William J. Holstein
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TOKYO, May 2007
The eternal question about Tokyo and Japan is, “What has changed?”
The Imperial Palace still dominates the heart of Tokyo, and I ran around it, just as I did when I spent so much time in Japan in 1989. I always think of the palace as a symbol—at the heart of the Japanese system lies much mystery, just as the palace itself is heavily guarded and usually impenetrable.
So much of the fabric of life for both the resident and the visitor is shaped by the subway and train system, which is the most advanced of any I’ve seen in the world. I didn’t take a single taxi, and I moved all around Tokyo. The trains stop at precisely the scheduled moment at precisely the right spot where people have lined up in anticipation. (I witnessed only one rush hour scene in which people pushed their way on. The normal deference to others suddenly changed, and real brute physical force was employed. No one complained.)
I find it amusing that Japanese pedestrians of all ages and walks of life still wait at intersections when the light is against them but no traffic is coming. If the signal says “Don’t Walk,” they don’t cross. They are a very disciplined people. It’s not that the police force them to obey; it’s a social control mechanism. In years past when I’ve charged across the street against the light, I could read the body language of Japanese disapproving of me. This trip, I obeyed. Maybe I’m being Japan-ized.
On the subways, they have “courtesy seats” reserved for old folks or disabled people. Little signs tell other people seated nearby to turn their cell phones off, presumably because the radio signals might trigger someone’s pacemaker. People do not talk on their cell phones on either the subways or trains. It’s another social dictum. Everybody is scanning their emails, but no one is talking. You never hear a phone ring even though everybody has a phone in their pocket or purse.
Because I spent a lot of time on subways and in trains, I spent a lot of time looking at Japanese people, up close and personal. Their clothing is very expensive and stylish, particularly in the trendy Roppongi Hills area where I stayed. The vast majority of businessmen wore dark suits. I felt such overwhelming social pressure that I didn’t even bother to get out my tan khaki suit; I didn’t want to be conspicuously out of step.
But I thought I could detect that, overall, the Japanese are relaxing a bit in terms of how they wear their hair and in the range of clothing styles that you see. The straightjacket of conformity has eased somewhat. I think it is a reflection of increased wealth and increased confidence in who they are as a people.
Who are they as a people? That’s a delicate question. If you study the faces, it’s clear that some have high cheek bones and narrower eyes, giving away their origins in Manchuria or China, while others are rounder people with rounder eyes, suggesting Southeast Asian origins. They also have many different kinds of hair, some curlier than other. Skin colors vary considerably. So the idea that they are a homogenous people is just bunk. Different waves of migration to Japan many centuries ago from different directions created a mixed race. The national ideology is that they are a homogenous people, and perhaps they are culturally and linguistically. But not racially.
One of the most amazing things about their physical appearance is the bad dentistry. They have just awful teeth. Even a beautiful, well-dressed woman can open her mouth and reveal the need for thousands of dollars worth of braces and cosmetic dentistry. Cindy Kano, who works at Fortune and organized much of my schedule, says the Japanese don’t wear braces as children because they are worried about being singled out for being different and therefore bullied. She says that slowly younger Japanese are turning to braces. Certainly the Japanese now have the wealth to fix their teeth. It’s a huge business opportunity, I would say.
One clear sign of change: The Japanese don’t work on Saturdays as they once did. Prosperity is giving them much more leisure time.
The shopping is all very high-end, particularly in the new areas of Tokyolike Roppongi Hills and the new Midtown complex, which is anchored by a Ritz Carlton Hotel. You’ll find all the Armani, Zara and YSL you could possibly want, plus other shops I’ve never heard of. Novespazio, anyone?
One of the ways you can see the technological progress that the Japanese are making is in their toilets. Every single toilet I saw, whether in a hotel or in a little restaurant or bar, had a heated seat with a panel of controls that allows you to give yourself a little douche. An arm shoots out and sprays whatever part of your anatomy needs spraying, with water whose temperature you can control. And the driers that dry your hands after washing are very newfangled. You insert your hands into these devices, and air blows at you from two directions, greatly speeding up drying time. Paper towels are rarely used. All in all, the bathrooms are a bit intimidating. I often had to spend more than a moment trying to figure out how to flush.
I also felt stupid when it came time to throwing away a bottle or can or just plain garbage. The vast majority of trash receptacles are divided into three or four categories for purposes of recycling. If there wasn’t a sign in English saying “Plastic” or “Glass,” I had to peer inside to see what I was supposed to throw away.
So, all in all, the Japanese have built a very sophisticated, intricately organized society. The notion that they “lost a decade” and are somehow dying a slow death as their population ages is poppycock. It’s tragic that the American media has withdrawn most of their reporters from Tokyo, because I continue to believe that it’s a place that really matters. If nothing else, the Japanese are going to be competing against U.S. companies ever more strongly. They are not going to disappear. I know I’ve been giving this lecture for decades, but it bears repeating: We either come to understand who the Japanese are and how we should engage with them, or we will continue to be marginalized in this part of the world, and we will continue to see our own standard of living eroded. Thus endeth the sermon.
HONG KONG, May 2007
I’m settled in, in Business Class, on a Malaysian Airline flight from Hong Kong to Kuala Lumpur. I just asked my flight attendant where she is from. Borneo. I don’t think I’ve ever met anyone from Borneo. (I would guess she has some Chinese blood; she doesn’t look like a full-blooded Malay.) And I can see the Vietnamese coast down below. The land is under the cover of clouds, but I can see the river delta that runs through Saigon into the ocean. So Saigon, or Ho Chi Minh City, is just below.
But before I launch into the last leg of my journey, into what the British called Malaya, here are my reflections on Hong Kong.
It’s still an incredibly dynamic place on the eve of the 10th anniversary of China’s takeover. Hong Kong has completely repositioned itself since I first arrived in 1979. Then it was a manufacturing hub for the U.S. and Europe mostly; today, it has moved virtually all its manufacturing across the border into China. It is joined at the hip with China in ways that once would have been unimaginable. Chinese tourists speaking Mandarin are all over the place, including at the Island Shangri-La Hotel where I stayed. I’d guess they were paying $400 a night. So they have big money. A lot of the shopping at the swank malls and designer shops is also being done by Chinese tourists.
You can feel the tug of Mandarin Chinese and the ebb of the English language. My government driver and I could sometimes communicate better in Mandarin than in English.
The Chinese government has kept its end of the 1997 takeover agreement. You can see the Chinese Communist flag on government buildings, and the People’s Liberation Army maintains forces in Hong Kong, but the Chinese have largely kept their hands off Hong Kong. The joke at the time was, who’s taking over whom? Will the Chinese take over Hong Kong, or will the Hong Kong Chinese export their style of capitalism to the mainland? Today the evidence is that it’s been a two-way street, and the Hong Kong folks may have had greater impact on the mainland than the mainland has had on them.
The place has gotten wildly expensive, by the way, as expatriates flock in. It is now standard for an expatriate on a full corporate ride to pay $25,000 U.S. for an apartment annually. A lot of my old friends have been priced out of Hong Kong Island and are commuting on ferries from other islands like Lantau.
The infrastructure boom in Hong Kong continues unabated. More land has been reclaimed from the harbor that separates Hong Kong Island from Kowloon, and huge skyscrapers dominate the skyline more than ever. Some of them are Chinese buildings—the Bank of China and the Industrial and Commercial Bank of China are two of them.
The airport at Chek Lap Kok is vast. I got a car ride into town last weekend, but today I took the train from a stop near my hotel. I checked my bags at the central check-in point and then rode the train to the airport. I never touched my bag again. (I hope it made it on this flight.) New York certainly has not built this kind of airport infrastructure.
Hong Kong is really riding on the Chinese dragon. What’s attracting so many people to Hong Kong is the financial sector, which is deeply tied to China now. The Chinese are trading roughly $22 billion a day (!) on the Shanghai and Shenzhen exchanges, compared with about $7 billion in Hong Kong. Clearly, the Chinese have a stock market bubble on their hands. People in Hong Kong expect a correction, but they have big confidence that the long-term direction is only one way—up. For one story I’m working on, I met people from Merrill Lynch, Citibank and Morgan Stanley who are involved in all the Chinese IPOs (Initial Public Offerings). Many Chinese enterprises and also private companies are raising billions of dollars in Hong Kong.
One negative aspect of Hong Kong’s ever deepening embrace of the mainland is the air quality. I couldn’t feel it because I had some very nice weather. But, at other times, apparently the bad air from factories on the mainland hangs over Hong Kong like a pall. Of course, part of it is coming from factories that the Hong Kongers have built north of the border, so they have only themselves to blame for that pollution. The really big question is, what are the Chinese going to do to get a grip on the air pollution before the Olympics next year? The only answer so far is that they are going to have to shut down every factory for two weeks before the Olympics and then during the Olympics, plus maybe place tight restrictions on auto use in Beijing.
The HK government, which sponsored my trip and organized a very good, jam-packed schedule for me, laid on a helicopter tour one day. It was mildly touristy, but I like helicopters and I said, What the heck? The most memorable part of the trip was flying along the Hong Kong border with Shenzhen, the Chinese district just north of Hong Kong. When I first started covering China’s Four Modernizations and their opening to the world, I can distinctly recall visiting Shenzhen and seeing peasant girls wearing conical Hakka hats who were prodding water buffalo down the dirt trails between rice paddies. There were no buildings to be seen. It was a panorama of green.
But looking out my window now, I could see a city of 11 million people crammed into skyscrapers and other very tall structures. Hong Kong’s population is 7 million, but now an even larger city has sprung up in the rice paddies north of the border. By all accounts, it is not a pleasant place. Peasants and migrant workers come to Shenzhen from all over China looking for work. But there just aren’t enough jobs, so many newcomers resort to crime. And pollution is much worse there than in Hong Kong because so many factories are in Shenzhen.
I had a funny incident one day that in some ways is revealing about how things get done in Hong Kong. It was late in the afternoon on Monday and I had a 5 p.m. appointment with a principal economist for the Hong Kong government, a woman. Getting into my car I had to stretch my leg out in a slightly funny way and RIP! There went the seam in the crotch of my pants. About five inches. I could look down and see my underwear hanging out of my pants. I thought, Holy Shit! How am I going to get through this interview? And how will I manage to find the time to buy a new suit? I am traveling with only two lightweight suits, plus a spare blue jacket.
Well, I kept my jacket on, rather than removing it, because that covered one or two inches of the gaping hole. And I simply kept my little legs squeezed together during the conversation. I don’t think the lady economist noticed anything.
The next morning I called housekeeping at the hotel and they sent someone up to look. The key questions were, can you fix this today and how much will it cost? Does it make more sense to get a new suit? I left my driver’s cell phone number and went on my way.
Within an hour, the hotel had called to say they could repair the seam for free as long as I would pay to dry clean the suit. Bam! Problem solved. My suit was fixed and back in my room within hours. (Of course, I paid more than $100 U.S. for that plus laundering three days’ worth of shirts and underwear. Getting laundry done while on the road is always a rip-off.)
I didn’t do much shopping in Hong Kong because I’m traveling so heavily and there’s just a limit on just how much I can carry. I bought only two Giordano knit shirts for $180 H.K., which is about $25 U.S. I would guess that each of these would cost $30 to $40 U.S. at retail. Hong Kong remains a great place to shop.
I saw tons of friends. Rob and Sheri Dorfman were good friends when Cathy and I lived in Yonkers, and they’re still there. Generations ago, his family fled Russia to Harbin and then Tokyo and then Hong Kong. She’s a nice Jewish girl from the States. Their children are both grown now. We talked a lot about Cathy and old times. Rob runs a company of $200 million in sales and has nine factories in China. He supplies Target stores.
Then there is Jim Laurie, formerly of ABC News, whom I knew in Beijing. He’s now teaching journalism at Hong Kong University and is married to a younger Vietnamese wife who keeps running back to Vietnam to invest in real estate. I saw Kerry McGlynn, who handled PR for longtime Governor Chris Patton, the last Brit. Kerry, who is 65, also lost his wife to cancer after a five-year battle, so we compared notes on all that. He’s now a special advisor to Cathay Pacific. (I asked for an upgrade to first class on my return flight from Hong Kong directly to New York. We’ll see what wonders he can work.)
I saw Peter Randall, a Brit, who worked for the Hong Kong government in New York. Now 64, he’s currently doing contract writing for the Tourist Authority. He lives with a slightly younger Hong Kong Chinese woman. Sarah Monk, who was once a journalist but later went into PR for the Hong Kong Trade Development Council, came to the Foreign Correspondents’ Club for drinks and dinner. (I spent a lot of time at the FCC—the prices are just so reasonable, and I don’t have anyone to pay my Hong Kong expenses. I’ll take them against my taxes, but obviously I wanted to keep them as minimal as possible.)
On and on I could go. Suffice it to say that I am deeply connected in Hong Kong, more connected than I had expected and certainly even more connected now that I’ve spent a week making the rounds.
It’s a great place. I am scheming on ways to spend more time there. I don’t want to live there full-time, but in my new life I need to figure out a way to arbitrage between all that’s happening in Chinese-speaking Asia (and indeed Asia as a whole) and what Americans need to know and must know. The sense you get from being in Hong Kong is that people are building futures and are very confident about their prospects. It’s a very different feeling than the one I get from so many Americans, who are just trying to hang on to what they’ve got. Certainly my two weeks in Tokyo and Hong Kong reinforce my conviction that Rome was and is positively Third World. The jury is still out for New York and for America as a whole—we can either go the way of Europe and become one great big museum dedicated to the past, or we can try to innovate and build and create wealth. Here endeth the lecture.
KUALA LAMPUR, May 2007
I had remembered Malaysia from our visit in the 1980-81 time frame as being quite interesting because of its ethnic mix. It’s a place where you can sense the clash of civilizations. The Malays are the dominant grouping, with about two-thirds of the population of about 20 million. The Chinese, who came as traders or merchants from the north, make up 30 percent plus. And Indians, many of whom the British imported as laborers in the rubber plantations, make up 4 or 5 percent. After a nasty bout of racial strife in 1969, Malaysia had become something of a sleepy place, quite insulated from the rest of the world, it seemed.
So, upon arrival at Kuala Lumpur’s vast new airport, I proceed to immigration, and there a young Malay woman wearing a scarf on her head and the robes befitting her Islamic tradition starts to inspect my passport. I hear a faint drift of music in the background. I drill in my limited auditory faculties, and it sounds like American rap. It IS American rap. It’s Eminem. I can’t resist asking her, “Is that rap?” Yes, you knew, she says.
Doesn’t everybody?
That started my reintroduction to Malaysia after an absence of at least a quarter of a century. The ironies abound—whereas Cathy and I drove from Singapore to Malacca and then to Kuala Lumpur with only goats and motorcycles on the roads, today there are six- and eight-lane expressways running right next to the distinctive onion-shaped domes of mosques. You can see the women in head scarves eating at McDonald’s and Kentucky Fried Chicken. There are Starbucks joints everywhere it seems. “They listen to Britney Spears and eat donuts from Dunkin Donuts,” says my friend Assif. In short, Malaysia is a place where Islam coexists with what we in the Western world regard as modernity. If nothing else, Malaysia is proof that Islam does not have to be in fundamental conflict with modernity. It can be a layer of civilization and culture that coexists with others.
The national language is Malay, but it has absorbed many English words. School bus becomes “bas sekolah,” police becomes “polis,” and central becomes “sentral.”
Here are my notes:
--They drive on the left hand side of the road, as the British mandated. So I now have spent more than two weeks in countries where they drive on that side. I obviously didn’t get killed crossing the street. My worry now is that I’ll get back to Manhattan and get nailed looking the wrong way on 42nd St.
--The explosion of wealth is amazing. My friends Assif Shameen and Laxmi Nakarmi take me to the shopping mall beneath the Petronas Towers, the tallest buildings in the world. There one finds Cartier, Givenchy, Chanel, Hermes, Gucci and all that. Malay women, wearing their head scarves, buy some of it; but the other big shoppers appear to be the Saudis who have adopted K.L., as it’s called.
I was early for what the locals called “Arab season,” but I saw a few dozen Saudis. Their women wear all black, and some of them even wear the veils that cover their faces. Yet, they too have embraced some aspects of modernity—I saw a couple of them talking in a very animated way about their VCR camcorders. I also saw many places that catered to the Arab crowd with Arabic signs and places for Arabs to sit and smoke the hookah.
--A word about my friends. Assif is a Pakistani by birth, a non-practicing Muslim. He has lived all over Asia and Australia over the years, but now he lives in Singapore, about a 40 minute flight to the south. (Singapore is right on the equator, by the way; I’m deep in the tropics here.) Laxmi is Nepalese by birth, but adopted Korea as a story and Korean as a language, even married a Korean woman. We worked together for many years at BusinessWeek. Then in my subsequent incarnations at Chief Executive and elsewhere, I assigned stories to Assif. Laxmi invited both of us to the conferences he organizes in Seoul. The two of them are best friends; together, we are a merry band of three. Laxmi left for Seoul the first night after my arrival, but Assif stayed with me for the better part of four days and organized my schedule of appointments.
--The mix of cars on the road was interesting. The government monopoly is Proton Saga, which got a lot of its technology from Mitsubishi Motors. The Saga is the dominant vehicle plus another Proton brand called Waja. I see lots of Toyotas and Nissans, but in my four days, I only saw one American marque—it was a Chevy product and it was made by GM’s Daewoo unit in South Korea. Not a single other American car. The rich drove Mercedes, BMWs and even a couple of Porsches.
--The food here is just great. I ate a lot at the foreign correspondents’ clubs in Tokyo and Hong Kong for cost reasons, but everything here is half as expensive as. (My Hilton Hotel room costs only $100 a night.) So we ate great curry, great Thai food that made me break out in a sweat, Nasi Goreng from Indonesia, Japanese sushi, etc.
But the alcohol policy is bad. To get my evening vodka was painfully expensive. As a matter of religion and national policy, they make hard alcohol very expensive and portions are miserly. That did not warm my heart. Beer is served in more abundance, and the economics made it the beverage of choice.
--They smoke here more than I am used to—mostly cigars, it seems. But in a handful of cases, I could also smell the distinct odor of the clove cigarettes that they smoke in Indonesia, which I recall from my travels there. There are many Indonesians living in Malaysia because this country has been relatively more prosperous.
--The races are getting along, partly because there has been such an explosion of wealth. If everyone is rich, there’s nothing to argue about. But race lies just beneath the surface. We had one Indian taxi driver, a Sikh, who really vented about the “bumis,” or bumiputras. That’s what the Malays call themselves, the sons of the soil. They must own 30 percent of every company, and the best jobs are reserved for them. They dominate the government. “They are a lazy race,” says the driver, who’s looking for a tip and is trying to engage his passengers.
The Indians in Malaysia come from all over India. Aside from the Sikhs, there seems to be a multitude of very dark-skinned Tamils, from the very south of India. Many of them are dark enough that they would be confused as African-American in the United States. The Indians don’t cooperate among themselves because they are from so many different ethnicities and castes. They tend to be professionals—lawyers, doctors, and the like. But our driver complains that they are discriminated against very badly.
The Chinese come from several places in Guangdong and Fujian provinces, and Hainan Island. There are at least five different ethnicities or tribes represented. For the most part, they are businesspeople. In all my reporting for a story about Malaysia’s stock market, for example, everyone I met was Chinese.
The different ethnicities communicate with each other in Malay or English. But I noticed that, when the Chinese and Indians are among their own kind, they revert to their own dialects and/or languages. The Chinese make jokes about what bad businesspeople the bumis are. I’m sure the Malays would have a few choice words about both the Indians and Chinese, but I didn’t actually get a chance to probe their attitudes.
I see some interracial dating and some interracial friendships—but not many interracial marriages or families.
Mainland Chinese are everywhere. Whole busloads of them. They are like the Ugly Americans once were or the Japanese were a couple of decades ago. They are loud and get on their cellphones in coffee shops and places where they obviously should maintain a bit of decorum. They also are arrogant—they have money. Lots of it.
The Japanese are major investors, but are not as visible as the Chinese. They owned the Hilton where I stayed, for example.
--My macro conclusions are that any notion Americans have that countries of the world need American capital or American know-how to raise themselves economically is very dated. Malaysia is still very much a developing nation, much less sophisticated than Hong Kong is. But Malaysia has some strong dynamics for growth. Malaysians can work with the Chinese, Japanese, Europeans and Arabs to get most everything they need. I’m tempted to conclude that nations such as Malaysia are pursuing their own paths in a post-American era. They don’t need our moral approval or our economic guidance. I think many Americans harbor this image of their country as being a moral and economic leader in the world; no one can get ahead unless they have our blessing. That’s a kind of missionary mentality, and it’s all wrong in today’s world. I think we need to recognize it’s a different game, a different era.