While I absorbed the news of impending fatherhood, the annoyances and idiosyncrasies of a City wrestling with itself were relegated to the background and I couldn’t bring myself to write this Diary, but now as I attempt to create certainties for my family, the rumour mill of Beijing has me reaching for the keyboard again. 
Certainty comes with some security about where we can work and live without anxiety. The Administration of Industry and Commerce (AIC) that promulgated a law about SOHO not being eligible for business, and then reversed it, has this week announced that they will now investigate all companies starting July 7th and will fine those not registered in appropriate buildings. Our building, a full 31 storey office block, has not received its official permit. This is pending the signature of each and every individual landlord who must acknowledge that they own the title. Tracking down people who rarely appear to legally have the money to buy these spaces legitimately is proving to be a challenge. Rental in Beijing is increasing as are house prices, but by way of contradiction it appears that incomes are not increasing at the same rate and there is a great deal of supply. Renting a new 3 bed room apartment in Choa yang, the south east corner of Beijing, is being quoted at US$2.5k – US$4k per month. What bemused me was the property agent telling us that many people view but few become tenants – our current complex is only 50% occupied but the landlords were entirely inflexible on the rental. They apparently are enjoying the capital gain which booked 6.4% in May alone. Yet behind our apartment are another six, 30 storey apartment complex being worked on 24 hours a day. The same is true of the acres of office buildings that will be on stream in the next 12 months. 
There is a question here about whether it is good to buy property prior to the Olympics or to wait for the bubble to burst. For security I decided to buy an apartment which set me on another trail of rumours and speculation. The apartments that we wanted to buy in Global Trade Mansion, in the city centre, are being quoted at RMB20, 000 m² (US$2,500). They sold for half of that amount three years ago. We started negotiation on one apartment only to find that the landlord doesn’t actually own the Title to the property and expects the buyer to pay the US$125,000 outstanding so that he can claim the Title first. This might be easy enough but for the capital limits on foreigners allowed to only bring in US$50,000 per year. Foreigners have to raise 40% deposit for a property and can’t sell for 5 years without paying hefty taxes. A foreigner can only buy one property. In a quirk of Chinese law, according to HSBC, the Title has to be transferred from the owner to buyer prior to money being exchanged – which in principle I like but which creates a Mexican stand off situation with these shadowy property magnates. Therefore we will have to spend RMB1, 200 (US$150) to re-register EASTWEST in another block in the same complex. As my personal stay Visa expires on the 17th July, we have to affect this transfer before then so that I can be in a legally entitled building to get my Visa renewed. As we will have to wait for certain forms, we’ll probably be obliged to pay the express fee to get the Visa renewed before it expires – a not insignificant sum of RMB1,600 (US$200). As Beijing rushes towards modernization and the Olympic showcase there are these contradictions still at the heart of the legal, economic and political systems that lead many observers to question the fundamentals of the China miracle. There appears to be a battle between the leadership with their stated policies of openness, anti-corruption and modernization, and the structures which implement these new policies. As I pay the price of inflation in every aspect of working in China but don’t witness the actual benefits of the higher cost I can’t help but question the value of operating here. Certainly the offices and apartments are being built, but I often feel angered at the belief that foreigners are here to be taken advantage of. At a recent British High Commission briefing an officer predicted a stock and property crash to take place in China. The question in their view is when, not if, there will be a large correction. One of the corrections the Chinese authorities hope not to make will be the medal tally. Over drinks in a jazz bar a journalist told me that there is a rumour of a second China team of athletes who will be brought in after just before the 137,000km torch relay, avoiding the 9,000 doping tests taking place this year; part of an unstated but prevalent belief that the number one goal for China is to win more gold medals than the USA. How this ‘shadow force’ of athletes will avoid the 4,200 on-site spot checks I am not sure. Such is the level of cynicism among the foreigners that live in China that we may end up with a discredited set of results which would be a tragedy. Beijing becomes a more livable city by the month, but one is never sure how and when that will change.
Certainty comes with some security about where we can work and live without anxiety. The Administration of Industry and Commerce (AIC) that promulgated a law about SOHO not being eligible for business, and then reversed it, has this week announced that they will now investigate all companies starting July 7th and will fine those not registered in appropriate buildings. Our building, a full 31 storey office block, has not received its official permit. This is pending the signature of each and every individual landlord who must acknowledge that they own the title. Tracking down people who rarely appear to legally have the money to buy these spaces legitimately is proving to be a challenge. Rental in Beijing is increasing as are house prices, but by way of contradiction it appears that incomes are not increasing at the same rate and there is a great deal of supply. Renting a new 3 bed room apartment in Choa yang, the south east corner of Beijing, is being quoted at US$2.5k – US$4k per month. What bemused me was the property agent telling us that many people view but few become tenants – our current complex is only 50% occupied but the landlords were entirely inflexible on the rental. They apparently are enjoying the capital gain which booked 6.4% in May alone. Yet behind our apartment are another six, 30 storey apartment complex being worked on 24 hours a day. The same is true of the acres of office buildings that will be on stream in the next 12 months. There is a question here about whether it is good to buy property prior to the Olympics or to wait for the bubble to burst. For security I decided to buy an apartment which set me on another trail of rumours and speculation. The apartments that we wanted to buy in Global Trade Mansion, in the city centre, are being quoted at RMB20, 000 m² (US$2,500). They sold for half of that amount three years ago. We started negotiation on one apartment only to find that the landlord doesn’t actually own the Title to the property and expects the buyer to pay the US$125,000 outstanding so that he can claim the Title first. This might be easy enough but for the capital limits on foreigners allowed to only bring in US$50,000 per year. Foreigners have to raise 40% deposit for a property and can’t sell for 5 years without paying hefty taxes. A foreigner can only buy one property. In a quirk of Chinese law, according to HSBC, the Title has to be transferred from the owner to buyer prior to money being exchanged – which in principle I like but which creates a Mexican stand off situation with these shadowy property magnates. Therefore we will have to spend RMB1, 200 (US$150) to re-register EASTWEST in another block in the same complex. As my personal stay Visa expires on the 17th July, we have to affect this transfer before then so that I can be in a legally entitled building to get my Visa renewed. As we will have to wait for certain forms, we’ll probably be obliged to pay the express fee to get the Visa renewed before it expires – a not insignificant sum of RMB1,600 (US$200). As Beijing rushes towards modernization and the Olympic showcase there are these contradictions still at the heart of the legal, economic and political systems that lead many observers to question the fundamentals of the China miracle. There appears to be a battle between the leadership with their stated policies of openness, anti-corruption and modernization, and the structures which implement these new policies. As I pay the price of inflation in every aspect of working in China but don’t witness the actual benefits of the higher cost I can’t help but question the value of operating here. Certainly the offices and apartments are being built, but I often feel angered at the belief that foreigners are here to be taken advantage of. At a recent British High Commission briefing an officer predicted a stock and property crash to take place in China. The question in their view is when, not if, there will be a large correction. One of the corrections the Chinese authorities hope not to make will be the medal tally. Over drinks in a jazz bar a journalist told me that there is a rumour of a second China team of athletes who will be brought in after just before the 137,000km torch relay, avoiding the 9,000 doping tests taking place this year; part of an unstated but prevalent belief that the number one goal for China is to win more gold medals than the USA. How this ‘shadow force’ of athletes will avoid the 4,200 on-site spot checks I am not sure. Such is the level of cynicism among the foreigners that live in China that we may end up with a discredited set of results which would be a tragedy. Beijing becomes a more livable city by the month, but one is never sure how and when that will change.