Long-Term House Hunting, Local Style

Today's weather:  High = 25  Low = 19
Cloudy
 
There is no great rush to find a new place, nor any desire to cut my current lease -- you lose the 1 or 2-months deposit if you break the lease before the year is up.  The deposit system is mainly an economic punitive system to discourage people from leaving, as opposed to an actual damage deposit.  Locals would totally agree with that last statement as they even told me so.  The system only works too well.  T
 
The place I'm living in now is not necessarily bad or anything, it's actually a rather a good deal which is why I picked it in the first place.  The problem is that there are many better places out there which I'm discovering after the fact.    Unfortunately, the housing situation in Shanghai is a HUGE deal, and it matters more than I would have imagined.
 
Actually I've lived in 15+ apartments in China over the years but precious few of them have been 'above satisfactory' or places I would want to stay in for any long period of time.  Part of this may be due to my own pickiness, but I've noticed a recurring pattern in house hunting that I want to put a stop to. 
 
The first thing is that there is a lot of shitty housing out there, and I mean a LOT, and especially in terms of what foreigners are being shown.  This is what pisses me off the most, in that upon arrival to a new job or location in Shanghai or other parts of China, the expat will be shown a bunch of crap -- mainly by agents or connections directly to the empoyer -- and then asked to pick something quickly, where the rent is invariably more expensive than what the locals would pay.  The whole process takes a matter of days, and most expats will pick a place quickly because they don't have the time or the knowledge to do otherwise.  Even experienced people get bitten by this, as the whole process has a sense of built-in artificial urgency, both from the foreigner looking for the house and the people showing various places. 
 
I don't think anybody wants to move into a shithole, but the fact of the matter is that low quality dominates in China, and the NORM is for housing to be poor quality here and with a whole host of negatives.  It's not just housing, this applies to practically every Chinese product out there.  Sad to say, my Chinese friends would agree with this.  In this culture, they cut corners in production and accept a certain level as 'just ok' without going above and beyond the standards to produce something of quality that surpasses the basic minimum.  Frankly, this attitude is why China will never become a developed country.
 
So going back to housing, if you want to find something good, you're gonna have to look your ass off and compare places before the fact.  Blaming the agents or the system doesn't work, even though the way they work to 'rush you into a lease' is infuriating.  But as they say, buyer beware, or renter beware.  My local friends all tell me that they spend months looking for a new place, and they research the area in detail, making a list of requirements, then going from agent to agent and shopping around.  Negotiation also takes a long time, and they are very picky.  None of my local friends buy into the bullshit that the agents say about places being few and far between, this deal can be snatched up quickly, the price is already cheap, etc. etc.  
 
Unfortunately, foreigners do buy into it, including myself because it seems that the "opinions" offered are authoritative, when in fact they are a bunch of hot air.  Again, hate to say it, but Chinese people have a low reputation and are famous all over the world for lying, stealing, and cheating and making an art out of it.  Local friends would be the first to agree with this, and THEY are always the ones telling me to be careful and offering good stern advice in a motherly tone.  The locals who care by offering such advice are also the locals who distrust and hate their lazy fellow countrymen masses for keeping their country in the shits when it could otherwise have so much potential.
 
Back to housing, what my local friends also do is use a variety of personal contacts, especially people already living in the area of choice, and get references, etc..  Then if there is a house they are keenly interested in they don't show interest  (I always do, big mistake) and what they do is ask to make deals where they can "check it out" before signing anything.  This might simply be staying in the place for a week or so which is highly recommended because you can then spot most of the negatives you wouldn't otherwise see on the initial showing of the room.   For example the place might have noisy neighbors, there could be trains running by, or what they say is "close to a subway station" could be in fact a 15 minute walk to get there.  Fail.
 
The next step that the locals would do is then meet the landlord and socialize/chat/whatever to see if there is a good vibe or they get along with the person.  If so, then the lease negotiation begins and let me tell you, the locals will nitpick over every little detail with both the agent and landlord present.   Generaly speaking, they go for long-term leases, at least 2 years, since they can "lock in at a lower rate" and it makes up for all the time and effort in searching for a place to begin with.
 
So if this is how the locals do it, then why are the foreigners not doing it.  Great question.  It seems that the locals can use such an approach as mentioned above because:
 
a.  They know they'll be in Shanghai for awhile and want someplace good to stay while there
b.  They are staying elsewhere while looking for new places and the process is not urgent
 
It's about time I started learning from he locals.
 
 

National Holiday: Not a Huge Fan

Today's weather:  High = 28  Low = 18

Sunny

 

A friend quote a somewhat humorous statistic on "Chinese holidays", but it was frighteningly accurate into the mentality of how they view holidays.  The statistic was bragging rights from the Chinese government about how many holidays their citizens enjoy:   about 120 days of the year to be exact!

 

Sounds like a prized jewel, but not really, because they count the weekends as given stat holidays.  Sheez Louise.

 

This view of weekends being "given holidays" is actually rather frightening.  In this frightening Chinese view, the weekends are not entitlements to a day off from work, nor do thy have ANY concept of a Sabbath days rest.  None whatsoever.  The flipside of this view is that any day of the 365 days in a year is a potential workday.  The concept of a weekend is indeed a foreign one.  While the Chinese may not necessarily work on Saturday and Sundays, many of them in fact do, and it is hard to distinguish a weekend from a weekday in general terms.  For example the banks are always open 7 days a week, the rush hour happens on the weekends too, and people will often ask me, "Are you working today" if it's a Saturday, the same as they'd ask on a Monday. 

 

Given this context, it is extremely common that the Chinese government will use weekends as 'make-up days' for public holidays, such as the recent National Day.  The math ends up being very depressing with how this works out.  I've already shared it with colleagues but will repeat the dim news over here too.

 

We got Oct 1, 2, 3, 4, 5, 6, 7 off for National Day.  Yes that was 7 staight days in a row but don't go popping the champagne just yet.

 

Oct 1 and 2 were already a weekend, so in effect it was 5 days off

 

We just finished working the Oct 8 and 9 weekend as make-up time, so in effect we only got 3 days off

 

We have to work 7 days straight now, so the two "overtime" days on Thurs and Fri next week (if we make it that far) will chip into more, so we only got 1-2 days off, depending on how you look at it.

 

Sorry, the whole thing is a fail, and the national holiday becomes useless.  Besides the fact that it's crowded and not really a holiday if you're traveling around during that mess anyways, there are no other holidays until New Years break which translates into a LONG stretch of work.  97 days until the next break but who's counting.

 

The obvious question to ask is WHY they do it like this, but after 10 years of being in China, nobody really asks why.  My guess is that the Chinese public simply does not view weekends as entitlements or sabbath rest days the way that western cultures do.  In their view, every day is a day to work with no rest, and it's a horrible way to live.  Meanwhile, the idea that weekends are "given" as holidays means they can be taken away.  This clever little bit of addition and subtraction can be manipulated and propogated as a "golden week" where the public is led to believe they have this awesome long break, and they go traveling in droves and spend tons of cash.

 

According to the recent newspapers, they traveled in record numbers this past holiday and spent nearly 300 million RMB.   Now the party is over, if you can even call it that, and we're making up the time on weekends. 

 

As I told the students in class today, I don't want to be teaching on Sunday just as much as they don't want to be in class, but we all have to suffer together.

Economics in Action: Apartments

Along with motorycyles, the apartment rents in Shanghai can be thought of as a long-term depreciating asset because they are expensive to begin with, and continally creeping up.  A useful website shows that the increase in rents is not uniform and it varies greatly depending on a whole host of factors, but yes, the average rents are going up indeed.

 

http://www.haozu.com

 

By the way, this is a good rental website in general and is very useful if you can read Chinese

 

One could wrongly conclude that the Shanghai rental situation is a win/lose situation.  That is, a win for the filthy rich landlords and a loss for the tenants.   While the landlords are certainly rich, they are actually making their money off the house selling price increases.  The rent is a very small fraction of the house price, which means the landlords are not being compensated much in this way.  

 

Taking into consideration this fact, and the law of opportunity costs (see last post), you could say that the rental situation is lose/lose.  

 

For example:  the landlords are not selling the house for the duration of the 1-year rental lease as they are forbidden to so.  If they sell, they could make a ton of money, but they are instead collecting rent.  As a very rough calculation, a year's worth of rent in the neighorhood I live might bring in 50,000 RMB, but the landlord could sell the house at 1.5 million RMB right now.   Assuming that the house appreciates at 10% during the year, then he basically lost 100,000 RMB worth money for the year.   I got this by roughly taking 10% of the house price and minusing off the meagre 50,000 RMB in rent that he chose to collect instead.

 

Of course, the landlord could sell later on, make heaps of money, and then re-rent it out, but the fact remains is that he lost a considerable money *for this year* that he wasn't selling it when he could have been selling.  Since it is a well-establised fact that people make economic decisions at the magin, then the landlord lost in the margin  (this year).

 

It's not much better for the tenant as 50,000 RMB is a lot of cash from a renter's point of view.  The problem the tenant faces in Shanghai and elsewhere is being locked into these one-year rental leases.  For that matter, shopping around for apartments becomes critical, yet landlords and agents discourage this greatly, and want to rush the the tenant into signing the lease asap. 

 

The reason why the landlords want to rush a lease is that they think they are losing money if the house remains empty without collecting rent.  However, that is somewhat of a bullshit argument because we established above that they are actually losing a LOT MORE money by choosing not to sell the house.

 

My guess is that the landlords conisider the house investment to be extremely long-term, given how expensive it is to enter this market in the first place and the complex nature of how money gets pooled together from relatives and their work unit to buy the house, etc.   It's not like they can just sell at the drop of a hat, even if the market makes it profitable to do so.  They may very well see the meagre rental income as what happens to them at the margin, and so the "can't leave the place empty" argument becomes more real to them.

 

Having crunched the numbers in detail on my own rent payments and compensation from my school, it looks like I will actually break dead-even by February and then will turn a consideable profit by the end of May when my current lease ends.  With that profit, I am going to splurge on a much nicer apartment in the same general neighorhood which kicks butt, and sign a new lease in May next year.  The only catch is I need to stay the course of my current lease.

 

This isn't terribly easy as a number of things have gone wrong at my current place incuding:   busted plumbing, busted electricity, and lazy repair people who don't come as promised when I call them and have pre-arranged the times.  As typical in China you have to be pushy and rude to get things done and I haven't.  In addtion, there are rampant construction and renovation projects going on upstaris, in a new building that can't be more than 5 years old.  There is the ongoing problem of trains running outside, which has ben solved with earlplugs and a computer-generated white noise program ... see posts a long way back for details on that.   Finding a quiet place to live this city is like finding a needle in a haystack but I'm holding out that it CAN be done!

 

Meanwhile it's not the end of the world and these problems can be dealt with ... but it's sure tempting in situations lke this to cut the lease and run to another place.  Economically though that'd be a loss (you don't get your 2 months deposit back if you cut the lease)

 

They are really strict about these leases and they don't have flexible leases where you can check out a place for 3 months to see if you like it, etc. etc.    Unfortunately not, you have to sign for a year for most cases, pay 2 months deposit, then pay 2 or 3 months rent up front.  It's not just Shanghai ... I had to negotiate my friends out of jams in Wuhan last year as they didn't know how the system works.  

 

On the other hand, it's not really fair to complain about the lease situation because the landlords count on a reliable source of rental income if they forego selling the house ... and that's what the majority choose.   Meanwhile, it is not difficult to enter into a lease, in fact the registration process is actually easier for foreigers than staying in a Chinese hotel for example!!  Given a guaranteed place to sleep, and for privacy, and for minimal police hassles, all of which are EXTREMELY VALUABLE in China, then the tradeoff of dealing with strict lease timelines and other annoyanes can be accepted.

 

Meanwhile, not wanting to repeat past mistakes over and over again I'm now going to the other extreme and will start looking at potential new places to live 6 months in advance and scout out dozens and dozens of options to assess a whole host of variables.  An agent once told me there is no such thing as a pefect apartment, before he screwed me over with a shitty lease.  My friends tell me the contrary, that there is a perfect apartment. 

Economics in Action: Motorcycles

Today's weather:  High = 27  Low = 15

Sunny

 

With the holiday over it's back to work.  Aw shucks.  Aside from that, it's been a somewhat enlightening time crunching numbers on a spreadsheet for two ongoing financial things about Shanghai expat life that concern me outside of work:   apartments and motorcycles

 

What I want to illustrate with this post is the difference between how an accountant or an economist would write up a financial spreadsheet and interpret the results.  I side heavily with the economists in the way I do things, and so my bias will be obvious here.   However, I also want to show that when writing up spreadsheets or reading ones that others do, you need to be careful in what the spreadsheet is NOT saying, as well as what it is saying.  In other words, if an accountant presents a financial spreadsheet to you in a way that looks fixed and absolute, then he is probably cooking the books.   The economist would be the first one to tell you that a spreadsheet can't be truly objective or absolute due to opportunity cost. 

 

Nonetheless, a spreadsheet is powerful since you can project in the past as well as the future and then use that information to make decisions in the present.  Decisions such as:  is it worth buying a new motorcycle now or later?  Is it worth it to switch to a new apartment now or run the course of the current lease until next May?  After crunching the numbers out, the answer couldn't be clearer:  wait until spring for both.

 

We've talked a lot about motorcycles in the last few posts, let's continue to do so here.  In general they are a depreciating asset.  For example I paid around 10,000 RMB for both the former Yahama 125cc scooter and motorcyle, both bikes were new at the time, and I sold for approximately 4500 RMB each.  Both bikes lasted roughly a year and got about 10,000 km on each of them.  After calculating fuel costs (about 0.2 RMB per km) and various work put into the bikes (oil changes, clutch work, chain repair jobs, fake plates, etc.)  it turns out that each bike was an overall total "loss" of 8000 RMB for the 12 months I was running each bike.    That translates into about 667 RMB per month of a loss over the course of 2 years. 

 

At this point, an accountant would look at the spreadsheet, say it ends here, and I came out a loss, boo hoo, sucks to be you. 

 

However, an economist would consider opportunity cost and ask the question, "How much would the transport cost each month without the bike?"   To answer that, the monthly transport spreadsheet I have for a bike-less September shows roughly 500 RMB as I used the subway a lot and took cabs occasionally.  So the bikes almost broke even, with a slight loss.

 

But keep in mind the 500 RMB figure is since I live close to a subway station and Line #1 is a convenient option and taxis aren't essential in Shanghai.  Last year in Wuhan, it was a different story where they didn't have a subway and the traffic jams on the ground were also atrocious.  Factoring in a cost for wasted time, then the real cost without a bike would have been closer to 800 RMB, if not 1000.  So in this sense, the bikes were an overall profit.

 

All this being said, you can see how tricky it is to say what the criteria is for "coming out ahead" or "being at a loss"  The economist knows this, which is why he doesn't rely too heavily on spreadsheets in the absolute sense, yet as a guideline, they can be useful for economic decisions.

 

 

Time Share Motorcycle

Today's Weather: High=24 Low=15
Haze

With the national holiday coming to an end, we now need to work 7 days in a row as make-up time. Don't even get me started on this.

Now the long stretch begins where the next holiday won't be until Christmas. Meanwhile the Yamaha YBR125 motorcycle looks to be back in my posession for another month as Christoph (German guy I sold it to) is heading back to his home country for that time.

It turns out we've agreed to a time share arrangement of splitting the bike, not unlike the "Beijing bicycle" movie arrangement! We've both put a fair amount of work into the bike so it`s a fair deal. Also this shows some trust is involved as we each have separate keys to the motorcycle and are assuming that neither party is going to take off it!

Meanwhile my money situation continues to remain rather grim and tight .. as such I'm delaying the purchase of the YBR250 which would be the natural upgrade. Will get that done in March most likely when my finances improve

Thailand ... Again!

Winter break tickets ... booked!  Well, not exactly, only half of it.

 

Air Asia had a smokin' deal online whereby if you booked your Spring Festival tickets during National Day (3.5 months in advance), you could get obscene discounts.  And sure enough I did, with a flight from Macau to Bangkok only costing $50, even with the taxes!  

 

However, there is a major catch to this plan, in that I still have to travel through China to Macau first.  THAT is where it is impossible to book ahead this far in advance as the Chinese never do things that far ahead.  Domestic fights to the usual places like Guangzhou and Shenzhen are not available right now and won't be until December.

 

Direct international flights from Shanghai to Bangkok and other destinations are very expensive, even now, if you book far in advance.  Unfortunately it is getting very difficult to book international flights out of Shanghai to pretty much anywhere now for a good deal.  The reason is simple, the rich Chinese going abroad in droves can pay more, so the airlines charge more.   

 

On the other hand, domestic flights remain a very good bargain which is why the best way to transition frm China to SE Asia is in two hops.   One domestic, the other a cheap Air Asia internatinal flight. This will be the modus operandi for the winter break where (yawn) I'm going to Thailand.  Yes, again

 

Actually I'm going to revisit Burma and do it properly this time.  If you recall from my bike adventures last August, I bungled up the Burma section with a few mistakes that gave me a lecture and a free lunch with the military.   More on that story here:

 

http://www.crazyguyonabike.com/doc/page/?o=1r4vFZo&page_id=256076&v=65

 

This time I'm going to apply in advance for a Burmese visa and fly in from Bangkok to Yangon, also with Air Asia.  Thanks to colleagues at our school who already did Burma last year I'll replicate their adventures for two weeks, learn from all their tips, and hit the highlights of Yangon, Mandalay, and Bagan.

 

But there are two little twists addd in.  One is I'm doing it on a bicycle, that is non-negotiable.  Actually it makes little difference in terms of speed and time, as the conventional transport situation is so slow there anyway.  The second little twist is to fly domestically from Mandalay to Tachilek.   While in Tachilek last August on my little two-day Burma stint, I researched domestic flights and found good connections on the above route.  Recall that Tachilek is exactly where I crossed into last August from Thailand with a border pass.

 

The gameplan then is to essentally pick up where the last trip got aborted and bike the 200km stretch north into the border with China's Yunnan province.  Of course, such a plan is not guaranteed, but at least I can ensure I will have the proper papers if approached by the military or passing through checkpoints.  Wouldn't it be a hoot if they recognized me again and gave another lunch. In theory this is doable as the Lonely Planet says it is, provided I have both Burmese and Chinese visas arranged in advance, which I will.  

 

However it depends on many variables and who knows.  In the event the plan works, I'll book a domestic flight once in China a week in advance from Kunming to Shanghai, then explore Yunnan on the bike.  If the plan goes belly up I'll cross into Thailand and explore the Isan region in the NE for a change, and then head back to Shangai directly from Bangkok. 

 

Plan B would be a lot more expensive as the Air Asia options are not possible on the return stretch due to the late arrival times in places like Guanzhou, etc. 

 

Progress on Masters Degree

Today's weather:  High = 21  Low = 17

Drizzle

 

This past summer I got accepted into an online project-based masters program called MMT which is Masters of Mathematics for Teachers.  It is offered by the University of Waterloo back in Canada and has just started last year.  The program, I must say, is *top notch* so far and my experience has been the same as several math teacher colleagus from other offshore schools in China who are also doing this  (Dalian and Wuhan)

 

I came across this program while perusing the Waterloo website for solutions to the annual math contests that we run at our school.  At the time I figured, what the heck, this program looks realy cool, let's check it out.  This was also encouraged last year while meeting Waterloo reps who made the trip all the way to Shangers to do math workshops for the students at our school.  To make a long story short I applied and got the references in.  I originally wanted to do the program starting last January term but it was too rushed, and so opting for a September start was a much wiser choice.

 

For others interested in the program, point your browsers here:

 

http://www.cemc.uwaterloo.ca/mmt.html

 

A list of the courses can be found here

 

http://www.cemc.uwaterloo.ca/mmt/mmt-courses.html

 

Here is what I like most about the program, from the outset:

 

"The MMT is designed to provide current and aspiring teachers of mathematics with the opportunity to expand their knowledge base. In addition to providing a deeper understanding of mathematical foundations relating to core secondary school curricula, students will also be exposed to significant areas of applications of modern mathematics. The primary focus of the program is on mathematics and its applications rather than on pedagogy, but it will also challenge its students to look for new and innovative ways in which they can bring their newfound knowledge into the classroom."

 

Maple Leaf at Dalian and Wuhan was offering a masters in pedagogy which I turned down, opting to wait things out until a better alternative came forward ... such as the MMT! 

 

At the time, teachers in Dalian and Wuhan campuses were lunging for the masters for the sake of a masters, but I wasn't about to jump on this bandwagon for the simple fact that I already took courses in pedagogy and ESL teaching strategies.   Big woopie ding, it says "masters degree" but that title is meaningless unless the courses are of relevance.  For me, this math masters is right up my alley as it focuses on the content knowledge, and in a sense, brings me back to university to complete the math gap that I missed out on.

 

Right now I'm workng on the computer software course.  It's a lot of work, as I'm essentially doing computer programming, but the online courses are very well organized. It takes about 1-2 hours of extra work per day but you'd be amazed at how easy it is to carve out that time.  It's really a simple matter of coming home from school and doing masters work instead of vegging out on the couch and watching 5 kuai DVDs.

 

Since this is a project-based masters there is no need to write a thesis, unlike my Dalian and Wuhan counter-parts who did the pedagogy masters.  Suckers.  The timeframe is 2-3 years to complete this masters, which is very likely.  If all goes well I'll be done in 2 years then ready to take some time off and ride a bicycle around the world.