Invisible Poor

There has been a recent article highlighted the demographic split of smartphone users in China. You can read the article here as well as the more balanced report here.

In a nutshell, the article postulated that the primary users of Apple smartphones are users between the ages of 18-34, single and low salaried. I found this information quite close to my understanding of life in modern China.

In the last 4 years, I have traveled to China at least once a year, either on my own capacity or for work. Anyone that has been to China will be awed by the immense number of skyscrapers and high-rise buildings constructed even in tier 3 cities. But few know the harsh economic realities for the “invisible poor” powering this economic giant.

Even in the large tier 1 cities, there are many workers that are paid a monthly wage of below RMB 5k or about SGD 1k. This is way below the average required to maintain a normal standard of living in a tier 1 city where expenses can be very high.

These “invisible poor” work in typical office jobs either customer service or back office ops. Most of them start off as fresh graduates and typically do not have a very strong undergraduate degree (三本). They are seen working in offices located along the CBD fringe. These offices look very much like any other modern skyscraper in the CBD. However, most are cramped open offices where employees are expected to complete repetitive tasks that for the moment can’t seem to be automated.

The competition in China is intense and without financial assistance from their families, these workers would not be able to afford the lodgings that put them within 1 hour from their workplace, much less their source of weekend entertainment. Rental can cost close to 30% – 50% of their monthly salary.

Despite this, I couldn’t help but notice that many of them, at least in the company that I visited, were carrying the latest model of iPhones. For this demographic, it seems like trying to “strike it out” and being seen as successful is the most important indicator to others of their ability.

Understandably, due to the low pay, most just do their job and are gone as soon as they can clock out. Job hopping is also extremely prevalent among this demographic with people switching jobs for a pay rise anywhere between RMB 200-300. This is really workplace suicide, as without a long-term goal to strive for and putting in the extra effort, these people would still be in the same place many years from now.

With the gap between the larger cities and smaller cities growing ever smaller, one will wonder for how long more this source of labor will continue to power the chinese economy. For the foreseeable future at least, there will be more not less “invisible poor” people.

Allez les Bleus!

France has won the world cup again!

France World Cup Celebrations

20 years after my first FIFA game (France ’98) was given to me by my cousin, France has lifted the coveted trophy again. What nostalgia and a reminder that time really waits for no man. I remember back then, when you only played it P2P, as the computer’s AI were so lousy. Today, even medium difficulty would cause me slight panic.

What a time check this has been for me. I recall that many things which would have mattered 20 years ago do not seem to bother me now. Instead, new problems and anxieties have come in to fill the void.

The reality is that we do change and thus must seek to improve or be replaced by improvements. Our knowledge and abilities should neither be constrained by our employers nor our investment vehicles, but rather by our ingenuity and creativity.

On kinder note, my girlfriend has requested that we go and watch a live world cup match someday. I think that is such a good idea and I do hope that we get to do so someday. My friend went for the match in Yekaterinburg, I am sure it was a wonderful experience for him.

Trip to Jiangxi, China

I just got back from China where I spent the last 5 days travelling along its 2nd and 3rd tier cities. I must say the level of economic progress that has been made since the last time I was here is absolutely astounding. The number of high speed rail lines has definitely made travelling during the festive CNY period a much more pleasant experience.

It also reminds me of the time when Singapore first became independent and mass industrialization was made to bring the country out of poverty and into the first world. The problems then were pragmatic ones, very much like in China today.

However, like any other society most Chinese people find investing in the stock market much more like a speculative venture than a real proxy for income generation. While I am no expert on A-shares, I think there is still much progress to be made in this aspect.

Back when Singapore became independent, the government of the day saw fit to divide the holdings of its then to be privatized national telecom to its citizens, through Special Discounted Shares. For me this is one of the most tangible ways to allow the average citizen to participate in the progress of society.

Personally, I believe that financial capitalism deserves a special mention in our progress as a country. No longer can we say that wealth is concentrated in the hands of a few tycoons. Open markets form yet another avenue for enterprising people to preserve and grow their wealth, while still being economically productive. The fact that every person has the right to participate in the economic progress that they see around them strengthens the case for the middle class and lessens their need on government handouts in old age.

Sure there is avenue for abuse and investors still have to be wary where to place their hard earned money. But there definitely are many other countries where the economic systems are not as robust, and the difference between poverty and the middle class is merely holding onto a job.

While many young Singaporeans can complain that their lot is tougher than their forefathers, I choose to say that this avenue is something that they did not have back then. Already, there are a few people who have successfully chosen to go down this route and I believe that this nascent population will only continue to grow.