Paying for Face

An architectural drawing of the China Pavilion at the Shanghai Expo

Adding to the woes that China's economy is slowing down, Shanghai is presented with a 19 billion RMB ($2.4 billion) bill for the World Expo 2010 last year.

Organizers had used nearly 13 billion RMB in bonds and loans to pay for construction and other costs.

Although the six-month fair made 1.05 billion RMB in operating profit, the city still has to pony up 19.7 billion RMB for the cost of building the site.

The fair, which ran from May to November last year brought in 73 million visitors, the highest number in the fair's 160-year history. 

The government of course hailed it as a major success, but now one wonders how the city is going to pay for the massive bill.

An official report by the Shanghai municipal audit bureau released on Friday showed that the expo cost 31.7 billion RMB to build and run -- 3.1 billion RMB more than the original budget.

Ticket sales were meant to be the main revenue source, but then visitor numbers grew due to discounted and free tickets. In the end tickets worked out to be on average 100 RMB ($15.67) per person, the price of a concessionary one. All adults were supposed to be charged double that amount.

It turns out the municipal government handed out at least 10 million tickets -- one for every Shanghai household -- just before the opening of the fair. In addition it is widely believed more free or discounted tickets were available through state-owned enterprises.

Talk about free giveaways. Seems like pumping attendance numbers was more important than actual profits.

Another rumour was that staff at national pavillions inflated official gate numbers, but expo organizers denied this.

The increased budget may have been due to poor attendance in the first month which promoted organizers to have more live performances and more staff on hand. Strong inflation in wages and construction materials were other factors as well as some countries backing out of building their own pavillions and using rented facilities built by the organizers.

The costs were paid by a number of sources:

2.66 billion RMB from Shanghai government

2.86 billion RMB from commercial and social donations

1.20 billion RMB from a dedicated cultural fund

5.50 billion RMB from the sale of expo bonds

7.50 billion RMB from loans from banks, capital funds and "other methods"

That total is 19.72 billion RMB. So doesn't that mean 11.98 billion RMB still needs to be paid up? Why is Shanghai still on the hook for over 19 billion RMB, or are there other costs we're not told about?

The audit says bills have either already been paid or in the process of being paid. And the report is only restricted to the 5.28 square kilometre site, not taking into account the massive infrastructure improvements made -- which some estimate at up to 400 billion RMB.

Just like the Olympics where giant architectural structures like the Beijing National Stadium or Bird's Nest were built just for show, the Shanghai Expo was another face-saving event to prove the Chinese really do have tons of people who are interested in expositions even though no one wants to either participate in them or visit them.

After all those warnings to Shanghai residents telling them not to wear pjamas on the streets and hang out laundry, they will have to pay the giant bill when it was the various government departments who put on the costly charade.

How was the Shanghai Expo, Better City, Better Life?

Stock Jitters

The Hang Seng Index is plunging downwards at a fast rate these days.

Today it dropped over 770 points to close at 16,822.15.

The fall of 4.4 percent, the lowest in 2.5 years was due to mainland financials and property companies. There are also fears the Chinese economy is going to hit a hard landing with no sign of the Chinese government injecting a stimulus package like it did in late 2008.

Even casino stocks fell, with Galaxy Entertainment losing 19 percent on fears of a credit squeeze on private firms on the mainland would affect gambling revenues. This is an interesting development as most believed up until now that gambling was recession proof.

While some investors are scared and are trying to cut losses, others are waiting for stock prices to fall even further.

It will be a good time to look for good deals, but my question is, as the economies in Europe and the United States need to become more fiscally responsible, from the countries right down to individuals themselves, doesn't this mean overall that GDP numbers will be falling as well? In that case would that mean we're not going to see stocks make people as wealthy as they did before?

In other words are we ever going to see the Hang Seng climb over 30,000 points like it did in October 2007?

Perhaps this explains why people are moving into property instead -- perhaps more of a sure bet.

Word of the Day: Ham Sup Lo

Hong Kong has a lot of ham sup lo (咸湿佬). Ham sup lo means men who are perverted or having their minds in the gutter -- all the time.

The city also has a lot of naive girls who don't have much sex education to protect themselves from these ham sup men.

The latest case? A self-styled feng shui master was found guilty Friday for tricking his girlfriend's 15-year-old sister into having sex to dispel evil spirits and then convinced her that the "ritual" had to continue for the next five years.

Yuen Yuk-kin, 43, told his victim who was below the legal age of consent that the fever she had for two weeks was because of her boyfriend infecting her with undesirable spirits during sex.

He said the only way to get rid of these spirits was to have sex again -- but with him.

The fever then went away and the girl started believing Yuen had magical powers.

He then convinced the girl, with whom he'd been dating her sister for three years that the sexual "ritual" had to continue otherwise she would contract cancer before the age of 30.

Yuen began having sex with her everyday in 2004 and then this gradually became weekly until last year when the girl finally thought it was suspicious that he needed more time to "cure" her.

Then when he tried to end the "rituals", he threatened to break up with her sister but warned this might lead to the elder sister's death because she was fragile and could commit suicide.

The judge said Yuen exploited the girl's fears for her family's well being.

What kind of hocus pocus garbage is this? How can men get away with telling such ludicrous stories? And it took her six years to figure out what he was doing was wrong?

Yuen is not the only one -- there have been many other similar cases over the years.

What I don't understand is why these girls haven't had any proper sex education. What are they learning in school? And why do they think a feng shui master can cure them by having sex with them?

Are girls that gullible? Very much so it seems.

In a city like Hong Kong where literacy rates are in the 90 percentile especially among young people, you'd think their critical thinking skills would be on the alert for scams and this one is completely outrageous.

Perhaps the sex ed teacher did not go over the section entitled "beware of ham sup lo pretending to be feng shui masters to get into your pants".

Wen's Campaign Continues

Premier Wen Jiabao continues to be the lone wolf crying for changes in the Party system.

Last night on the eve of the 62nd anniversary of the founding of the People's Republic of China, Wen made a speech pledging to address the country's biggest social issues, including inflation, the growing income gap, unemployment, food safety, corruption, environmental destruction and social injustice.

"We will make great efforts to guarantee and perfect democracy and resolve the problems that most concern the people and that most directly involve their interests," he said in remarks published on government websites.

"We will make great efforts to advance the opening and reform and continue to push forward economic, political, cultural and social system reform. We will make great efforts to safeguard social justice, and ensure the people's democratic rights and judicial fairness."

Of course Wen doesn't mean democracy in the western sense of multiparty elections but rather inviting more of the party elite more say in ruling the country.

This building of consensus hasn't really worked for Wen, as his rather liberal remarks seem to be sidelined particularly when he says them abroad. But this time his speech was published for the record which means someone sanctioned it.

When I started living in China four years ago, I found the premier a refreshing figure who really knew what needed to change and actually spoke out about them.

But it soon became evident that Wen is quite powerless in trying to implement changes to the system and few are willing to back him and his ideas. Also he would say one thing but then do another, as the Sichuan earthquake in 2008 was a good example. When he visited the quake-hit region, he promised the government would do all it could to help the victims.

However when local activists tried to investigate why so many government-built schools collapsed killing many students, they were jailed for subverting the Chinese state.

Wen knows his time is running out -- he must hand over the reins of power to his successor, expected to be Li Keqiang next year. And so he's trying to use any opportunity he can to speak out.

According to Yu Jie, author of China's Best Actor: Wen Jiabao, the premier knows the system is falling apart.

"There is only one objective for all that Wen Jiabao has done since he took the reins, and it is to 'act'. He knows that this old car -- the Chinese Communist Party -- is going to fall apart," Yu writes in his book.

"He himself is not a driver with the charisma and ability to stop the car or switch path... As a result, all he can do is to be like a puppet, acting as long as he can."

So are his pronouncements for democracy a heart-felt monologue? Or is it a warning foreshadowing what may come if his words are not heeded?

Only time will tell.