Features
Sunday, 01 March 2009 06:03
Written by Ned Kelly, with Rosemary Zhu and Roxanne Mei - portraits by Chad Ingraham

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“Abandon all hope, ye who enter this fiscal year!” So the doomsayers cry out to us every which way we turn. But is the wolf really at our door? Or is there an upside to the downturn? That’s Shanghai talked to an eclectic mix of movers and shakers about their professional, public and private lives in order to measure the economic pulse. Discover over this huge article if debt fret is real, if credit is crunched, if pecuniary pessimism is all-pervasive, or if our snap-back city can keep the gravy train right on track...
KEVIN JI
Managing Director, Win The Market

Has the economic downturn affected your lifestyle?
To be honest, no. I bought a new car in the last six months, and I also bought a new camera. I’m still spending as
normal, but maybe in the next six months I will cut some purchases.

What is the strongest character trait the crisis has brought out in you?
I need to be more cautious. For years, China has been crazy and it has been easy to make money, so everybody has been running around getting high on the situation. But today we should take this chance to learn something, to do something more solid...

Do you play the stock market?
Yes, and I will continue to do so. I lost money last year, but it allowed me to be more aware of financial knowledge.

When do you think the recession will start to recover?
I think it will take two or three years, at least. For China, the problem today is that we have no buyer; we have to change to internal consumption. It’s good for China to rely on ourselves, rather than on American buyers.

What do you think is responsible for the current world recession?
George Bush. Everybody knows he ran the country to suit himself rather than taking into account the considerations of his people.

What luxuries have you cut out?
I was going to buy a new villa, but now  I will hold off.

How often do you eat out?
Very frequently. Nothing has changed.

Is it difficult keeping up appearances in Shanghai during a recession?
Shanghai is a platform where the fusion of local and international fashion and culture creates a new Chinese style. It will continue to bring new lifestyles of glamour. That will never change.
PAUL LEW
Operations Manager, M1NT

Has the downtrun hurt your business?
I’ve come here from Hong Kong, so it’s been interesting in terms of what I’ve seen. In Hong Kong, our business is mainly connected with banking. To be honest, I don’t think there was any downturn, but there was expectation. Here our business has been growing. Last month was a record — it blew everything out of the water. We opened in October 2008 and the crisis had obviously already hit. I think there’s definitely an effect, but you just have to be smart. I think food and beverage is always going to be here.

What’s the best thing to come out the current economic crisis?
On a staffing level, there’s now a good amount of staff available. On a client basis, you have to work extra hard now to get the customers in.

Are you saving personally?
I suppose so, yes. I’m not having a lot of opportunity to go out and spend.

Has the crunch affected your friends?
Yeah, it’s a hot topic with everybody. As a manager or boss, you find your workers will be more committed to their jobs than before. Times are tough. A lot of jobs were lost in China.

Do you play the stock market?
Unfortunately, yes!

At what point do you think the recession will recover?
That’s hard to answer. I think it’s going to take a couple of years until we see anything positive.

Are you worried about the immediate future?
In terms of job security, no. If you’ve got a good product to offer and you’re being sensible about the market then you’ll average the same through this period of time.

What luxuries have you cut out?
I don’t think I’ve really cut out any of my luxuries! My biggest expenditure is probably entertainment, and a lot of that is probably covered by the company. So that’s lucky for me.

Do you have financial back up if things turn really ugly?
Yeah, I do. I have a house back in Australia.

Are we going to see a drastic change in Shanghai’s nightlife?
There are now a lot of discount nights and all-you-can-eat nights. Will that change? Well, I think there will be
people who get desperate and push some prices down. Will people go out less? I really don’t think so. The local market is still strong, and the expat market might be a little tighter, but they’ll probably still go out.
LUMIN & CAN
Designers, Studio P.I.

How has the credit crunch affected the boutique business?
L: Fashion is definitely not everyone’s necessity and people will cut down, or even cut out on clothes in a recession. The economic downturn has affected the exports, resulting in an overstock in the industry.

What is the best thing the crash has done to your job?
L: Our sub-label, re:license, which launched last year, will gain more attention during the crisis since the idea of retailored products will meet customers’ demands. They can bring outdated clothes to our shop and get them re-styled.

Has the credit crunch affected your lifestyle?
L: I used to have five PSPs, a bunch of iPods, and I didn’t give a thought before purchasing clothes over RMB1,000. Now I am more rational.

What is the strongest character trait the crisis has brought out in you?
C: Both of us are designers and we don’t really have any business sense! In the past, the way to keep cash flowing is by putting all the profits into production. But now we’re starting to make weekly and monthly plans to run the business more efficiently.

Do you both play the stock market?
C: No, we don’t have time to play the market.

At what point do you think the recession will start to recover?
L: I think it will start to recover by June or July this year.

Do you rent, share or own your apartment in Shanghai?
C: We live in the studio to save money.

Will you go traveling this year?
C: Yes, we’re going to Hong Kong and Yunnan this week. After all these tedious preparations for our new shop, we think we deserve a relaxing trip.

How often do you eat out?
C: Three to four times a week.

Do you have financial back up if things turn ugly?
L: No, I don’t have any financial back up; yet, it is a very crucial moment to expand our business. If we do want to expand, and if things keep going down, I’ll try to invite in some risk investors.

Do you buy designer clothes?
L: Yes, of course. It is a way of showing support to my peers. But I am trying not to be too supportive since it can put you in a dangerous situation.

Do you look for less expensive items in fashion markets?
L: I’m cutting down on unnecessary stuff. But if I like the design I’ll buy it anyway. Moreover, we can wear our own designs.
MALEONN
Artist

How has the credit crunch affected the way you work?
Temporarily, the impact doesn’t seem that obvious. Personally speaking, I have not been impacted by the crisis.

It hasn’t influenced you at all?
Well, the entire working environment has been impacted. Before, I had two assistants; now I only have one. But I’m not making big changes. I’m going to keep on doing what I’m doing.

Have you noticed Western interest in Chinese art dropping off?
There will be a drop, but my work is not that expensive compared to oil paintings, so the effect will be less for me than with other mediums.

How solid do you think the Chinese art market is at the moment?
There have been far fewer exhibitions of late. Usually, at this time of year, it is very hot with a lot of shows. This year it isn’t.

What is the best thing the downturn has done for your work?
The atmosphere is now quiet. It used to be that I would be bombarded with calls from galleries and collectors, and I had no time to focus on my work. Now is a good time for me to focus, and to have more ‘pure time.’

What is the worst thing the downturn has done?
If the crisis lasts too long I will be forced to change the style of my work. That is my biggest concern: not money for costumes, not the props - the style.

Has it affected your lifestyle?
Not that much, as I’m used to living a simple, inexpensive life. I take the subway; I don’t own a car.

Has it affected your friends?
I have a lot of friends who work in commercial videos, are graphic designers, fashion designers, and so on. They have big problems right now. I have been meeting them a lot recently, whereas before they were always too busy to meet. I think that is an indication of how business is going.

Do you buy goods online?
I buy a lot of my props on Taobao. I used to buy my props in the market, but it’s even cheaper online.

Is your “dream goal” still on the horizon, or is it on hold at present?
For me the glory is still there; it’s the same and will never change. If there is no money then I will find a way to use less money to produce my work.

Who do you think is responsible for the world recession?
George W. Bush!

What extravagance have you refused to cut out?
What I really like are cheap antiques and second-hand objects. I’m not into luxury items, and I dislike cars.

Will you travel this year?
Travel is a big cost in my life; I travel half the year. But this year, instead of taking the plane, I’ll take the train. I’m scared of flying anyway!

How often do you eat out?
Everyday, and I’ll continue to do so. But I’ll choose the cheap restaurants.

Are you worried about the immediate future?
The biggest difference between East and West is that we had nothing when we were children. We were very poor; I had one set of clothes to last me all year. Now we have a lot of material possessions, but if we lose them I don’t feel we will be that depressed. I’m not that nervous about the recession because, for my generation, growing up in China was quite barren: There were no cars, no clothes. But we still had happiness and we still survived. So we if lose our material wealth it’s no big deal – we can still survive, still live.

Do you play the lottery?
No, I have very bad luck in life

Is it difficult keeping up appearances during the recession?
I’ve always dressed flamboyantly, even when I was very poor. It has nothing to do with money.

You’re philosophical for the future...
It’s very interesting for us contemporary Chinese. We’ve met the cultural revolution, SARS, and the Olympic Games. During SARS we were very scared, but it passed. Life goes on. In life unusual things happen, but they are interesting.
WENDY WANG
Instructor, Spartan Club

How has the downturn affected the gym business?
Many people don’t think fitness is a necessity in life, so that’s why many of them have quit their gym membership. They may even prefer to play Wii games at home. But to look on the bright side, there are quite a lot of people who want to get rid of stress by keeping fit. I think sooner or later people will realize that it’s not wrong to spend on fitness.

What is the worst thing the downturn has done to your job?
Due to declining membership, my salary has gone down a little bit.
 
Do you now budget yourself?
Yes, I’ve started to budget myself now.  I usually bought clothes immediately if I liked them; now I’ll wait until I see them on sale.

Will you go traveling this year?
I plan to, yes later this year. Anyway, it’s much cheaper compared with the same time last year.

How often do you eat out each week?
Almost every meal.

Do you play the lottery?
Yes, sometimes.

Is your “dream goal” still on the horizon, or is it on hold?
It’s still on the horizon. My dream goal is to take part in the International Karate Competition in Japan, even if it has to be at my own expense.
JIM XIE
Owner, Mealbay

How has the downturn affected the takeaway business?
Well, we’ve just lost 20 percent of our customers, and our remaining customers are spending 20 percent less.

What ratio of your business is Chinese customers and what is foreign?
More than 80 percent of our customers are expats.

Is there a positive side?
Our alcoholic sales have actually gone up 40 or 50 percent. And I don’t know why! Especially vodka, we sell a lot of that. Maybe people are drinking at home instead of going to the bars.

What is the worst thing about this credit crunch?
We have lost some of our best customers, people who would order five, six times a week. Maybe they have left Shanghai?

Has your lifestyle been affected?
I’ve stopped playing the stock market.

Has it affected your workers?
I can find better staff now. Six months ago they were always looking for a better job, but now they are all very stable, very happy to have work.

What is the strongest character trait the crisis has brought out in you?
Caution.

When do you think the recession will recover?
As soon as possible, I hope; but I think one or two years.

Are you worried for your immediate future?
Yes, because I am not working for a company, I’m running one. I have 35 staff and I don’t want them to lose their jobs. Everybody in the team thinks the same. And we are all now very aware of how very important customer
satisfaction is.

Do you budget yourself?
In September we set ourselves the target of cutting our bills – stationary, electricity, staff overtime – by 30
percent.

Is your “dream goal” still on the horizon, or is it on hold?
No, it remains the same: to take three-to-five years building up the business to a high level, then I hope I can retire. I have to wait and see what happens, but I am still young and I still have energy.

What do you think is responsible for this world recession?
China is progressing very fast. We are paying for the rapid growth now. A lot of problems come with it. We cannot say it’s anybody’s fault, but we need to take good care of this situation and the government has to learn some lessons and create good policies.

What extravagance have you refused to cut out?
I still spend a lot on my little girl, because she is so lovely and I want her to be happy.

How often do you eat out?
Two or three times a week. I am often invited by the owner of a restaurant – they are concentrating more on the
delivery business now.

Do you have financial back up if things turn ugly?
Yes, I have a few plans, and I have friends that like my business and want to invest in it.

Which profession  is the most successful during times of recession?
A job in the government, this is the best job. But I think the government might change – if they are too stable it is not good for social progress. Of course, I think our government is thinking about that now.
MIKE CAI
Manager, Jimmygraphic Creative Studio

How has the downturn affected your industry?
In terms of the website industry, the impact is positive because consumers are tending to be more rational. They are checking online maps, logging on Dianping to download coupons of their favorite restaurants, or using Kaixin and Facebook to expand their network. 

What is the best thing the downturn has done to your job?
I always wanted to build up the best website developing studio in Shanghai. The downturn is a typical case of ‘the survival of the fittest.’ It refines the market and leaves the elites.

What character trait has the crisis has brought out in you?
Leadership and reliability, I think. When the financial crisis first happened, my staff started to worry about their own future. At that crucial point, I learnt how to convince my fellow staff and make them trust me.

Do you play the stock market?
Yes, 70-80 percent of my savings are in the stock market.

Is your “dream goal” still on the horizon?
Yes. My “dream goal” is to build up a brand which belongs to China. Not a copy, and nothing cheap, just being proud to be “Made in China”.

And will Shanghai survive 2009?
Yes, it’s an opportunity, not a disaster.
JENNIFER SUN
PR Executive, Grand Hyatt hotel

Are you worried for the immediate future?
Not really, but I believe we all have to be patient now. I don’t think China is undergoing such a big crisis compared to Europe and the United States. Some of my friends in Europe are worried about being fired.

How much are you saving?
I don’t really save, so I guess it doesn’t change, but during this period I will try to save a bit. I’m trying to cut down on some unnecessary expenses such as eating out and buying clothes. I don’t have a clear goal of how much I should spend every month, but every little penny counts.

What is the best character trait the crisis has brought out in your work?
I’ve become more open-minded. Some things have to be done a different way nowadays. Also, I have to explore more ways of getting things done cheaper.

Do you play the stock market, or the lottery?
No and no.

Do you buy goods online?
Sometimes I do, yes. You can find everything on taobao.com.

At what point do you think the recession will start to recover?
I think it should start recovering after the summer.

What extravagance will you not cut out?
My heater! I can’t live without it! But I am also spending less on shopping, and I will only spend money on items that are worthy.

Will your go traveling this year, or will you save money instead?
I just came back from traveling. I will never stop traveling.

Shanghai is famously glamorous. Is it difficult to keep up appearances here during a recession?
Shanghai is a city with many different lifestyles. I’m sure whatever your style, you can still find your category. Also, there are many places that offer stylish clothes without costing a fortune.
GEORGIE YAM
CEO, Dragonfly

How has the recession affected the spa and massage business?
Basically, we’ve seen that frequency has gone down slightly, but we’re quite fortunate because we have a wide base from locals supporting our business. The only downside is that there are fewer tourists.

So is this the worse recession you’ve seen?
Well, I’ve gone through the 1998 economic crisis. And the SARS thing in 2003 was really bad because there were zero tourists. This time, based on my two experiences, I think China will not be especially affected.

Have you seen anything positive?
Oh yes. During this current downturn people get stressed out. When they get stressed out there are a few things they like doing: Either they’ll go to the pub to relax, or they’ll go to the spa for a good massage. Now, massages in China are still very affordable. We actually see quite a number of people staying in 5-star hotels visiting us more frequently than before. In these hotels a massage can easily cost five or six hundred yuan, while at our place it’s about RMB200-225. It’s still a very affordable price because we position ourselves as a 5-star service with a 3-star pricing.
 
Has the credit crunch affected your lifestyle?
Not really. Life still goes on. But some friends of mine are depressed. I think they tend to worry too much about the future. I have friends who are in the manufacturing business, garments and exports, and so on, who are quite badly affected. But among friends it’s very important to push up morale and encourage each other.

What is the strongest character trait this crisis has brought out in you?
As the CEO I have to be even tougher because I have now close to a thousand employees on my shoulders. I don’t think we will re-train anyone or cut any wages. I just need to concentrate on the yearly marketing plan, how to
attract more customers, and how to give an even better service.

Do you play the stock markets?
Fortunately, I don’t!
 
At what point do you think the current recession will start to recover?
Globally, I think at least a year. Looking at the situation, China has a very strong world reserve. If everyone in China starts to spend an extra dollar a day the economy will actually move. But people start to worry and think, ‘I must tighten my belt!’ This is not a good sign. I think in China it will take about four to six months to stabilize; then the economy will expand again.

Personally, what do you think is responsible for the current worldwide recession?
Well, I think a lot of things were mishandled in America. Their banking system was not especially well-protected and there were so many bad debts. When I say that China isn’t affected much it’s because local Chinese hardly ever borrow money from the bank to start a business. They will loan from the bank for property maybe, but it’s not common in China unless it’s a huge factory or a state firm. This kind of business lifestyle in China is actually very healthy. I think that after this incident the banking system will change around the world.

What luxuries have you cut out?
Probably just going out less often for expensive meals, and also cutting down on my driving.

Are there any extravagances that you refuse to cut out?
Instead of going to Paris or Italy for my holiday, I’ll go to Bali or Thailand.
 
How often do you use your credit card?
I’m very conscious about using my credit card. For me, if I happen to spend a thousand on a credit card, I will put aside a thousand yuan at the end of the month so I know it is there. Credit card spending is actually a very serious issue here, especially for the younger generation. It’s a practice I do not encourage.

Do you play the lottery?
Not often. But winning has happened to me a couple of times. My highest was about 25 thousand yuan, quite a lot, but it depends on your luck.

Do you buy designer clothes?
Yes, but I limit it to maybe two or three items every season. I used to be crazy about designer clothes! But I think things don’t change in your life; you just look at things differently.

Do you cook at home?
I have an Ayi who cooks at home. She makes wonderful dinners!
BONNIE CHENG
PR & Marketing Manager, Muse

Is the downturn affecting the nightclub business?
We were worried about it, but for us the nightclub business hasn’t changed. In fact, in the last three months a lot of other clubs have closed, which is good for us; many good people now come to our clubs so our business is rising.

Are you adapting to avoid a similar fate to your rivals?
Before, we would spend a lot of money on decorations to make the venue look beautiful, but now we are concentrating on drinks promotions, that kind of thing, to attract customers directly.

Do you play the stock market?
A little. I lost some money in the last four months. So now I put my money in it and don’t even want to watch it!
I’ll still play stocks, but much, much less than before.

Do you budget yourself?
I buy fewer cosmetics, outfits, shoes - all the useless stuff.

Is your “dream goal” still on the horizon, or is it on hold at present?
My goal in life is to buy lots of luxury goods. I like to collect watches, purses and jewelry. That hasn’t changed. I’ll buy less, but keep collecting luxury goods. It’s my hobby.

Do you now look for less expensive fashion items?
Yeah, I go to Zara, it’s good. It’s like a supermarket for me, so easy. You can get whatever you want, and much cheaper.

Personally, what do you think is responsible for the world recession?
America, of course! The whole of world finance is rooted to America.

Will you be going traveling this year?
I will still go on vacation, but before I was planning to go to Europe, whereas now I’m going to nearby Bali, which is very beautiful.

What extravagance have you refused to cut out?
Food. I eat out a lot, sometimes at a local place, but then sometimes down on the Bund.

Do you cook at home?
I don’t know how to cook! At home I only have cup noodles.

Do you have financial back up if things turn ugly?
I have a financial advisor who tells me what I should invest in; sometimes short-term investments, sometimes long-term. I bought a lot of gold two years ago. So far it’s going well...
TRACY CUI
Director of English Website Department, Ctrip

How has the economic downturn affected the travel industry?
They say that travel reflects the economy in any society. To be frank, the current economic crisis has slashed down the growth of travel, because travel is not a necessity for most people. However, it is still growing in China at a comparatively slow rate. After all, the economy is China is not as bad as the United States or Europe.

What is the best thing the downturn has done to your job?
Cost control is our priority at this stage. Basically, the company has to save unnecessary expense. In fact, it has given us time to improve our services, internal communication, and products development. Also, it saved us from blind overspreading.

Has the credit crunch deeply affected your lifestyle?
I am not a person who is keen on luxury things. The “make two ends meet” lifestyle hasn’t brought me any trouble in the bad economy.

Has it affected your work colleagues?
Not really. Ctrip will not cut down salaries, nor cut jobs. The downturn hasn’t literally affected their personal lives.

What is the best character trait the crisis has brought out in you?
It affects my decision-making process now. Since the situation is not that bright at the moment, I have to be more considerate and cautious.

At what point do you think the current recession will start to recover?
I’m quite positive about this. Many people tell me it will recover in late 2009, but I think things will get better after April.

Do you have serious debts?
Yes, I’m afraid my house mortgage dominates my debts! Still, I manage to handle it.

Is your “dream goal” still on the horizon?
My dream goal is to retire at 40. At that time, I can do whatever I want. Maybe go back to school, but not for the sake of decorating my resume. I’ll work as a volunteer at some charity groups. It is just a matter of time and not really related to money.

Will you go traveling this year?
I was planning a big family trip [over 10 people] to Sanya, but I think this is not such a wise idea at the moment.

Is it difficult to keep up appearances in Shanghai during a recession?
We need to care about those who get hurt the most. These are not the millionaires who lose their money, because that is just a number in a bank account. The government and the media should care more about the
jobless migrant workers.
OLIVER HU
Broker-dealer, Changjiang Securities

How has the credit crunch affected your business?
We are soldiers in the front line fighting against the current financial crisis, thus “casualties” are unavoidable. Fortunately, the Chinese government has made quick responses to the alert and managed to save the stock market from collapsing.

What is the worst thing the downturn has done to your job?
I’m working as a broker-dealer of bonds, and the downturn actually boosted my business. During recession, the government has to reduce the interest rates to stimulate internal demands. So the price of bonds, especially the government bonds, will increase rapidly.

How much are you saving compared to six months ago?
No drastic difference.

Has the recession affected your friends?
It has affected my co-workers harshly. Since the stock market plummet from 6,000 to 2,000, some of my
colleagues working in security went broke...

What character trait has the current crisis brought out in you?
To be frank, the credit crisis didn’t affect my life that seriously, but it reminded me of the importance of rational consumption.

Are you saving money?
I am buying funds every month.

Do you play the stock market?
I am not allowed to play the stock market.

Do you rent your own apartment?
No, I live with my parents.

How often do you cook at home?
I don’t cook.

Do you monitor your utility bills?
No, my mum does that.

How often do you use your credit card?
As often as possible! I don’t like carrying cash; it’s not convenient. But I do pay my debts back on time every month to earn a good reputation.

Shanghai is famously glamorous. Is it difficult to keep up appearances?
As the popular Chinese saying goes, ‘If you don’t manage your money, it will go into other pockets.’ Shanghai has to learn to spend its money rationally. Though Chinese people don’t overspend, keeping all your savings in the bank is not a wise idea. We should take rational investment as a form of saving as well.
JOHNEY ZHENG
Director, ESEE Model Management

How has the economic crash affected the modeling business in China?
It has greatly affected the South China region. In the Pearl River Delta, due to the shrinking export trades market, many clients are cutting down their budgets for catalog shoots. The Taiwanese and Hong Kong markets are also feeling the pinch. Cash is also running tight in the high-end apparel industry, that’s why many large luxury goods groups have opted out of fashion weeks. Here in Shanghai we haven’t felt much of the pain. The reason is that most of our clients are domestic brands and products, and relatively mid-range or low-end.

How has the downturn helped your job?
I believe there are huge potentialities during recession times. The Mandarin for crisis is wei ji, literally meaning “danger plus opportunity.” Many high-end brands now contact us and do business directly, rather than through PR companies. It also broadens our communication channels with clients.

Are you worried for the immediate future?
Not really. I’m actually quite optimistic.

Do you have financial back up if things turn ugly?
I’ll cut down the budget or cut down on staff.

Has the credit crunch affected your lifestyle?
Not much, only a little on the psychological level. At this stage, people think they should be saving money, even if their life isn’t affected by the economic crisis much.

Personally, what do you think is responsible for the world recession?
Excessive consumption and the financial institutions’ blind pursuit of profit, not to mention their lack of discipline.

What luxuries have you had to cut out?
I’m a rational consumer, so I don’t buy luxuries. I only buy stuff which is necessary.

Will you curb your traveling this year?
I travel all through the year because my company has many overseas shooting projects. But I’m thinking of cutting down the costs a little.

Do you bring your own lunch to work?
No, I buy lunch from Lawson!

Which profession do you think is the most successful during a time of recession?
Fengshui-consultants, or fortune-tellers. People always need something to hope for.

Is it difficult keeping up appearances in Shanghai?
It should be fine for men because we always wear black suits and you can’t tell if it’s from this season or last. But things may be not that easy for trendy ladies, if you know what I mean...

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