The Wild Wild East: Credit Where Credit Is Due

Monday, November 27, 2006

Credit Where Credit Is Due

Anyone who has been to this side of the Pacific knows that, other than in specifically tourist traffic-heavy areas, China is a cash-only business. Its move to credit has been, at best, a slow crawl. Well, today I saw progress incarnate.

This morning I was asked by my bosses to attend a meeting, though at the time I was not filled in on the subject to be discussed. Upon my arrival, I signed in at a table and was given a large "gift" bag and guided to a conference room. As my eyes scanned from one end to the other, it was a sea of black coats with giant shoulders, gold patches shaped like shields, and small gold medals pinned on them. I thought maybe these were military or police personnel. But no - these were regular old engineers who worked for Laiwu Steel. (I am of the opinion that they subconciously wish they had a more dangerous occupation and trying to look tough and military-like is just the manifestation of them venting their frustration.) I took a seat toward the back and settled in. I opened the bag of "goodies" to discover a transparent folder filled with papers and a pen, and a bathroom scale. Wow. Really guys, you shouldn't have...

I looked at the materials in the folder. They were applications for credit cards and information about the positive aspects of each of the cards. It was a joint collaboration between one of China's larger banks and Laiwu Steel - they now had a Laiwu Steel credit card. Interesting, no? My question was, when are they ever going to use them? I've been living in Laiwu for two and a half months now. In everything from buying clothing and food to airline tickets, I have never ONCE been able to use a credit card. It's a question of are you putting the cart before the horse (or was it which comes first, the chicken or the egg)? Either way: if there's no credit market in China, what do you expect people to do with a credit card?

Everyone quieted down as a presenter began to speak at the podium. He was introducing the panel on stage with him. They were all upper management of the bank or Laiwu Steel. But it was the weirdest thing - people would applaud after each person was presented (which I understood of course), but after each introduction they clapped five times. EXACTLY five times. No more, no less. And completely in unison. Ever have one of those dreams where droids take over the Earth? I was living it. Last, they presented the president of Laiwu Steel. He got seven claps. At least they have their priorities in order.

They began to talk about the credit cards and bolstering the relationship between the bank and the company. After each speech, yet another set of five claps. After the last speech, seven claps, followed by the management stepping down from the stage. Suddenly, music starting playing, piped in from overhead. Imagine John Philip Sousa with a mandolin. It sounded like a parade was about to crash its way through the room. Two fuwuyuan (employees of the hotel) entered in formal Chinese dress (full-length red crushed-velvet dresses with oriental collars and embroidered dragons and flowers down the sides). They carried a giant sign with a white sheet over it. They placed it in between the presenters as they scurried to prepare for what was a very obvious photo/video-op (I'm guessing the music was targeting the video viewers). The shaking of hands began in front of a blown-up picture of a credit card with the bank's and Laiwu Steel's names and logos on it. Flash bulbs popped one after the other, turning the room into a veritable laser light show.

The fuwuyuan took the sign away and just as suddenly, the music changed. It went from a full blown march, to smooth classical Chinese music (picture yourself meditating on a mountain-top with the breeze blowing through your hair; now imagine the soundtrack music that would accompany that). A second card was brought in. More handshakes, more flash bulbs. Apparently, one card brings your purchases vigour and vitality; a completely different one is required if you wish to purchase with serenity. I couldn't really understand the musical choices or, really, why there were TWO DIFFERENT musical choices. But just then THE coolest thing happened. As the two girls carried the second sign out of the room, a third brought in a bottle of baijiu. Anyone who has read my previous posts about baijiu knows what this stuff can do. Each manager was given a small stemware glass which was then filled to the brim with baijiu. They toasted and knocked the whole thing back. May I remind you it was not yet ten o'clock in the morning. Man, do these people know how to seal a deal.

After their drink, all the management left. Their part was over and done-with. For the next twenty-five minutes, two guys attempted to place a projector in front of a screen. Not a difficult task, and yet it took what felt like ages. With no one to talk to and time to kill, I decided to check out my brand-new scale. On it was a very scary picture of what looked like a half-Mickey Mouse, half-Winnie the Pooh type character. If you're having a hard time picturing it, don't worry. You're better off. I don't know why, but every time the Chinese try to knock off a Disney character, it comes out looking ten times scarier than the original. Instead of nice, happy rounded edges and smiles, they come out with sharp beaks, creepy-looking whiskers and bodies more gaunt and unshapely than Matt Damon in Courage Under Fire (for reference, or those of you who haven't seen the movie, he plays a Gulf-War Vet on massive amounts of heroin - try to avoid picturing it if you can). I put the scary mouse scale away and prepared myself for the "boring" part.

I figured this would be an information session on credit cards attempting to educate a group of people who had never really used one before. As someone who has definitely used a credit card before (my parents can attest to that), I settled in to be told what I already knew. It was strange, but the presentation was less of an information session and more of an advertising strategy. They kept emphasizing the perks. If you spend so much you can get a free trip to the United States. If you want to buy an apartment you don't have to pay it back for fifty days (of course they left out the rather important information about the levels of interest involved). I was shocked at how little concrete information they were given about responsible credit spending. My mother always said don't spend what you don't have. Well in a cash country, you literally CAN'T. But now...maybe credit cards in China are not such a great idea after all.

I can picture five years from now, those 'get-out-of-debt' advertisements all over the television. In a nation developing as quickly as this one, and with so many people who are well-off for the first time, this could be problematic. China does need a credit system, and it's about damn time. But while ignorance is bliss, it's also a precursor to bankruptcy. With presentations like the one I attended, and the way people were chatting about the rewards of using the card without mentioning things like payment periods and interest rates, it's hard not to feel like these people aren't being swindled by a Harold Hill of sorts. I hope information trickles down. I would hate to see something necessary for development turn into a financial nightmare.

P.S. I would like to wish everyone a happy holiday. I hope everyone's Thanksgivings brought them togetherness, merriment, and lots of turkey. Alas, there is no turkey in Laiwu. It's not really a big food here in China. Sure, they have dog and horse meat, but turkey they can't manage. Anyway, best wishes from me to all of you. I will be home soon!

posted by Rachel @ 10:12 AM

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THE WILD WILD EAST: Everything you never knew you didn't know about life on the other side.

In China, the people are represented by two separate, yet equally important groups. The Chinese, who call this land "home," and the expats who migrate here. My name is Rachel. I am an expat. These are my stories.

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