Back again, back again
All set for another year of posting! After a wild two and a half months globetrotting (ok, a little exaggeration) I find myself back in Nanjing, with a new job in a brand new school, loads of photos, a few new friends, and fresh pile of ideas and enough things to think about to last me at least a year. I’m feeling pretty good.
So here we go. If you care to wander over to my photo section, you will find a swath of unlinked titles. These will be filled in ASAP. I’ve taken over 1000 photographs of the various places I’ve been, so setting up and captioning (yes, I will be captioning all!) will take some time. I’ve completed a few of the smaller Mongolian sections (Trans Siberian – easily the shittiest of all my photos, Unknown Mountain and Yak Race and Mongolian Gers). As for a
overview on where I’ve been, I’ve decided to start with Part one of my 10,000 word (so far) Mongolian rambling and we’ll move down through the weeks hopefully in somewhat of a chronological order. This first part takes place during early August of this year.
Mongolian Hordes
My idea for this essay is less of a day-by-day play-by-play travelogue of my time in Mongolia, but rather a collection of thoughts and ideas about Mongolia and my time there. There is not particular time table or logistical explanations, but instead attempts to draw events into themes. That said, it will probably be just as boring as reading a traditional travelogue, and I caution against reading section seven, unless you are looking for a natural 100% organic sleeping aid.
Part One: The Beijing Madness Continues…
My relationship with Beijing is a relationship of necessity. In the sense that if possible, I would prefer to avoid the city at all costs, given the history of failed plans and destroyed dreams (heh heh heh).
As this is being written without internet access, I’ve forgotten where I last left my loyal and bored readers (thank you for taking time to read about something you didn’t experience).
After the standard visa debacle, which resulted in a subsequent ticket debacle, I wasn’t sure if Beijing could possibly frustrate my plans any further. However, as usually, Big BJ was one step ahead, plotting to create further mayhem and disaster by sabotaging what is a simple and relatively easy procedure in every other Chinese city (providing you are not hosting the 2008 Olympics)….changing money on the Black Market.
If you are a tourist in China (ie. You hold a valid and legal Tourist Visa) you will have no trouble converting your real money into maobacks. Furthermore, if you are lucky and are not duped into spending all of this money on seemingly ‘killer’ deals in the markets around Big Red, you can easily and painlessly convert the remaining monopoly money back into useful currencies with the help of the friendly staff and your original conversion receipt at any convenient Bank of China branch. Simple. Yet as I am not a lucky tourist, but a foreign language laborer, I am not permitted to utilize such a wonderful and logical system of commerce. Instead, I am subject to the ‘Keep it Red’ policy. An ingenious system forcing me to keep a substantial (essentially all) of my hard earned clams in local denominations. The idea being that since this money was created in China, it, as such, should be kept in China. At a theoretical level, I respect this policy and in some instances wonder at the wealth that Canada would retain if it followed something similar. However, at a practical level (and when it comes to your money, isn’t that the only level that matters?), it sucks.
In a true capitalist nature, a market was noticed and created. Enter the Yellow Cow (黄牛 huang niu). This intrepid species can be found throughout the P.R.C. inhabiting various banks waiting to serve all of your conversion requirements. However, this usually abundant and common species is at risk, especially in Beijing, where it has gone all but extinct in the central regions. Blame can be placed on the Central government, who has entered into an eradication program to exterminate this useful group of mammals in an effort to ‘clean up’ the city in the face of the coming Olympics.
Despite knowing of several Yellow Cows in the Nanjing region, I, naively, assumed I would be able to easily track one down in Beijing. Usually ‘tracking’ on down consists of standing in front of a bank for approximately 2.4 seconds. After that time, several will emerge from the stone works or slither out of the cracks between the concrete ready to give you the best possible rates. I wasted several hours on my last day in Beijing visiting numerous banks with zero success and only blank stares to inquiries regarding the seemingly rare Yellow Cow (and answers of “you have to go to the Bank of China”). Although I was fairly certain I would be able to exchange RMB within Mongolia, I never like to travel anywhere without several powerful presidents in my pocket. Defeated, I wandered into what I consider to be the last bastions of hope and help in China…the 5 star hotel. I coyly inquired about currency exchange back into USD, and received the standard answer. I then asked about the Yellow Cows, which appear to have been driven out of Beijing. The girl and the front ran away to her friend working behind her, where they discussed the situation in quiet, returning a minute later to deliver a lecture on the dangers of employing Yellow Cows. Thanking them for their concern, I reiterated my position, stating that given the current policy, this is the only possible way for me to obtain USD and that my Mandarin skills, while lacking considerable, are up to par in this department.
“Ok, you can go to this address” said the girl, promptly scribbling an address down on a hotel name card as if she had given this address a million times.
Unfortunately, this would lead me to an area about thirty to forty minutes from my present location, well past the closing time of the banks. Yellow Cows operate differently, with some holding all their cash on them, while others have relations with the actual bank itself, converting currency within (I have no idea how they swing that operation). Given that I had no idea about which type I would be dealing with, I opted out of making the trip over to that region (I didn’t want to shell for the lengthy cab ride). RMB would have to suffice in Mongolia, and it did…where the government respects the individual’s right to exchange currency anywhere and anytime they please.
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16 Oct 2006 10:42 pm Bryan 4 comments
Talk about monetary policy run amock. Is anyone else scared by this scenario?
Wikipedia has what appears to be a good rundown on the RMB.
Finances were never my forte, take a look though man, and maybe add an explanation. Their monetary policy is incredibly strict, and it’s quite difficult even for Chinese nationals to get a hold of foreign currencies without an adequate reason.
http://www.answers.com/topic/renminbi
“The RMB is convertible on current accounts, but not capital accounts. The ultimate goal has been to make the RMB fully convertible. However, partly in response to the Asian financial crisis in 1998, the PRC has been concerned that the mainland Chinese financial system would not be able to handle the potential rapid cross border movements of hot money, and as a result, as of 2003, full convertibility remains a distant goal.”
The necessity for current account convertibility exists because China has a massive trade surplus with the US. Assuming that many if not most Chinese exporters price in USD, these same exporters will be left with pools of USD in their bank accounts. Now, in order for these exporters to expand their business practices, they need to hire more Chinese workers, build more Chinese factories, and buy Chinese equipment, in effect they need their USD to become RMB. So they go to the Chinese banks who gladly take their USD and exchange it for RMB. These banks, having an excess USD, in turn exchange their USD with the Chinese Central Bank who then throw it onto the existing giant pile of USD for safe keeping. The burning question is: why does Chinese monetary policy prevent USD from flowing in the other direction? Don’t think that it’s a one way street? If you went to the same Bank in China with USD and asked them to convert it into RMB, would that be a problem? What’s wrong with this picture? As long as goods flow into NA and paper flows back to China, disequilibrium in the exchange rate will continue to grow. USD inflation will increase but continue to remain dormant, like an undetected tumor, until such time as the Chinese Central Bank decides to reverse its policy. Then the diagnosis will be grim for the US Fed. It’s very easy to slow the rate of increase of money supply, but to actually reverse it, to destroy money?
As far as the Capital account is concerned, this maybe a case where the opposite is true; that is China runs a Capital account deficit (with the US and others). This makes sense when you think of the pontifications of people like Lou Dobbs who rant on CNN about the exportation of the American manufacturing sector. This has a much smaller impact on money than the current account though. In fact, Lou Dobbs really doesn’t know what he’s talking about. It’s only by a perverse fluke that I agree with his recommendations. As soon as China trades fair, he imediately becomes a hack.
Definetly no problem converting USD or other major world currencies into RMB at the Bank of China.
Interesting man, thanks. I’ve believe I’ve also probably mentioned this in a previous post or in some converstion, but hording USD is also a component of the Party’s national security policy. Mainly concerning a future military confrontation with the USA.
Despite the hoopla, Chinese propaganda (youtube videos for example) and fear-mongering by certain American politicians, the PLA remains vastly inferior to American forces. It is being upgraded and electronically integrated, but in a Taiwan strait confrontation US carrier/submarine/B2 combined arms power is probably indisputable.
Enter reserves of USD. From my understanding, if a conflict should so arise, the Bank of China would flood the market with their USD reserves (treasuring holdings, hard cash etc.) While most likely not being able to win militarily, the Party would hope to gain leverage through this tactic. However, I suspect the global implications of such a move would be severe, probably even more so for China than losing to a Carrier task force in the Straits.
Actually, this latest N. Korean nonesense could actually prove to be a cornerstone of cooperation between China and the United States. This is the first time in awhile I’ve seen these two parties agree (relatively) over a international problem. Same goes for the Security Council.