Monday, March 30, 2009

China's economic stimulus: Acting locally

While Rome was burning, Nero fiddled. Now, while the Obama Administration is working to douse the economic firestorm, politicians and pundits from both ends of the spectrum continue to indulge on petty politics.

At least that’s what it looked like on CNN to someone who was travelling in China—namely, politics as usual in Washington. Pundit Rush Limbaugh even publicly wished that Obama would fail and a good contingent of politicians rushed to prostrate before this idol of babble.

Wishing Obama to fail? “You can’t be serious,” to use the words of a famous tennis idol. There is life after a wrong call by the line judge but I shudder to think about what life is going to be like if Obama does not pull America out of the economic tailspin.

By virtually every account I have read, China is confronting the economic crisis much more effectively than Washington. The local governments are working in step with the central government to stimulate the economy and nobody is wishing that the Hu Jintao government should fail.

The Business Class cabin on the transpacific flight was not even half full, and I was able to buy an air ticket from Wuhan to Shanghai at 70% off list. All the domestic flights inside China I was on were not full. No question, China is also feeling the economic drag of worldwide downturn.

China’s domestic flights would’ve been emptier were it not for tour groups of Chinese. I saw groups sporting identical caps and travel bags at all the airports getting ready to go somewhere. I was seeing a lot of travelers in a normally non-busy part of the travel season.

Beijing’s Wangfujing was busy and full of shoppers. Normally a popular commercial street and tourist attraction, the open pedestrian mall showed no strains of economic slow-down. If anything, the parade of organized tour groups led by guides holding up their banners contributed to a festive atmosphere.

Nearby Tiananmen Square was as full of tourists as if in midst of a busy tourist season. The only difference was that virtually all the tourists were from inside China.

During my short stroll at Tiananmen, I was handed bills advertising group tours to attractions around Beijing. One all-day outing included the Great Wall, Ming Tombs, nearby reservoir, a typical old Beijing courtyard residence, the Olympic stadium and nearby Water Cube (where swimming competition took place), along with assorted brief stops on the way.

For the inclusive price equivalent to US$15, the tourist gets pick-up and return delivery, ride in air conditioned luxury coach, all admissions to attractions, fancy buffet lunch, CD disc of the tour including 36 photos taken by a photographer accompanying the tour guide, a Great Wall “hero” certificate, a pair of “climbing” shoes, and a travel bag. The price represented one-third off the regular price and furthermore, a family of four can go for the price of three.

That was for the deluxe tour. A standard tour of the same list of attractions but a plain lunch of eight dishes and one soup and a tee shirt and cap instead of shoes and bag went for half the price. And, the advertisements advised that the tours will not include any obligatory shopping stops.

I found out that many of the major tourist spots in China were heavily promoting local tourism. Hangzhou, for example, handed out vouchers to their own residents as well as to out-of-towners good for free admission to their seven most popular attractions. The cut rate package tours were apparently the way the Beijing Tourism Bureau was promoting their attractions.

Nationally, Beijing just announced the opening of two new high-speed rail segments, linking Wuhan to Shanghai and Taiyuan to Beijing. There are now 200 high speed trains running at over 200 miles per hours on the national network. The number of trains will quadruple in three years. This development will reduce the time and cost to travel and further encourage tourism.

The local acquaintances I talked to seemed generally optimistic that China will weather the economic crisis. They were more concerned as to how the U.S. will work through their challenges.

I asked my friends whether China will achieve the 8% increase in GDP as publicly stated by Premier Wen Jiabao, they merely shrugged and indicated that those government figures, one way or the other, do not mean much to them. It is how the local economy will be doing that they are watching.

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