take me to see a unit that’s not available At 136m2 for RMB8,500 (US$1,620) it is US$7.92m2, less than a third of what the most expensive accountants, Dezan Shira, spend and half that of the cost conscious Mr Lee of Lee & Lee, and so I believed the 5^th level unit in this centrally located complex represented good value. The deciding factor was the decking area that meant we could sit outdoors – unique to the 5^th level and a feature I haven’t seen in any other offices. Body language is universal, and as I sat determinedly in the sumptuous red chair of the Jian Wai showflat, Tina understood that it would be prudent to find the owner, prising open her clam shell phone and securing in principle agreement. By Thursday I had signed the bi-lingual rental contract provided by SOHO management corporation with the young track-suited owner Li Xioalin, and handed across RMB2,500 (US$312) as a deposit – the maximum ATM’s will give out per day.

Excited, I went to Centro in the Kerry Centre, the informal second board room for many expatriates, and met with Americans David Wolf and Kristian Kender. I asked David, a commanding figure with a capacity for facts, figures and over 10 years living in China what would be his advice to me, a China apprentice, “retain your sense of intrigue and remember that you don’t ever know it all.” As we drank Australian red wine listening to the American jazz singer in the Hong Kong owned bar at the epicentre of one of the fastest changing societies, it seemed sensible enough advice to follow – a week of exploring the legal complexities, viewing real estate, and trying to figure out how to see my blocked blog, had left me fairly worn out.

I dedicated my Friday afternoon to regaining some of my lost fitness – for I have realised how this relocation has dislocated my appetite, sleep patterns and ability to ever feel less than tired. I checked out Bally’s^[1] Gym in SOHO which included full facilities and a pool for RMB5188 (US$648) per year and then had a trial work out at Evolution – I was entitled to a free session for buying too much coffee at Starbucks.

Friday evening was spent putting back the calories as I celebrated Rob & Sarah’s birthday at a new and unfeasibly small Mexican bar called Saddle. Amazingly I bumped into two people that I had studied Mandarin with in January 2004 at BCLU – a French girl whose affinity with Beijing is expiring and an ABC (American Born Chinese) lad called Patrick who was most obviously in his element. Beijing, with all its dirt, spitting, pace, and need to be wary of all things, can be both a safe port and purgatory.

There is no doubt that IKEA on a weekend is like Dante’s inferno. Starting with Circle One – Those in limbo asleep on anything that doesn’t move. Circle Two – The lustful after the specials in the ‘sale bin’. Circle Three – The gluttonous who had second helpings of the Swedish meatballs in the restaurant. Circle Four – The hoarders who tucked towels under their arms. Circle Five – The wrathful who got frustrated at the silly Swedish names of everything. Circle Six – The heretics who tried to leave by the fire exit even though the sign said it was alarmed in every conceivable language, and Circle Seven – The violent trying to leave the crushing pay queue. Circle Eight – the fraudulent who came without any intent to buy; that was Rebecca and I as we couldn’t handle the inferno.

In one way IKEA is a microcosm of China – where modern retail meets Chinese reality, a place of real consumption and aspiration. SOHO, owned by a Chinese, designed by a Japanese, rented by an Englishmen and furnished by Swedes, may be an indication of how quickly there may not be such a simple figure as a China boy. How exciting is that!

Nearly as exciting as going to Rebecca’s art gallery opening this evening stylishly named, ‘88 Art Documents Storehouse’ in Feijia Village. There I met many famous artists including Tong Zhengan, but I fell in love with the China boy paintings by Yao Junzhong (sample at top of article). The art scene in Beijing is vibrant, exploring issues of modernisation, romanticism of the past and wrestling with the moral distraction and attractions of commercialism.

Writing from his hotel room in a very different city, Montreal, a good friend Keith Mitchell wrote to me in response to Brittle – and I wanted to share this verse. There is a poet in us all.

China Boy

I wonder, why?
Approval? Never!
Excitement? Maybe.
Adventure? Probably.
Challenge? Certainly.
Pretending with extravagant visits.
Satisfied with collecting stamps.
Fear is our leader.
But his defeated opponent.

That’s all for this week:

Man Zou (慢走) – which means literally walk slowly, or take care.

Great Expectations

Sitting in the grandly named Metropolitan, unit 10-A, that lies outside the fourth ring road of Beijing, I am listening to Handel’s Messiah enjoying the uplifting score after my first week in China that was marked by missing Singapore, skiing, my first car crash, and some cynical conversations about China.

I will only permit myself one cathartic sentence to say that leaving Singapore has not been easy; my wonderful friends, the super team at EASTWEST, balmy weather, riding my scooter in shorts to the driving range, and sheer ease of life, have all been missed. As it was my decision to set up an office in Beijing, I can give myself no sympathy but have tried this week to stay committed to my vision for leaving my home of 10 years on the eve of my 39th birthday, arriving at dawn on the 25^th January, to start a new company in the biggest potential market on the planet.

One of the fastest growing markets in China is leisure, with China becoming the fourth biggest tourist destinations, and also a fraction of its own population enjoying leisure time. In my first week I’ve been skiing twice to different resorts. My expectations were high when Carly and Mary Jane told me about Nanshan, one of 200 ski resorts in China, and we hired a Hyundai elantra and driver for RMB600 (US$72) to drive us 1 ^1/2 hours north of Beijing. The car park was filling up with Audi’s, Hyundai, and Toyota’s containing passengers able to spend RMB340 (US$42.50) to ski[1]. The confusion was inside where the Chinese practice of having multiple people for one function was in evidence – buy a ticket from one person and have it checked by another a few feet away. Luckily for Carly she was able to rent the entire ski outfit too – another indication that this wasn’t St. Moritz. A good friend of mine, Steve, had refused to come skiing because of the appallingly high number of accidents on the slopes – Chinese ski as they drive; into one another without indication or brakes.

On Friday my cab driver duly looked left as we crossed a 4 way no stop junction and the other driver looked right – both entirely neglecting to look at the direction of on-coming traffic. I did – but my Mandarin doesn’t extend to ‘that big car is going to hit us’ – at least not quickly enough. Both drivers got out and proceeded to light smokes without remonstration, which surprised me, and within minutes the roads on all 4 sides were backed up as other drivers drove as close as they could for a look. Somehow it is like the cars arrived but the roadsense gene, like the enzyme for processing alcohol, just doesn’t exist in Beijing drivers.

I was on my way to meet Marianne Freise, a German lady who has lived here for 5 years and used to run a large PR firm. Marianne has been kind enough to share some information about the competitive PR scene here, not least the practice of giving a Hong Bao (red packet) with cash to journalists when they come to an interview or conference. She passed me also details of a lawyer and I spent a happy day emailing lawyers and accountants to set up appointments to learn about company incorporation here. It felt good to be slowly starting the wheels turning and piecing together the costs for legal, staff, accommodation, taxation. The main anxiety of course is not the cost of setting up the business, but rather getting the clients.

It has been my vision, or theory, that all eyes will focus on China until the Olympics are over on August 24^th 2006. Certainly when I turned on my TV this Sunday morning to CCTV 9 (the only English language channel available without cable) a songstress was singing “I love Beijing, I love China, I love the Olympics, I am in love” and so it seems to me that China is as excited as everyone else. I want to help people make the most of the Olympics – and I believe I need to be here to do that. The questions to answer this week will be:

a) Legal form the company will take – Wholly Owned Foreign Enterprise or Representative Office.
b) Size and location of office – knowing that Chinese staff choose a company partly on the prestige of the location.
c) Size and location of the apartment – knowing that Beijing traffic can be, quite literally, bad for ones health.

The question on the lips of the mates I had a beer with, while watching England thrash Wales in the 6 nations match on the South African channel, was how in favour China will be after the Olympics. My own naivety was crushed on Wednesday when, after only a week on-line, my blog and the entire wordpress.com blog publishing portal was blocked in China. ‘A nice little business in China” – is viewable from everywhere except from where I am. Marianne was telling me of having emails sent by her firm to a lawyer entitled “legal disclaimer” being returned to her with a “get out of here” remark. Her lawyer didn’t ever receive the email. I am reading a book by Gordon G. Chang[2] entitled “The Coming Collapse of China” and it depicts an authoritarian regime desperately holding onto power and attempting to assuage the rural poor, reconstructing the bankrupt financial system, while maintaining a face of calm composure to the outside world.

I am not sure that I have maintained a calm composure myself this week, in a darkened dry moment getting out my Treo and tapping ‘Brittle.’

I’m brittle. Beijing.
Shaving blades scratch and slash
My nose bleeds
The dried blood never leaves
Early or late to bed
My burning eyes always China red
In the Beijing dust lies the future and the past
Brittle Olympian, I will last.

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[1] Bear in mind average income in China is still only US$4 per day. Rob told me that at the same resort the local peasants had barricaded the road previously demanding monies be paid to them by the resort and it’s patrons.

[2] Isbn 0-09-944534-4