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Holiday Time in the Dragonland May 2000 China looks inward on ways to spur spending amongst its population by creating long holidays and promoting local holiday destinations. How China adjusts to foreign enterprises. Back to Awakening Dragon Index
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 40 Million Road Runners
40 million was the official figure of the number of Chinese trying to get to their holiday destinations during the 7 days of extended National Day holiday to celebrate the 50th anniversary of the establishment of the People's Republic of China on October 1, 1999. Unofficially, during the recent May Day Week, the number was estimated to be 1.6 times of the National Day last year - 50-60 million holiday makers conservatively. That makes for a rather interesting volume of business for a variety of enterprises. Certainly, all planes, trains, buses, boats, hotels, and tourist spots were packed to seam-bursting level. I had to cancel my plan to stay overnight in Hangzhou on my way back from China's newly found "Little Grand Canyon" in @estern Zhejiang during that 50th National Day Celebration because I could not get any hotel room in Hangzhou. Trying to get a table in one of the food shops near the famous West Lake in Hangzhou required both patience and tactful diplomacy with the restaurant's captain. The shops selling the familiar tourist items were so heavily jam-packed that you would wonder whether they were handing out something for free. In short, an unbelievable flow of people and a gay spending mood!
Unlike the people of the troubled Southeast Asian nations who were typically deeply indebted due to over investment and overheated speculation, Chinese people have been holding back on their 6 trillion Yuan RMB aggregate savings causing a steady decline in both retail prices and consumption during the past three years. Following the 7 +_1 Scheme** to stimulate spending, long holidays are the latest of the Chinese government's attempt to reverse the ongoing deflationary tend by stimulating holiday related domestic consumption. (The 7 +_1 Scheme** is ab an attempt to encourage the citizen to either invest or spend their savings. The Chinese government reduced the interest rate on saving accounts 7 times plus, and announced the taxing of interest income from the saving accounts in 1998-9)
Having endured numerous economic and political hard times during the past 150 years, Chinese people have developed a cautious attitude toward saving. They would put their treasures away at any slightest sign of trouble. Thus, when the economy began slowing down due to the government's curbing of the overheated economy, people suddenly stop spending. When the government began shutting down inefficient state enterprises and laying off excess workers people become even more cautious. Thailand's investor - the C.P. Group - had felt the unmistakable sign of spending conservatism since 1997. It had to scale back on its animal feed investments in China because people suddenly consumed less meat causing the sluggish trend in animal feed businesses.
I arrived back in Shanghai from Bangkok on April 30, 2000 only to discover for myself that I had an entire week of unexpected holidays starting from May 1 to May 7. Officially, most government agencies and businesses worked on Saturday and Sunday April 29 and 30 in order to swap the days off with May 4 and 5. The Chinese government had also announced a three-day national holiday from May 1 to 3 to celebrate International Labor Day. Most government agencies and businesses therefore were closed from May 1 to May 7, another 7-days of holiday for most workers. There was also another working day swap this year to give most people 10 days of holidays during the Chinese New Year in February. Therefore, the May Day work-day swap to create another long holiday is the third within the past seven months. The results of these "long holidays" must be quite satisfactory, because the same practice was repeated with rather high frequencies!
Checking with my young Chinese friends, I discovered that a typical young Chinese graduate, two years out of college with a full time job would be prepared to spend 500 to 1,000 yuan RMB or more to enjoy one of these long holidays. Those in the higher income bracket would spend more. Multiplying the spending by the 40-60 million Chinese roaming their own land on this holiday, this should have contributed significantly to the expected GDP growth figure of 8.1% in 2000. One just can't help imagining what Alan Greenspan would have done if he was in charge in China!!!!!
It has been an established customary practice in China that the three important holidays of the year--Chinese New Year, May Day, and National Day-have been the most popular wedding dates for young couples. According to the labor laws, Chinese New Year would attract 3 days off, two days for the National Day celebration, and one day for May Day. Now, with the extended holidays, the brides and grooms and their families no longer have to submit a request for personal leave. The long holidays also enables friends and relatives from afar to attend the weddings. Again, the costs of the wedding with the banquets, gifts and attires would certainly boost the domestic consumption quite significantly.
Actually, those long holidays are only part of the planned development of domestic tourism to develop what is known as "The Latter 3 Economic Activities." Anticipating rising income levels and in anticipation of people's needs for the future, the development of the latter 3 economic activities relate to cultural, educational, and sporting activities. Tourism is considered an essential part of the cultural activities. Anticipating the great potential of spending in order to give oneself or one's offspring some headway in this ever-advancing competitive world, educational enterprises are expected to attract huge domestic and foreign investments in order to help satisfying the learning thirst of the world's oldest and biggest "learning culture", China. As far as the trillions of dollars spent on sporting enterprises, China also expects to attract huge domestic and foreign investment in the areas relating to sports.
In order to be consistent with international labor practice, Chinese labor laws have included the requirement for employers to allow annual paid holidays according to employee's service years. In addition, it is hoped that these rotating holiday-makers would help tourist attraction achieve a smoother inflow of income. During the past few years, at least 100 theme parks have been set up along the 300km stretch from Nanjing to Shanghai, only to go bankrupt very quickly. Of the very few that have managed to survive, the operating results have been well below healthy levels. Thus, it is hoped that paid holidays for the employees will help prop up some of these businesses and provide increased employment opportunities.
"You must have been to all the places in China!" was the comment by many friends and strangers when they learned that I have been in China for 10 years. In fact, I could begin now by visiting one of China's cultural and historical attractions everyday for the next 20 to 30 years, and still would only manage to cover a small part of them all. Being raised in a Chinese family and educated with Chinese history and culture for a dozen years, I still find myself awed and surprised by what I see at various places in China. I am sure even those Chinese-born in China are in the same position. Therefore, they would never run out of places to go and things to see in China. This could partly explain the 50 million roaming travellers, so eager to see more of their own history and culture during the long holidays.
Few countries have as vast a land and as long a history as China. The near 5000 years of recorded history with hundreds of emperors and empresses and thousands of architectural, engineering, and cultural sites that they have left behind are destinations that millions long to visit. These are in addition to the countless natural travel resources.
"Travelling 10,000 km is like reading 10,000 books." This old adage from China could have been a result of or a cause to Chinese people's interests in travelling. Those in the south such as Guangdong, Fujian and Zhejiang long to see the capital city of Beijing and the Great Wall in the North while those northern Chinese in Beijing, Tianjin, Qingdao, would be delighted with the chance to visit the sea food-rich southern cities of Shanghai, Ningbo, Xiamen, or Guangzhou. The Shanghainese would love the opportunity to visit the mountainous Sichuan or the Subterranean Army of Emperor Qin-Xi's tomb in Xi'an. Those Sichuanese 1600 km from the sea coast would welcome a glimpse of the real sea on the coast line while visiting the Putuoshan, the legendary birth place of the Goddess of Kindness, Guan Si-Yin. For those with a higher budget and a more adventurous instinct, a visit to the scorching mountain of Talifu in Xinjiang, or a trek along the Great Silk Road would be on their itinerary. Yet we still haven't mentioned the world famous Suzhou-Hangzhou, Kunming, Guilin and Huangshan! If nothing else, China is the world's unmatched No. 1 country in terms of travel attractions by far. It must improve the organization and management of these reources in a hurry however, to attract that tidal wave of visitors sooner rather than later.
To a great number of foreign visitors to China, especially during the early opening-up years, most of China's tourist attraction sites still left much to be desired in their organization and management. This 1,000 year old colorful and elegant tower stands on the river bank in the city of Nanchang. It is one of the three most famous towers in Chinese history. Caught by its beauty and awesomeness, I couldn't help paying it a visit at the first possible occasion after being posted in a joint venture in Nanchang. The organization and management of this precious tower, however, leaves much to be desired. Casually, I made an approach to one of the administrators at the tower. "Could I be granted a concession to organize and manage it?", I asked? I would have promised to make it an even more memorable and interesting attraction for visitors.
Built to ward off foreign invaders, the Great Wall today attracts rather than repels foreigners. People visiting it wonder whether they could see all 6,000 km of it. Restoration and maintenance of all 6,000 km would be mammoth task, but would be an interesting investment.
I am sure that the Chinese government fully realizes the need to improve the organization and management of its vast cultural, historical and tourist resources. The sheer number and size of each of the sites would put the costs of improving them at a prohibitive figure. If the Chinese ever open up some of those for investment by qualified foreign investors, that could help speed up the improvements. I am quite sure they will.
An American writer once wrote, apparently reflecting some unpleasant experiences of some foreign investors in China, under the golden arch of the Big Mac in Beijing, "at least, you know exactly how much to pay and what to expect". Sitting in a packed McDonald's outlet in one of the most fashionable districts in China, I suddenly recalled that quote. I was giving myself a short break from strolling the street to observe those merry-making Chinese friends on holidays. Looking up across the aisle on another table, a young mother was giving her baby the first taste of ketchup on french-fries. The baby might have already been hooked on it as he seemed to demand more as soon as he finished one. The father tried to calm him down and be patient while the mother was getting him another one. At another table, a granddaddy was biting away at a "Big Mac" while the granddaughter grabbed her ice cream and joined the crowd of youthful fans in front of the display case for the Millennium Collectibles. Nearby, an apparently uncompromising grandma sat crossing her hands in front of her in a slight air of resentfulness watching the mother enjoying her "McFish" with her daughter. Refusing to touch any of the offerings from the two younger women, she occasionally uttered something, possibly, some advice on hygienic nutritional food! On the wall was a map of the approximately 30 McDonald's locations in Shanghai city. As I scripted my note, a couple politely asked me whether they could take the seats from my table because there were no other available seats. As, I got up, another 4-5 year old was dragging the grand parents in from outside pointing his little finger all over the neon-lit menu. Observing the youthful workers, mostly part-time workers who are still in school, all I could say was that there were no obvious differences in their conduct and manners from McDonalds' in Thailand or in the U.S. This would answer the concerns of many potential investors about the human resources in China. With training, they can be as good as the best troops anywhere else in the world.
Here are some of the questions that I have often been asked about China along with my typical answers. Will there by a devaluation of the RMB? Nope, not within the foreseeable future. Why? China has nothing to gain and everything to lose by the devaluation of the RMB. Will China's entry into WTO cause more American unemployment? Again, unlikely. Americans should be thankful for cheap Chinese labor and affording them the many basic necessities in their daily life at a cost American labor would not acceot even 30 years ago. Chinese imports are taking the places of the imports formerly coming from Taiwan, Hong Kong, Japan, Korea, and other emerging economies, not competing with American products, and thus not displacing American labor. Can you find good English speaking employees in China? Certainly - if the pay is right. In fact, the youthful Chinese are catching up on English so quickly that expats like myself are in danger of unemployment very soon. Is it true that public toilets are very dirty in China? Please refer to my previous article for full answer.
If after a 100 million USD investment in China, suddenly a method of Multi Level Marketing worldwide was banned, what would you do? After spending years and hundreds of millions if not billions getting into the market, suddenly, a product is announced on TV as having "unacceptable standards." followed by huge demands for product returns and refunds. What would you do? If the import duty rate levied on your product prevents many Chinese consumers from buying it in the next 100 years, what would you do? Looking at the compiled list of relevant and related government departments and officials for your ambitious business plan in China, your problems now are, where to go, who to see, how to get to see the right person and, what would you tell them to convince them of your plan? Anyone in business knows that what you need now is someone to guide your navigation in that vast sea of government departments and officials and to help with your strategies to get the most satisfactory results. In some countries they might be called lobbyists, Washington Lawyers, soothsayers, etc. In China, these professional people are known as "Government Public Relations Specialists". These PR professionals know their way around and what they are doing. They are capable of doing some of these apparently complicated tasks with great ease and fluidness. For example: An entourage of senior management from a foreign firm participating in a trade exhibition in China for the first time with the prospect of moving further into China business was able to meet all of the senior, relevant and authoritative officials that they needed to during their short visit in Beijing. Their contracted PR professionals in Beijing made all the planning and arrangement for them. A foreign confectionery manufacturer was able to gain prominent or better PR exposure than the official major sponsors during an international game in Beijing while spending much less. Another foreign food manufacturer was awarded the "health food" certification in half the time and 25% of the budget of their competitors. A major foreign advertising agency was able to register a majority foreign-owned joint venture advertising company in China.
The term - "public relations" has a unique meaning in China. In next month's article, our guest author will be an outstanding public relations specialist, Ms Margaret Ya-fei Yu. She will let us know how public relations professionals carry our some of their apparently "impossible missions." She will also discuss the typical functions of the top public relations firms in China since the word "public relations" was officially adopted in China in 1984. Piset
Wattanavitukul | Piset Wattanavitukul is Managing Director of P. W. Consultants specializing in Investment, Management and Trade in and with China and Human Resource Development in Shanghai and Ningbo.
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Management of Tourist Attractions
An awesome breath-taking view of the Great Wall
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