Chinese are just like New Yorkers. They can't stop talking about real estate.
In Shanghai, which is China's New York, locals and expats are doing their best to foist American-style consumerism onto China's rising masses—with mixed results. Starbucks has opened several hundred stores, even though China has no coffee-drinking culture to speak of. As it spreads into China, Toys "R" Us is trying to convince higher-income Chinese parents that toys are a part of a childhood, not a distraction from preparation for the all-important national college entrance exams. Dickie Yip, executive vice president at Bank of Communications, lamented that 80 percent of the 11 million Chinese people who have opened up credit card accounts with the bank pay off their accounts in full every month. "We're encouraging our best customers not to repay," he said.
But there's one distinctly American habit the Shanghaiese seem to have picked up easily: talking about money, profits, and real estate prices without self-consciousness. I'm traveling in China this week and next with a group of American journalists. And we were instantly schooled by our interlocutors on the divide between the political capital (Beijing) and the financial capital (Shanghai). Beijing is all about politics, analysis, debate. In Shanghai, it's all pragmatism, getting things done, and making money. "To get rich is glorious," as Deng Xiaoping famously said. *
As in New York, real estate in Shanghai is a topic of near universal conversation. And as in New York, those fortunate enough to acquire property in the 1970s have done extraordinarily well. We visited the home of the Gao family on the 31st floor of a tower in Hongye Gardens, a 2004-vintage 12-building complex of high-rise buildings cleaved by gardens, fountains, and a children's playground—the sort of thing you might find on the Upper East Side of Manhattan. The parents, in their 50s, are both longtime employees of Shanghai's public bus company—the husband a middle manager, the wife a retired laborer. Their daughter, Yang Gao, a recent graduate of Fudan University, is going to start work at Ernst & Young next month. They were happy to share details of their personal finances. The Gaos were given the opportunity to buy workers' housing elsewhere in Shanghai very cheaply a few decades ago. That apartment, which they still own and rent out, has soared in value. The apartment in which they currently live, with finishes and features typical of a nice Manhattan apartment (save the two turtles in a box on the terrace) is around 1,300 square feet, and they paid about $200,000 for it a few years ago. The government workers, in other words, had morphed into landlords and residents of a fancy high-rise development. Their daughter, who majored in French, is about to join a global accounting firm.
Of course, there are ironies. Chairman Mao, unsmiling, peers out from every yuan bill—the pink 100, the green 50, the jade 20. (Shanghaiers of a certain ilk are frustrated that the highest denomination is the 100 yuan bill, only about $14.) The classless, harmonious society is in fact bifurcating—between urban and rural, between the prosperous coast and the modernizing interior, between those who were fortunate to get in on the ground floor of reform and those who are just now arriving on the scene. "Shanghai is not China," Dickie Yip of Bank of Communications told us. "What you see here is not representative." And as we left Shanghai I began to get a sense of that. On Tuesday, I sat in the Pudong airport, waiting to catch a flight to Chongqing *, the inland city that is the gateway to China's vast west. We were surrounded by well-dressed business travelers, black laptop carrying cases slung around their shoulders, worry-beading their phones and BlackBerrys. This could have been the holding area for the USAirways shuttle at Reagan National. Then around the corner came a group of 20 older travelers. Cheap plastic backpacks were strapped to their backs, and they wore hats, earmuffs, and scarves. They had the weathered faces and stooped posture of peasants.
Correction, Nov. 20, 2009: This article originally misspelled Deng Xiaoping's name. ( Return to the corrected sentence.)
Correction, Nov. 20, 2009: This article originally misspelled the name of the city of Chongqing. ( Return to the corrected sentence.)
Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at firstname.lastname@example.org and follow him on Twitter. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published in paperback.
Photograph of housing models by China Photos/Getty Images.