December 2006

Twenty years ago, my wife and I moved with our two young sons to Tokyo. We expected to be there for three or four months. We ended up staying in Japan and Malaysia for nearly four years. We traveled frequently in China, Indonesia, Thailand, South Korea, and the Philippines, and we dodged visa rules to get into Burma and Vietnam. One year our children attended Japanese public school, which helped and hurt them in ways we're still hearing about. After our family moved back to Washington, I spent most of another year on reporting trips in Asia.

Not long ago [July 2006], my wife and I moved to Shanghai for an indefinite stay. You can't do the same thing twice, and we know that this experience will be different. Our children are twenty years older and on their own. We are, well, twenty years older. The last time, everything we saw in Japan and China was new to us. This time, we're looking at Shanghai to compare its skyscrapers and luxury-goods shopping malls with the tile-roofed shop houses and run-down bungalows we first saw here in 1986. The whole experience of expatriation has changed because of the Internet, which allows you to listen to radio programs via Webcast and talk daily with friends and family via Skype.

But it still means something to be away from the people you know and the scenes and texture of daily home-front life: the newspapers, the movies, the range of products in the stores. (Most of America's ubiquitous "Made in China" merchandise is hard to find in China itself, since it's generally destined straight for export.) And the overall exercise is similar in this way: The Japan of the 1980s was getting a lot of the world's attention; today's China is getting even more. My family and I saw Japan on the way up. During the first few months we were there, the dollar lost one-third of its value against the yen. On each trip to the money-changing office the teller's look seemed to become more pitying, and on each trip to the grocery store (forget about restaurants!) we ratcheted our buying targets another notch downward. The headlines trumpeted the yen's strength and the resulting astronomical valuation of Japan's land, companies, and holdings as signs of the nation's preeminence. The dollar's collapse made us acutely aware of the social bargain that affected everyone in Japan: high domestic prices that penalized consumers, rewarded producers, and subsidized the export success of big Japanese firms.

China has kept the value of its currency artificially low (as Japan did until 1985, just before we got there), and because it's generally so much poorer than Japan, the daily surprise is how inexpensive, rather than expensive, the basics of life can be. Starbucks coffee shops are widespread and wildly popular in big cities, even though the prices are equivalent to their U.S. levels. But for the same 24 yuan, or just over $3, that a young Shanghai office worker pays for a latte, a construction worker could feed himself for a day or two from the noodle shop likely to be found around the corner from Starbucks. Pizza Hut is also very popular, and is in the "fine dining" category. My wife and I walked into one on a Wednesday evening and were turned away because we hadn't made reservations. Taco Bell Grande is similarly popular and prestigious; the waiters wear enormous joke-like sombreros that would probably lead to lawsuits from the National Council of La Raza if worn in stateside Taco Bells. Kentucky Fried Chicken is less fancy but is a runaway success in China, as it is in most of Asia.

Through my own experiment in the economics of staple foods, I have been surprised to learn that there is such a thing as beer that is too cheap, at least for my taste. On each of my first few days on scene, I kept discovering an acceptable brand of beer that cost half as much as the beer I'd had the previous day. It was the Shanghai version of Zeno's paradox: The beer became steadily cheaper yet never quite became free. I had an early surprise discovery of imported Sam Adams, for 12 yuan, or $1.50 per 355-ml bottle, which is the regular U.S. size. The next day, I found a bottle of locally brewed Tiger, the national beer of Singapore, for 7 yuan, or 84 cents per 350 ml. Soon I moved to 600-ml "extra value" bottles of Tiger at 6 yuan (72 cents per 600 ml), then Tsingtao at 3.90 yuan (45 cents per 600 ml), then Suntory at 2.90 yuan (35 cents per 600 ml). It was when I hit the watery, sickly sweet Suntory that I knew I'd gone too far. There was one step farther I hesitated to take: a local product called REEB (ha ha!), which I often saw the illegal migrant construction workers swilling, and which was on sale for 2.75 yuan. One night, in a reckless mood, I decided to give REEB a try. It was weaker than the Suntory—_but actually better, because it wasn't as sweet.

The signs of China's rise are of course apparent everywhere. We can still see many parts of Shanghai that have escaped the building boom of the last two decades—the streets lined with plane trees in the old French Concession district, the men who lounge outside in pajamas or just boxer shorts when the weather is hot. But to see them we have to look past everything that's new, and the latest set of construction cranes or arc-welding teams working through the night to finish yet more projects. From a room in the futuristic Tomorrow Square (!) building where we have been staying, I can look across People's Square to see three huge public video screens that run commercials and music videos seemingly nonstop. The largest screen, nearly two miles away, is the entire side of the thirty-seven-story Aurora building in Pudong, Shanghai's new financial district. In the daytime, the sides of the building are a shiny gold reflective color. At night, they show commercials to much of the town. "People under thirty can't remember anything but a boom," a European banker who has come to Shanghai to expand a credit-card business told me. "It's been fifteen years of double-digit annual expansion. No one anywhere has seen anything like that before."

My family arrived in Japan just at the beginning of what is widely considered to be its collapse. About the strange nature of that "decline"—one that left Japan richer, and its manufacturing and trading position stronger, than it was during its "boom"—there will be more to say in later reports. But obviously it raises the question: Is this ahead for China? Have we arrived in time to watch another bubble burst? I don't know—no one can—but as a benchmark for later reports, I will mention some of the things that have surprised me in my first few weeks, and I'll do so via lists.

Numbered lists are popular everywhere—the Ten Commandments, the Four Freedoms—but they seem particularly attractive in this part of the world. When I first arrived in Japan, everyone was talking about the "Three Ks"—the three kinds of work for which the country was quietly tolerating immigrant labor. These were what translated as the "Three Ds": the jobs considered too kitanai (dirty), kiken (dangerous), or kitsui (difficult) to attract native-born workers in modern, rich Japan. During World War II, Japanese forces were notorious for applying a policy of "Three Alls" to occupied China: kill all, burn all, loot all. Memories of that slogan made for hard feelings when a Japanese-owned firm recently tried to register the trademark "Three Alls" (sanguang) in China; because of protests, the application was turned down. In early 2006 the Chinese government put out a widely publicized list of "Eight Honors and Eight Dishonors," or more prosaically "Eight Dos and Don'ts," to express what President Hu Jintao called the "socialist concept of honor and disgrace." For instance: Do strive arduously; don't wallow in luxury. I bought a poster with the full list at the local Xinhua bookstore.

In a similar constructive spirit, I now offer "Four Cautions and Two Mysteries." These are meant to illustrate what has surprised me so far and what I am most curious about. It is also a partial and preliminary agenda for future inquiry.

CAUTION ONE: WATCH OUT, JAPANESE PEOPLE!

To get into a talk with a Japanese intellectual or statesman is sooner or later to ponder the effects of World War II. When will Japan emerge from the war's shadow as a "normal" nation, with a constitution written by its own people (versus the one created by Douglas MacArthur) and with a bona fide army, as opposed to something that has to call itself the "Self-Defense Force"? When will the Chinese and Koreans—_and for that matter the Singaporeans and Filipinos and Australians—_stop mau-mauing Japan with their wartime complaints? What special mission and message does Japan have for the world, as the first and only country to have suffered a nuclear attack? Will Japan's view of America always be skewed into an inferiority/superiority complex because of the U.S. role as conqueror in the war? The process is similar to discussions in Germany—_except that Germans tend to be preemptively apologetic about the problems their forebears caused the world, and Germans make no special claim to suffering like Japan's.

The process is not at all similar to discussions about the war on this side of the Sea of Japan. I put this item first, because for me it has been the most startling. "Frankly, we hate the Japanese," an undergraduate at a prestigious Chinese university told me in English. The main difference between his comment and what I heard from countless other young people was the word frankly.

Why should this be surprising, given the centuries of tension between China and Japan? Mainly because of the people who expressed their hostility in the most vehement form: students in their teens and early twenties. They had not been born, nor had their parents (nor even, in many cases, their grandparents), when Japanese troops seized Manchuria in the 1930s, bombed and occupied Shanghai, and slaughtered hundreds of thousands of Chinese civilians during the Rape of Nanjing. Wartime memories die hard, but you expect them to be most intense among actual participants or victims, and therefore to fade over time. Israeli teenagers aren't obsessed with today's Germans. I was not able to spend much time at universities talking with students when I was in China in the 1980s, but I don't remember anything comparable to today's level of bile.

The breadth of hostility surprised me for another reason. For years I have been skeptical of the idea of an anti-Japanese resurgence in China, viewing it as government-manufactured sentiment designed to deflect potential protest toward external enemies and away from the Chinese regime. In a new book called China: Fragile Superpower, Susan Shirk of the University of California at San Diego gives a detailed account of occasions when the Chinese government has deliberately drummed up anti-Japanese sentiment—or damped it down when it seemed to be getting inconveniently robust.

In a country where media and education are as carefully controlled as they are in China, all public opinion is to an extent manufactured. "The students are excited," a professor at a leading Chinese university told me. "They can be calmed down." Still, I don't view anti-Japanese sentiments as a ploy anymore. "You say anything at all about Japan [on a blog or computer bulletin board], and there will be ten thousand posts immediately," an official of a Chinese high-tech firm told me. "The mob effect can get out of control."

Partisans of Baidu, the main local search-engine company (which is listed on NASDAQ and has Americans as its main investors) recently ran a blog campaign touting it over Google. One illustration was Google's supposed inability to return any results for searches on "Nanjing Massacre" (or "Nanking," the older Western spelling), whereas Baidu returned plenty. There was a technical reason—Google's servers are outside China and thus must cross the government's "Great Firewall" to send results to users in China. The firewall routinely screens out references to "massacre," as in "Tiananmen Square massacre," and so it blocked Google's results. Baidu's servers and resources are all inside the firewall, and have been pre-scrubbed to remove references to Tiananmen and other prohibited topics. Google has since made adjustments so that it too can report on Nanjing, but the episode showed the sensitivity of the issue.

The main trigger for renewed Chinese protest against Japan has been the (idiotic) persistence of Junichiro Koizumi, Japan's former prime minister, in paying ceremonial visits to Yasukuni Shrine, in Tokyo, where 14 Class-A war criminals from World War II are among the 2.5 million Japanese war dead the shrine honors. Koizumi recently stepped down after five years in office, but his successor, Shinzo Abe, has refused to rule out continuing the visits. When I've asked Chinese students what they want from Japan, they often say an end to the Yasukuni visits and "an apology." Formal apologies have in fact been offered many times by Japanese officials, and even by the current emperor. If the Chinese are looking for something like German-style ongoing contrition, this is not in the cards. Twentieth-century history, as taught in Japan, holds that Japan itself was the ultimate victim of the "Great Pacific War," because of Hiroshima and Nagasaki.

There is one tantalizing further twist to the syndrome. When I have asked young people why they should be so wrapped up with events seventy years in the past, the reply is some variant of: "We Chinese are students of history." There are certain phrases you hear so often that you know they can't be true, at least not at face value. Yes, China's years of subjugation by Western countries and Japan obviously still matter. But the history that is more recent but less often discussed is that of the Cultural Revolution, from 1966 to 1976, when the parents of today's college students were sent into the countryside and often forced to denounce their own parents. In an eloquent new book called Chinese Lessons, John Pomfret of The Washington Post recounts the ways that his classmates from Nanjing University, where he was an exchange student in the early 1980s, bore the emotional and even moral imprint of those years. They'd been made to do things they knew were wrong, and they found ways to rationalize away that knowledge. So far every student gathering I've been to has included a volunteered reference to the evil Japanese, and none has included a reference to the evils of Chairman Mao (whose picture is still on every denomination of paper money) and his Cultural Revolution.