ARTICLE/From Iceland to China: What Stories I Can Share

A woman waits for the bus in Ashgabat, the capital of Turkmenistan. Magenta, shocking yellow, royal blue, sea green, burnt orange and the most vibrant red – mixed in various patterns on the traditional ankle-length dress concealing a 40-year-old woman, head covered by a multi-colored, floral scarf. Just a few feet away, another Turkmen woman stands waiting for the same bus wearing platform boots, thick nude panty hose, a black Lycra skirt – almost bottom revealing, and a sheer white top. A long fur coat tops her outfit, her 20-something face displays a thick palette of dark makeup and she smells of sweet perfume.

Welcome to the remarkable world I witness traveling around the globe. While driving over 22,000 kilometers and visiting 18 countries in the last 20 weeks, I have had a first-hand view of Europe, Central Asia and now China. Everyday offers me new opportunities to see the people of the world – sometimes rich and prospering, but more often, poor and struggling. Certain circumstances I encounter cause me to laugh with deep-seated glee while other times the situations leave me shaking my head in hopeful denial.

On the first of January 1999, I began a three-year year journey around the world with Jim Rogers, my future husband. We figured the upcoming millennium as the perfect time to travel the globe and document the world via interviews, video, photographs and the Internet (www.paigeparker.com). Our mode of travel is a one-of-a-kind, sunburst yellow Mercedes that helps us make friends in villages and cities.

When we began this journey, I never imagined driving through the world’s hills, valleys, plains and towns would lead me to eagerly await the next great cuisine or write such extensive notes on women, customs and bureaucratic nightmares. The insights I offer from my journey do not come from a sophisticated, worldly traveler. My perceptions and understanding of the world beyond America are media-stained and limited to a few trips to Europe and one to Australia. My observations are simple and perhaps naïve, yet I have been profoundly touched by the diversity, strength, enthusiasm, wit, deceit, chauvinism, curiosity and generosity displayed by the people I have admired or endured, and by the places I have planted my feet.

Since Iceland is the western-most point in Europe, our journey began there. I learned that no one bats an eye if a woman has a child out of wedlock, and in fact, this is common. In Ireland, the pubs were full – of men. In Germany, men showed enormous respect for women. During a meeting in Hessheimer, men tripped over other men in order to shake my hand first, and in Austria, one woman, after a serious sprint on the treadmill, took a break with a cigarette at the juice bar. Each place offers a new surprise and education.

Budapest, with hundreds of billboard advertisements perched atop Soviet-era concrete apartment buildings, now embraces consumerism and capitalism, but credit cards are still an anomaly. Just weeks before the NATO bombing, toll road officials in Yugoslavia refused our local Yugoslav currency instead demanding dollars or deutsche marks. This screamed crisis. Bulgaria, stripped of anything good by the Communists, looked bleak, dirty and tired.

The Turks captured the Kurdish leader Ocalan the same day we crossed the Turkish border. As a result, we witnessed a heavy military presence in the streets. I don’t think America had much to do with Ocalan’s capture, but the riots in Istanbul were anti-American. No matter, I fell in love with Turkey. Istanbul, for its energy, massive bazaar, The Blue Mosque, great coffee, mad drivers and western flare. The mountain pass from Erzincan to the Black Sea border with Georgia gave us one of the best drives ever. And, the remarkable Cappadoccia, a region of underground cities begun 4000 years ago to protect dwellers from warriors passing to and from Europe and Asia, reinforced my belief in mankind’s ability to adapt and flourish.

The trip changed dramatically for me when we entered Georgia – the bloom was off the rose. No longer were we traveling in developed and comfortable areas. In Central Asia, excluding the large cities, luxuries like heat, hot water, electricity and clean sheets became sometimes nonexistent. Poverty and dreadful living conditions of the locals became all too prevalent.

We spent our first night in Georgia in a four-star hotel in Batumi. Passing through the town, I noticed many expensive cars – BMWs, Volvos, Land Cruisers and Mercedes – driven by young Georgian men who looked just like Hollywood mobster movie actors. In fact, as we unpacked our car, I wondered if we might wake the next morning to find our tires, mirrors or hood removed from our car. The electricity ceased within ten minutes of checking into the hotel, a former Soviet retreat that had not received a face-lift since Georgia’s 1991 independence. Exhausted at nearly midnight, we used our flashlights to move our belongings to our room.

First thing, I headed for the bathroom and noticed a thin hand-towel, brown toilet paper and an absent shower curtain. I perched my flashlight on the rusted medicine cabinet, longing simply to wash my face. Turning the facet led to a spout of rusted water that ceased as quickly as it started. My first experience paying for lodging that possessed no electricity, heat or water! Crawling into bed, wrapped in my own sheet, I breathed stale cigarette smoke lingering on the hotel blanket, as Rod Stewart roared from the nightclub downstairs. Just outside my door, a babushka, in charge of the floor, organized prostitutes for various takers.

In Batumi, there was no evidence of any infrastructure – dangling lights hung from posts, roads were in wretched condition and buildings were falling apart. Illegal business was the only answer for the massive wealth of some of the young, with their new-model expensive cars. Since most of the men, mind you – driven by chauffeurs – were under 40, this breed will not die soon. I hope they will change things, perhaps become smart and honest men, after gaining power using opposite methods. These young, hungry entrepreneurs outsmarted the older men, who had spent their lives never acting without being ordered by the Communists. I reckon the old men are now the chauffeurs.

In Georgia’s capital, Tbilisi, I learned from a middle-aged professor that government workers had not been paid in over six months. As a result, the desperate need for money leads the police, guards and officials to insist on bribes. Plus when the currency collapsed, the government responded by printing more money causing inflation to skyrocket and the black-market to thrive. The professor told me that his apartment building never has electricity for 24 hours straight unless someone dies. Then the electricity works to show respect for the dead and to move the body down the elevator. This may sound debilitating, but still, the teacher talked of hope for a better tomorrow. He firmly believes conditions will improve and that his students will play a role in reshaping his country.

Azerbaijan, known worldwide for abundant oil, seemed full of life after the bleakness of Georgia. We spent several days in Baku, the capital city, and found a government-owned restaurant, a renovated caravan serai. In the fifteenth century, caravan serais served as watering holes and lodging stops for nomads traveling along the Silk Road. We devoured Caspian caviar, ripe tomatoes, baby cucumbers, assorted cheeses, beet salad, rice pilaf, grilled sturgeon, kutab (a local favorite of fried flour pancakes filled with meat or herbs) and pears, apples and grapes for dessert. Azuri red wine, Turkish white wine, vodka, mineral water and orange juice washed down our massive meal.

Our stay in Baku extended a few days too long when the Iranians threw us a curve. Back in November 1998, the Iranians assured us we would receive visas in Baku. When we telephoned to arrange things, suddenly our visas were not approved nor were they denied. One day we were told they would review the file. The next day we were told the files were sent to the foreign office. Wait and see, wait and see. Daily we called Iran to learn they were still processing our applications. Finally, after several days and untold phone calls, we were denied visas. Perhaps because we have video equipment and broadcast our journey over the Internet or perhaps due to the unrest over Ocalan and the Kurds in the northwest of Iran. Who will ever really know, but for Jim, who has been investing in Iran for the last five years and eager to visit, the news was devastating.

Now we focused on finding a ferry to cross the Caspian. We visited the port each morning to learn when a ferry would depart for Turkmenistan and daily the officials told us to return tomorrow. This made me angry – I just found it unimaginable that a ferry company did not have a schedule or know when the ferry would dock. Now after traveling through a few more former Soviet countries, I realize many state-owned companies do not operate efficiently or care a bit about customer service or profits. They operate just like they did 50 years ago. I can try to fight and change things, but after dealing with the incompetence and lack of concern for any length of time, I begin to understand why many locals accept things. Finally on our sixth port visit, officials assured us the boat would depart that evening.

Looking back on the Caspian crossing aboard the Azerbaijan, I’m delighted we made this voyage, but I plan to never repeat it. The hallway leading to the cabin smelled of engine fumes and waste. My room, decorated in browns and oranges, had a tiger rug on one wall and the other displayed a 1980s hot-babe poster – Farrah Fawcett-type woman with a knock-out body dressed in a bikini with her cursive signature at the bottom. Inside my bathroom, I was fortunate enough to have a seat on my toilet, but the dirt and dust on the back of the bathroom door was a quarter-inch thick. A bucket of water sat in the small stand-up shower with no plumbing. On the sink ledge sat a plastic measuring cup, I presume to take water from the bucket. One small, worn towel, smelled as though it was washed a few months ago. I did not wash.

Even after a sleepless night, the dirty conditions became a memory as the massive ferry approached port. Jim and I stood with our faces stuck out toward the setting sun watching Turkmenistan take shape before our squinted eyes. As the wind washed over me, I felt enormously content and calm, yet full of childlike eagerness over the anticipation of reaching another country.

Camels slowed us down driving through Turkmenistan’s desert. The enormous, slow, matted-hair, stubborn animals stopped dead in the middle of the highway as our car approached them at 100 kilometers an hour, but the Turkmen police stopped us many more times than did the camels. With scores of checkpoint stations along the highways and towns, Turkmenistan, with its light-brown skinned people wearing colorful clothes, is, unfortunately, a police state. In fact, in a market, the KGB seized one of our videotapes offering absolutely no explanation. Three days later we received our tape back, but we were forced to delete the segment showing the police harassing us.

Even with the heavy-handed police authority – one of my fondest memories so far on our global journey was the Sunday Bazaar in Ashgabat. This market, as big as three football fields, outshines any other market. Even before entering, I was overwhelmed by the masses selling wares out of the trunks of their cars. In fact, cars were being sold outside!. The interior market felt like a rare world, with thousands of people buying and selling bread, meats, vegetables, clothes, jewelry, rugs, carpets, fabrics, jewelry, bolts and plumbing fixtures, and people openly changing money on the black market.

The jewelry section attracted the largest crowd, with people buying gold and gems, assets that hold value as the Turkmen economy collapsed. The female vendors demanded US dollars as payment, not accepting local currency. I fell in love with a thin gold bracelet, but the old lady, holding a thick wad of dirty dollars, would not budge down from the ridiculous price of US$190. A hot selling item, in the produce section, was a shredded carrot and cabbage mixture. I watched several women blending the vegetables together with their hands elbow-deep in large bowls, then packaging the mixture into plastic bags about three inches by seven inches tall, finally knotting the top. The concoction smelled almost rotten as the sun warmed the day, but most every woman who stopped bought a minimum of two bags.

Ninety-nine percent of the women buying or selling in the market dressed traditionally in colorful floor-length Turkmen skirts and dresses. And not one color matched another – pink, red and orange tossed with blue, red and green combining to make beautiful patterns of stripes and zigzags – and heads were covered in other patterns of floral scarves. A local shared a secret of the Turkmen women: some women push the boundaries of traditional dress by displaying “too much” neck with a wide square or circular neckline! Imagine. Women wearing their hair in two long braids are unmarried, while the tight bun on the back of a woman’s head signifies she is married.

Experiencing the Sunday Bazaar left me feeling a great respect for the traditions, culture and history of Turkmenistan. Unfortunately, the actions of the country’s president left me in complete disbelief. Turkmenbashi, the name he has given himself, which means, “Father of all Turkmen”, is the country’s first president since Soviet reign. This man is nothing short of a self-absorbed dictator! After the fall of Communism, Turkmenbashi, a former high-ranking Communist, seized power. Since then, he has extended his presidential reign from four years to 10 years and depleted a few billion dollars of government foreign exchange reserves to almost nothing.

One visit to Ashgabat offers proof of his expenditures. In the town’s rebuilt central square, stands perched, at least 100 meters above ground, a solid gold revolving statue of Turkmenbashi. Known as the Statue of Neutrality, his likeness revolves 360 degrees allowing him to face all neighbors at one time or another during the day. Just a few feet away is another enormous statue depicting a woman thrusting a golden child out of an earthquake, paying homage to Turkmenbashi’s mother, who died in the earthquake of 1948, leaving six year old Turkmenbashi to grow up an orphan. Twenty-eight government owned hotels, costing at least $500 million, sit vacant. Across from the hotels is a newly erected multi-million dollar Turkmenistan Museum. New fountains line a recently paved road, which leads to the President’s city home. The fountains look lovely, but when they flow, some living across the street lose running water in their homes. On the outskirts of town is the new $110 million international airport, almost barren, except for the flock of Turkmenistan Airlines jets parked out back.

However, this spectacular surface, costing ludicrous amounts, is a façade. Walk two blocks beyond the dressed up road from the airport or three blocks from the city square to see rotting Soviet-era apartment buildings where the majority live. Yet, even more shocking than Turkmenbashi’s lavish spending, on himself and his pet projects, is the ever-present propaganda machine promoting him. Scores of statues and busts of Turkmenbashi fill parks across the country, his portrait rests on almost every building, and his picture taints all monetary notes. The propaganda intensifies via the pledge of allegiance, which states loyalty and commitment to country and Turkmenbashi, and the absolute worst self-promotion is Turkmenbashi’s silhouette permanently displayed in the upper right-hand corner of the government-owned television channels! We heard talk that he wanted to put his image on the country’s flag, but the ministers talked him out of that one.

Uzbekistan, the next country on our journey, offered me a grand history lesson with ancient mosques, mausoleums, minarets and madrassahs. In Bukara, I discovered vivid royal blue Iznek tiles that originated here and spread rapidly throughout Central Asian architecture. One outdoor mosque, with an attached minaret dating back to 1127, held 10,000 worshippers in its heyday. In Samarkand, we visited anther mosque built several hundred years ago by the wife of conqueror Timur. Local legend says Timur’s wife built the mosque as a surprise for her husband, who was away overpowering other lands. The architect of the mosque fell in love with Timur’s wife and stole a kiss. Upon Timur’s return, he demanded the execution of the architect and mandated women wear veils as not to tempt men, hence the required veil in Muslim countries. Also in Samarkand, we visited the oh-so-stunning Registan, where a mosque stands in the center, a minaret to the left and madrassahs are on either side. The students’ rooms inside the madrassahs were barely large enough to hold a single bed, and the small, low doors caused me at 5 foot 3 inches to bend over for entry. Today, vendors fill the rooms with carpets, robes, dresses, jewelry in faux-silver and coral, as well as many scarves.

Two young women in their mid-20s, who live 50 kilometers apart in Kazakhstan, made lasting impressions on me. One works in a yurt restaurant and the other prostitutes herself in the capital, Almaty. Irene, a recent university graduate who studied international economics, shares a yurt with her mother and theirs is one of a dozen sitting together on the side of the highway forming, what I termed, a “yurt-stop,” where many weary truckers stop for food and tea when passing through the Kazak Steppes. These traditional yurts are placed permanently, unlike the traditional yurts of just 20 years ago moved often by nomads. When we stopped, the locals flocked to us begging that we buy food, and Irene ran up and spoke in English, “Please have tea in my yurt.” I felt a tinge of guilt for slighting the others out of business, but we ventured into Irene’s abode for boiled eggs, onions, bread, meat and tea.

Irene, only 22, mentioned several times her age and how she must marry soon or no man will have her. I never came up with a comforting response since in her world, this is true. The fact that I am 30 and not married is of no relevance in Irene’s world. She hugged me as I departed – our differences in color, styles, culture and understandings did not matter. We took a Polaroid picture with Irene and her mother, who squealed. Wanting to return something, Irene offered me her favorite pink pen, her only one, a disposable, of little value by Western standards. I was left speechless from her generosity.

I met 25 year-old Vita, who has worked as a prostitute for six months, one night around 10:30 p.m. Since traffic was slow she did not mind spending a couple of hours with me. Vita is divorced, bleached blond and mother of a six-year-old daughter. A bit nervous about interviewing a prostitute, my first question, “What led her to prostitution?” – seemed to peeve Vita. Exhaling her Dunhill cigarette, she laughed and told me, “In case you haven’t noticed, people are poor in this country.” Still nervous, but a bit put off by her implication that I missed the wretched state of affairs in Kazakhstan, I retorted, “Yes, women face poverty all over the world, but most do not turn to prostitution, so what caused your first encounter?” Vita sighed, lit another cigarette and ordered an orange juice, while I drank a vodka tonic, and, for the first time in a long while, lit a cigarette.

Her version goes something like this: One night in November 1998, Vita accompanied one of her girlfriend’s on a double date – unknowingly filling in for a sick prostitute. As dinner concluded, one of the American men forked over $1500 and Vita realized he expected more than crème brulee for dessert. Her girlfriend tried to explain that Vita was not for hire beyond dinner, but the man, upon learning Vita had never before prostituted, wanted her even more and offered more money. That evening began Vita’s new life.

Before prostitution, Vita worked in a dress shop 150 kilometers north of Almaty and lived with her parents, who now rear her daughter. Vita says her childhood included an alcoholic mother and a run-around-town father. She tells me all this explaining that her daughter will never have to go without things like she did, nor will her daughter be forced to depend on a man. Saving 50 percent of what she makes for her daughter’s future, Vita talked at length about ensuring a proper education for her daughter, who will join her in Almaty this fall for school.

Vita, who makes $100 per customer and claims an average of two per night, has mostly Western customers traveling through on business. Repeat business is rare, except for a Belgian man she sees frequently, who pays for companionship more often than sex. He offered her $3,000 per month to be on call as the Almaty girlfriend. He already has girlfriends in Kiev and Moscow, with a wife and children in Belgium. Vita denied his request figuring she can make more on her own, nor does she want to be owned. Vita declined to talk about her pimp nor would she discuss the arrangement she has with the hotel and bar, which allow her to linger nightly.

After some time, I worked up the nerve to ask Vita if she actually enjoys sex. Rolling her eyes, she explained, “It’s a job.” Vita has no boyfriend, lives alone and has few friends, “Not because I am ashamed of what I do. More because I’m a loner.” She likes Versace and reads Russian Cosmo religiously. Instead of looking like a cheap streetwalker in a Hollywood movie, Vita appeared headed for an after-work party in Midtown Manhattan, wearing a baby pink crepe sleeveless dress with a chiffon scarf around her neck. Nude stockings covered her legs with ankle-length high-heeled boots on her feet. Minimal makeup and jewelry accentuated her Cleopatra hairstyle – blunt bangs and shoulder length hair. As we concluded our conversation, she thanked me for hearing her story and not judging her. I think Vita walked away somewhat relieved to talk of the life she stumbled into, and I felt newly exposed to an alien lifestyle, and most fond of the woman sharing her secrets.

Exit Central Asia, enter China – a dream spot for anyone wanting to witness a country emerging from its cocoon into a magnificent butterfly. Entering China, my expectations were to find a country and people stifled and suppressed by the Communist government. As I left China, I did so knowing this country will be the next great power in our world. China, now in its developing stage, is in fact one enormous market with eager men and women vying to sell food, clothes, produce, pots and pans, electrical supplies, toilet seats, marble lions and whatever else imaginable. All of this bartering happens on the side of the road, on bridges, in stores, out of homes, in open-air and covered markets and on sidewalks.

Even more shocking than the obvious capitalism in the streets are the churches, temples and mosques I discovered throughout China. Growing up in North Carolina and hearing Jesse Helms proclaim China’s denial of religious tolerance, I was stunned when, about 70 kilometers outside of Xi’an, I saw a church with three crosses towering over the highway. Jim and I looked at one another in disbelief, “Was that a church?” I mumbled. We turned our car around and headed back finding a village practicing Christianity for the past 200 years. The congregation is several hundred strong consisting of young and old. Wooden pews fill the hall with a picture of the Last Supper hanging in the rear. Strings of bright, colored lights line the altar where pictures of Jesus and Mary hang. During our visit, fifteen children sang a hymn for us, making tears well up inside of me.

Another astonishing find came one afternoon when we visited a Taoist monastery. We climbed more than 600 steps to reach the temple, located at the peak of a holy mountain. There, seven Tao monks – with aged, shaved heads – were praying and chanting for rain. Behind the group, one elder monk balanced upon his head a small pot of burning incense, two other monks burned what looked like yellow tissue paper in a symbolic gesture, and the strong smell of incense floated through the air as the wind developed speed. Today was the final day of the rain ceremony, performed four days each spring. As I headed down the steep mountain, sprinkles of rain fell and I stopped at a small temple to burn incense. As I kneeled with closed eyes, a monk began beating slowly on an enormous bronze drum, peace and tranquility filling me as the repetitive noise surrounded my prayers.

The commotion, noise and energy of China’s financial center Shanghai won my heart. I could live here. Thrive here. The French Concession in Old Shanghai, with a newly opened Nicole Miller store, claims grand old architecture. In Qingdao, located halfway between Shanghai and Beijing, we drank many Tsingdao beers and walked along white, sandy beaches. Beijing, with the Forbidden City, Tiananmen Square and Temple of Heaven, is a tourist’s treasure chest, but the inexcusable NATO bombing of the Chinese Embassy in Belgrade, which happened as we entered the political city, made us more cautious than usual.

Contained to the street in front of the US Embassy, riots made the press daily. The resentment toward the US, NATO and Bill Clinton vehement each time I spoke with Chinese friends and locals about the tragedy. On the third day after the bombing, and against warnings, I visited The Friendship Store, the government’s department store located beside Embassy row, where I saw young people demonstrating, but in much smaller numbers than the initial two days. The US will be hard pressed to regain the favor of the Chinese people after this act, especially since the Chinese media helps to paint an unfavorable picture. Perhaps, shortly the Chinese government will begin political dialog with the US, but the Chinese people will hold this grudge much longer. I wonder how much money we will offer the Chinese to become friends again. I wonder how many Americans will believe the bombing was accidental.

During each of my seven weeks in China, I uncovered something remarkable and fascinating, from the diverse food devoured each evening to the changes in consumerism I observed driving from the desert west to the densely populated east. Oh to spend months, or longer, watching and meeting the young women in China with their changing views, lofty ambitions, thinly arched eyebrows, small waists, long hair, platform shoes, ultra-short skirts and stockings of choice, thick in the west and sheer in the east. While the older women warrant more study with their leftover Mao suits, short hair, fuller waistlines, longer skirts, practical shoes, abundant stories and weary faces.

But all of that must wait for we are moving to South Korea, Japan, Siberia and back to Europe, before heading to Africa, the Middle East, Southeast Asia, Australia, South America and home to the US in 2001. Already, I realize these three years will be too short for me to have my fill of the world.

The Roaring Dragon

SHANGHAI, China — Today I did something I’ve contemplated doing for decades: I walked into a Chinese brokerage house in Shanghai and opened a brokerage account so I could buy Chinese equities.

Paige and I entered China on the first of April across the Kazakhstan-Chinese border. We drove eastward across the Gobi Desert, along some excellent roads, stopping along the route—Yining, Urumqi, Hami, Lanzhou, and Xi’an—that I’ve taken twice before on journeys over the past eleven years. Despite the widespread reports in the western press about how poorly China is doing economically, our eyes told us a different story.

Hami, which in 1988 had a way in and out that was more a boulder-strewn path than a road, has turned into a boomtown, packed with trucks, cars, and motorcycles–as well as goats, geese, and cattle. In 1990 there were no dealers for motorcycles; today there are three. In Yining street markets were everywhere, and its streets, too, were filled with vehicular traffic.

Where before there were only a few state shops, now private shops proliferate. In 1990 there were no gas stations; once I was forced to go to a Red Army outpost and beg for gas. On this trip we’ve found an abundance of secular temples to gasoline, elaborate service stations with ten pumps and enough arches to rival McDonald’s. In Xi’an we even found several Mercedes.

In 1990 there was but a budding hotel industry; today there are three times as many hotels, many up to world standards. As for nightlife, in Hami and elsewhere there are many discos, karaoke bars, and nightclubs. Young men are dressed in suits and ties; only the older crowd wear Mao suits.

The western press wants to make much of the lack of human rights in China, but in 8,000 kilometers of travel we were stopped only a couple of times at checkpoints, whereas as we crossed the Stans—our fast allies—we were stopped scores and scores of times by heavy-handed police. Here in China everyone is too busy making money to poke his nose into anyone else’s business.

Today China is all construction, markets, and factories. Looking east from our hotel room in Nanjing, the old southern capital, we counted twelve separate cranes working at skyscraper sites, not that there was any shortage of skyscrapers. Everywhere the Chinese are feverishly building highways, houses, shops, and factories. Many of the roads are as good as the Autobahn – and much of all this has been built by hand, just as were the Grand Canal and the Great Wall a couple thousand years ago.

Along all the roads in every town and village we found constant activity, bustling markets, Chinese eagerly working, buying and selling at every turn, and an astonishing array of new consumer goods—bicycles, radios, trucks, cars, TVs, clothes—made by both foreign and domestic manufacturers. You name the consumer good, and the Chinese are buying and selling it. China is by far the most dynamic country we’ve encountered, making the boomtimes in Ireland and Turkey pale in comparison.

On my previous visits I stopped at a temple or two, but never had a sense they were too important to the Chinese. No longer: we are constantly running into packed Buddhist, Taoist, and Confucian temples, and the surprise is the extent of the crowds. An additional surprise is the sheer number of thriving mosques and Christian churches. We’ve stumbled onto several churches with vibrant congregations. I never know who is the more startled: Paige and I or the worshippers—some of whose families have been Christian for 200 years. We have yet to find anyone of any faith who is feeling repressed. Some of the oldest members can remember problems under Mao, but the younger ones are bewildered by the question.

All in all I am sure there are some rights’ violations; they exist in every country, especially in developing countries. Even Plato wrote about them as long ago as The Republic. My sense after six weeks close to the ground, however, is that the human rights’ tempest in the West is a cover for those with some other agenda, such as protecting their own interests from a dynamic new country.

How did China get here? Its recent history is fascinating. Starting in 1978 its leadership has moved the economy from Soviet-style central planning to more of a market-based economy, yet all within Communist Party political control. In place of collectivization in agriculture, national leadership has stressed “household responsibility,” allowing households to produce and sell, which has boosted farm production tremendously. In the same way, local officials and plant managers have been allowed far more control over their domains, and Beijing opened up the country to foreign investment. The result has been a quadrupling of gross domestic product over the past 20 years, with both agriculture and industry making enormous strides. The World Bank estimates that China’s GDP might have been as high as $4.25 trillion in 1997.

While successful overall, from this uniquely Chinese stew has sometimes come the worst of both systems. From the constraints of the Communist Party have come corruption and the petty hassles of bureaucracy, while capitalism has brought inflation and the corrupting influence of windfall gains. Between 1992 and 1997 growth reached levels as high as 10% annually, particularly along the prosperous coast.

The government, with some of the best national leadership in China’s history, has had its work cut out for it. Tens of millions of surplus rural workers have floated between the villages, towns, and cities, sustained only with low-paying part-time work. The Chinese leaders have struggled to keep afloat the large state-owned enterprises, few of which have grown with the rest of the country. In addition, it’s been hard for the national government to collect the revenues it felt it needed. On top of these problems, the leadership has not only struggled to reduce corruption and other economic crimes but also to contain the deterioration of the environment—air pollution, soil erosion, and the steady fall of the water table in the north.

Will there be continued tensions between the Communist Party and the decentralized economic system? Absolutely. How will they be resolved? I believe in favor of increasing prosperity, as under Mao the Chinese tried central economic planning for decades and they know it won’t work, just as after seven decades of socialism the peoples of South America came to lose their capacity to believe in economic poppycock.

So now that I’ve seen a country bursting with the capitalist spirit and opened my brokerage account, what stocks might I buy? In China there are two major exchanges, the first here in Shanghai and the other, south of us in Shenzhen, on both of which a total of some 500 Chinese stocks trade. Many of these are not stocks I want to buy; they are the leftovers from the Communist era, poorly-run government companies the authorities are eager to unload on unsuspecting investors.

And of course there are other impediments. The equity shares of Chinese public companies are divided into A and B shares. The A-shares can only be owned by native Chinese. If they are careful how they go about it, these shares can also be owned by the overseas Chinese, who number many tens of millions around the world. Foreign investors who play it straight—that is, who don’t use a Chinese nominee to trade or invest—are only allowed to purchase B-shares.

At this writing the foreigners’ B-shares are not convertible into A-shares. Whereas at one time western enthusiasm for China was so large that B-shares sold at a premium to A-shares, today Western pessimism toward China is so great that these B-shares have fallen 85% from their highs. Such a huge discrepancy has whetted my appetite—what a bargain!

Since the Asian economic turmoil began in mid-1997, I’ve been watching and asking when would be the right time to plunge back into Asian equities. I now believe that time is close at hand. My view of the rally over the past few months is that it’s a bear-market rally, that we will have another bottom, a second bottom, that will tell us that the Asian market is truly ready to march upwards. My long observations of major bear markets tells me there is often a second major leg down, one which tests the prior bottom, and shakes out those who have been suckered into the first rally. I’ve thought this second leg down might be marked by the devaluation of the Chinese currency or some other turmoil in China–say, labor unrest and strikes.

Some years ago the Chinese formed International Trust and Investment Corporations (ITICs), government-backed investment companies, usually one to a province. These raised billions of dollars to develop much-needed Chinese infrastructure: airports, toll roads, seaports, and especially power plants. Their bonds typically paid a high rate, 15% to 18%. However, these trusts made the age-old banker’s mistake, lending long and borrowing short. ITICs were usually owned by the local provincial governments, and sometimes appeared to be guaranteed by the government, just as in the U. S. agency bonds appear to be backed by the full faith and credit of the U. S. Treasury but are not. Investors’ arguments for trusting in such semi-guarantees are that the governments involved would be too embarrassed to let such bonds default.

One of these ITICs was the Guangdong International Trust and Investment Corporation, GITIC, located in one of the most prosperous Chinese provinces. At a creditors’ meeting in January GITIC announced it had $4.3 billion in liabilities and no assets with which to cover these debts, and that it was filing for bankruptcy. The next day the Guangdong authorities announced they weren’t going to meet any obligation they might have had to guarantee the losses. Over the past few months other ITICs have made similar announcements, and the national government has repudiated any responsibility to bail them out. Overseas investment houses, some of whom are insurance companies, have had to reserve massively, sometimes writing off the investment entirely, which will wipe out years of profits earned from China and put a sour taste in their mouths for more Chinese investment.

The way the collapse of GITIC was handled alarmed some of China’s big banks, which have alerted the government that this will damage Chinese credibility abroad and hamper Chinese prospects of raising funds in international markets. They were right enough. Since January international investing in China has backed up.

In fact, much of the early money into China has not been the wisest of money. Iveco, the Italian truck manufacturer, put its first agent in China in 1984. After investing $200 million along the way, it won’t see any profits until 2002, almost 20 years after its agent’s first arrival. Unilever arrived during the 80s, too, and it, too, had to waive its usual investment criteria to justify the millions it spent in China. General Motors and western banks later poured more money into the country, but the gold rush has now come to an end. January and February of this year show a 9.5% decline in foreign direct investment from last year, raising the possibility that in 1999, for the first time in this decade, investment in China from outside may fall. Indeed, Beijing officials are now saying that direct foreign investment may slump to $15 billion from last year’s high of $45 billion.

For a long time there’s been a myth that a global consumer company couldn’t afford not to be in China; but as the losses mount many Western companies’ boards are asking if they can afford to be in China at all. Those who rushed to be “first to the honeypot” have not found that establishing a brand has won them the riches that it earlier promised; in China as in other markets brand loyalty is fluid.

Indeed, several western businesses have pulled out of China recently: the Royal Bank of Canada, Southwestern Bell, Marks & Spencer, and Fosters of Australia. Many new projects have been put on hold. The hype about a market with hundreds of millions of eager consumers has encountered the reality that perhaps only millions want certain western products. Many companies have begun to regard China much as they regard any other country opportunity, as one with risks that might well not pay off. They’ve learnt that not all joint ventures work, and that all too many local partners may not be experienced in industries new to the country.

These pioneers didn’t reckon, either, with the intensity of the local competition, nor with the government’s “buy China” policies for many industries. While China has made repeated promises not to devalue its currency, it’s hard to see how the national government can fail to devalue with all the Asian regional pressures on its value, and that prospect, too, has made foreigners cautious.

Without foreign investment, not as many Chinese jobs will be created, which naturally will have an impact on the Gross National Product. In addition, without a positive attitude toward Chinese investment those in our investment and political circles will lean more toward the containment of China rather than engagement with it. It’s a shame Clinton didn’t make the WTO deal with China on Prime Minister Zhu Rongji’s visit to the U. S., as it would have done much to rebuilt the confidence of the foreign investment community toward China.

While many foreigners who have invested in China may have lost money through ill-conceived investments, you’d never believe it by the bustling economic activity we observed on our cross-China journey. For a long, long time I’ve been enthusiastic about China’s prospects. For many years I’ve urged my friends to teach their children Chinese, as I believe the 21st century will be as much China’s as the 19th century was Britain’s and the 20th century was America’s. For all these years I’ve been waiting patiently for the hibernating dragon to awaken.

Well, here at the end of the century and the beginning of a new millennium the huge dragon—slightly smaller in land mass than the United States but with more than four times our population—has awakened. To prepare for the right moment, which could be as early as this fall, I’m compiling a shopping list of those Chinese companies in which I will invest. I’m leaving off the inefficient holdovers from communist days, those giant labor-intensive companies that will never show a profit and whose going public was only a way of getting them off the government’s hands. As examples, I’m looking at a land company with huge holdings in raw land in the new part of Shanghai, a tire and rubber company, an appliance company, and a glass company. Nothing high-tech here, but well-established companies in basic industries that will meet the emerging Chinese middle-class desire for a better life. Tire and rubber may seem hum-drum to those whose portfolios are filled with Amazon.com and AOL, but when you’ve traveled across the breadth of China today and encountered thousands upon thousands of rubber-tired vehicles—cars, motorcycles, and trucks—the Chinese now employ, you come to believe that rubber mountains of tires will be sold.

My visits to the stock exchange and the brokerages taught me several interesting things. Everybody in the stock-market business here is young, including the president of the stock exchange. This is a new business, one that didn’t exist 10 to 15 years ago, and the people in it are like those in software and the internet in America—no one is over 35. They are full of the get-up and go of youth, too, eagerly accepting challenges and long hours.

I’m not actually buying any stocks yet, simply mapping out my strategy. I’m watching and waiting for the Chinese to work out their two major problems. Their currency is not yet convertible, which will keep foreign investors from plunging in again. Once the currency issue is resolved, the artificial division between the A- and the B-shares—which if it were dissolved today would give Chinese citizens a way of sending money out of the country—should also come to be resolved.

However, the most telling piece of information I’ve learned here is that the government is trying to make the ownership of stock shares more attractive to its citizens. Over the decades of my investing life, I’ve seen it over and over: When a government creates incentives—real incentives—for people to buy stocks, they always go up. It’s particularly exciting when, as here, there’s a high savings rate, and the banks are loaded with cash. The banks have grown cautious recently and won’t lend, so that these savings are trapped in the banks. If China’s citizens are genuinely encouraged to take their money out of the banks and buy equities, the market will soar. This could happen as early as this summer, but it might take until the end of the year for all this to occur. Remember, too, that these are only two small exchanges with no more than 500 stocks—and that the local population is 1.2-billion Chinese!

So, I’m waiting for the Chinese to allow its currency to float against other currencies and for stock-market incentives that are rumored to come to become real. One or both should happen this year.

And how might an American investor take advantage of these opportunities?

An approach I’m exploring is investing in companies domiciled in overseas Chinese communities such as Bangkok, Singapore, Vancouver, etc. that do business in China or with the Chinese. The Chinese consider the overseas Chinese almost the same as themselves, giving those outside the country a leg up on other nationalities. Find a few of these companies in which to invest and the alert investor will have found an entry point into the Chinese market.

How else to invest? In addition to various Asian mutual funds, I’m reminded of what John Templeton did in 1942. The stock market in New York was depressed because of the Great Depression and World War II. With a modest amount of money Templeton bought 100 shares of each of the stocks on the New York Stock Exchange that were selling for less than $1.00. He held on to them for a good long while, and although some of these companies didn’t survive, he had bought the vast bulk so cheaply that he made a fortune.

Today many Chinese B-shares sell on the New York Stock Exchange as ADRs for small sums. A similar strategy might be to buy all these stocks and hold them through thick and thin. In five, ten, fifteen years there’s an excellent chance that this will be one of the best investments an investor will ever make.