Conspicuous Consumption in China

(New York Times)  China's Elite Learn to Flaunt It While the New Landless Weep.  By Joseph Kahn.  December 25, 2004.

Chateau Zhang Laffitte is no ordinary imitation. It is the oriental twin of Château Maisons-Laffitte, the French architect François Mansart's 1650 landmark on the Seine. Its symmetrical facade and soaring slate roof were crafted using the historic blueprints, 10,000 photographs and the same white Chantilly stone.

Yet its Chinese proprietor, a Beijing real estate developer named Zhang Yuchen, wanted more. He added a manicured sculpture garden and two wings, copying the palace at Fontainebleau. He even dug a deep, broad moat, though uniformed guards and a spiked fence also defend the castle.

"It cost me $50 million," Mr. Zhang said. "But that's because we made so many improvements compared with the original."

Rising out of the parched winter landscape of suburban Beijing, like a Gallic apparition, the chateau is a quirky extravagance intended to catch the eye of China's new rich. They can rent its rooms and, later, buy homes amid the ponds, equestrian trails and golf course on Mr. Zhang's 1.5-square-mile estate.

It is even more conspicuous to its nearest neighbors, 800 now landless peasants who used to grow wheat on its expansive lawns.

In a generation, China's ascetic, egalitarian society has acquired the trappings and the tensions of America in the age of the robber barons. A rough-and-tumble form of capitalism is eclipsing the remnants of socialism. Those who have made the transition live side by side with those who have not, separated by serrated fences and the Communist Party.

The party's Central Committee conducted a survey of party officials in November in which the widening income gap ranked as the biggest concern, mainly because it stirs social unrest. Farm incomes were raised this year after emergency rural tax cuts. The government has tried to slow land confiscations.

But officials have chosen not to give peasants control over the land they farm, effectively denying them a share in the new market economy.

Meanwhile, the fleet footed and well connected have profited from surging exports, a bubbly urban real estate market and, occasionally, government boosterism. A wide income gap, like that in Britain and the United States at the end of the 19th century, is viewed by some officials as inevitable, even a rite of passage.

China now has tens of thousands of multimillionaires, some of whom do not follow Confucian or Communist codes of austerity. In fact, pressure to stand out may be overtaking an earlier impulse to lie low.

Mr. Zhang, 57, is a Communist Party member and former senior official at Beijing's municipal construction bureau. He made a fortune building private homes before he secured rights to a sprawling parcel of wheat fields. As the first step in his next project, he cloned the palace and named it after himself.

He is wary of the political symbolism. His mirthful confidence gives way to bureaucratic hedging when he is asked to discuss the wealth gap. But he defends his indulgence as an excellent investment.

"Beijing is so crowded with luxury real estate projects that you need to do something special now," he said one afternoon while leading visitors through the marble atrium of the chateau. "Buyers want the right environment so they feel they are fully realizing their identity."

The bold display does attract attention, some of it unwelcome to Mr. Zhang. The residents of Yangge Village, who farmed the land as a collective until Mr. Zhang persuaded local leaders to let him develop the property, have led a tireless campaign for higher compensation.

As part of a complex arrangement to use the land, Mr. Zhang's company gives the village's elderly a $45 monthly stipend. The able-bodied young can apply for jobs maintaining the grounds and waterways of the estate, or crushing grapes from its vineyard. They get $2 a day.

For them, Mr. Zhang's French revival smacks of a retreat to feudalism.

"It was once our land, and now we have to apply to work there," says Li Chang, a local peasant activist. "To look at the place brings tears to my eyes."

The Chinese Academy of Social Sciences estimates that at least 10,000 businessmen in China have net assets that exceed $10 million. Some of them are peasants or migrant workers who saved every penny, devoted endless hours to their jobs and got rich despite overwhelming odds.

Many others are like Mr. Zhang. He grew up in a peasant household in Shandong Province, in northeast China. But his prospects brightened at an early age, courtesy of the Communist Party.

His older brother, then a young worker in a state factory, was transferred to Beijing, bringing along his whole family. Mr. Zhang attended school in the capital.

He got a second break in the late 1960's, during the Cultural Revolution. Others were sent down to farms to work in the fields as part of Mao's effort to inculcate revolutionary enthusiasm among the urban elite. Mr. Zhang joined a construction brigade, quickly becoming a manager. After attending college, he rose to the top ranks of the construction bureau, which oversees major building projects in the capital.

Mr. Zhang "plunged into the sea" of commerce in 1991. He found a wealthy southern partner who needed help breaking into Beijing's real estate market, then just shaking off the shackles of state control. Mr. Zhang was an insider who could navigate the opaque bureaucracy.

Their first project, called Baxian Villas, was not without risk. They found a plot of farmland surrounded by villages near the northern tip of the city. The secondary roads leading there passed through street-side markets that filled up with produce vendors by day. The trip could take 90 minutes.

Yet at the time Beijing had few other California-style single-family houses like the ones Mr. Zhang built. By the late 1990's, Baxian had sold 500 homes, many of them spacious weekend retreats priced in the hundreds of thousands of dollars. They had acquired the land for a tiny fraction of that amount. To use a popular Chinese term, Mr. Zhang was a baofa hu. He had hit the jackpot.

In 1995, he commissioned a Chinese artist to paint him together with his wife, son and daughter. Mr. Zhang told the painter to copy a style he had seen on a tour of Europe. It resembles a court portrait by Velázquez. The Zhang family poses casually in the center of a neo-Classical reception hall, whose walls are hung with other paintings - each one depicting a villa designed by Mr. Zhang. It covers an entire wall in the ballroom of his Baxian home.

His fortunes improved further as the city expanded to meet him. His retreat became a bedroom community with its own highway exit.

So Mr. Zhang set his sights on a much larger slice of land - nearly 1,000 acres - used as a mechanized wheat farm by Yangge Village and its 800 farmers. A river ran through part of the property, which abuts a forest preservation district. By Beijing standards, the setting was bucolic.

Beijing's city government has tried to slow the loss of rural land. But Changping District struck an unusual deal with Mr. Zhang. The area he coveted would be converted from farmland to a conservation zone. He could then lease the land for an annual rent of $300 per acre, provided it mostly remained green space, according to villagers briefed on the arrangement by local officials.

He was later granted an easement for the palace and a second one for a community of 1,000 luxury homes covering 170 acres. For that change in the contract he paid a lump sum of $9.7 million, or about $57,000 per acre, according to villagers. He declined to discuss the figures.

Mr. Zhang is not one of China's richest men. Lists of the wealthy elite compiled by Forbes and Asiamoney do not mention him. Beijing alone has dozens of real estate companies that control more land.

But the property gave Mr. Zhang a vast canvas to achieve something outstanding, he said.

"I wanted to show how Beijing was rushing out to meet the world," he said. "We have the Forbidden City. We have courtyard homes. I wanted something universal."

As he pondered his new project, Mr. Zhang developed wanderlust. He visited Australia, where his son was studying. There he researched the wine-making industry and decided to go to France.

At a conference in Beijing, he met Françoise Onillon, a Paris-based architectural expert, and hired her as an adviser. In the summer of 2000, she planned a two-week trip through Bordeaux, Burgundy and Beaujolais to see historic chateaux. But the day Mr. Zhang arrived he wanted to begin immediately. So she took him first to Château Maisons-Laffitte, just 12 miles outside Paris.

René de Longueil, a wealthy nobleman, built the castle as a royal hunting lodge in the mid-17th century. He hired Mansart, later the architect of Versailles, who designed the central building with pyramidal symmetry that became a benchmark of French classical architecture.

"He spent five minutes staring at it in silence," Ms. Onillon recalled of Mr. Zhang's visit. "Then he said, 'I've seen enough. This is it.' "

Mr. Zhang used the chateau's blueprints and took some 10,000 photos. For the facade, they even found blond Chantilly stone of the type used in the original.

Ultimately, Mr. Zhang decided he wanted something grander. So he returned several times to France. He designed a garden to resemble the one in Versailles, with its statues of Greek mythological figures. Two wings he built to house hotel guests were copies of the royal apartments at Fontainebleau. After a visit to Rome, he added a semicircular colonnade to enclose the courtyard.

Mr. Zhang says he reveled in the details. He furnished his security guards with French-style uniforms complete with capes and kepis. He chose Bacchus as the chateau's artistic theme, making bacchanal the subject of the giant fountain in the garden, frescoes on the facade and the painting covering the dome inside the atrium.

Commercially, it appears to be a hit. Since its formal opening in October, a major fashion show was staged in its gilded ballroom. The Special Olympics held a black-tie fund-raiser there. Even China Central Television, the state's leading propaganda arm, recorded a New Year's Eve special inside the chateau.

When important people visit, Mr. Zhang is driven to the chateau from his office at nearby Baxian Villas in a 12-cylinder Mercedes limousine. He wears his hair in a slick pompadour and smiles in a detached way, affecting the formal cordiality of official protocol.

The big test comes next summer, when Mr. Zhang begins advance sales on his 1,000 upscale homes. The suburbs of northern Beijing are now crowded with high-end developments, some offering American-style single-family houses for $1 million or more. Mr. Zhang says he is confident that his will fetch the highest prices. "No one can match our environment," he said.

Aside from Mr. Zhang himself, perhaps no one knows the surroundings as well as Li Chang. A lifelong resident of Yangge Village, he farmed the land under Chateau Zhang Laffitte for most of his 77 years.

When Mr. Zhang took over the property, an iron fence was erected around the perimeter, barring access to all but authorized workers and guests. Mr. Li is too old be to hired as a worker, but not to pose as one. He sneaks onto the property to chart its dimensions.

He has filled every page in a soft-cloth notebook with tiny black characters and sketches. The chateau sits on 156,895 square feet, triple the size permitted in Mr. Zhang's contract, Mr. Li says. No moat was ever authorized, he claims, but Mr. Zhang's waterway stretches for just over a mile. To level the land and dig the moat, Mr. Zhang removed nearly 24 million cubic feet of dirt, Mr. Li calculated. He called this a enormous loss of fertile soil.

Mr. Li and other villagers argue that Mr. Zhang has reduced the property's usefulness as farmland, violating the agreement that specified it was to be maintained for agriculture and conservation.

"This is a big violation of state land policy," Mr. Li says, growing animated despite the frigid temperatures in his unheated village home. "And it is happening right here in Beijing."

Mr. Zhang disputes Mr. Li's claims and says he has abided by his contract. Mr. Li has no evidence beyond his amateur surveys.

Mr. Li and other villagers appealed to officials in the village, the town, the district, the city and even the national land bureau, so far without eliciting a reply, much less an investigation. They are focused on technical violations they see as likely to draw official scrutiny. But their concerns are broader.

"They took away our land," says Li Youqing, a 68-year-old housewife in Yangge, who is not related to Mr. Li. "That was our only guarantee in life."

Farmland cannot be bought or sold in China, only leased. To be converted to commercial use, it must be reclaimed by the government and rezoned. Officials then oversee the development or sale of the property. Though the terms of such transactions vary, peasants rarely have any say - or share any profits - when their land is developed.

Yangge residents said the only compensation they have received is the $45 monthly stipend Mr. Zhang agreed to pay the elderly, as well as his promise to employ local workers to maintain and farm the estate.

The money helps. But residents say they are poorer than before. They used to have their own grain, vegetables and farm animals. Now they have to buy all their food in market stalls that line the street outside the village.

"We have to pay city prices for our food but still live on farm incomes," Ms. Li said.

The bigger frustration is the spectacle of riches across the moat. The $9.7 million villagers say Mr. Zhang paid to build private villas understated the land's market value, they argue. They say there should have been no special deal for him.

They also claim that the money he paid vanished. Local leaders promised that the money would be used to start companies, shares in which would be distributed to all who had farmed the land. But the villagers say that no such companies exist and that no shares were issued.

Village, township and district land officials declined repeated requests to discuss the chateau.

"Maybe the Central Committee knows what happened to the money," Mr. Li said, making a joke referring to a top decision-making body of the Communist Party. "No one tells us anything."

An Official EmbraceEven when he discusses his chateau, Mr. Zhang's manner is reserved. When asked to discuss China's wealth gap - and the complaints of his neighbors - he turns icy. During an interview in a yellow-and-gold reception room on the top floor of the chateau, he declared that such issues were too sensitive to discuss and that any article mentioning him should include no references to social tensions.

He then offered that he, unlike his neighbors, puts full faith in the government.

"My basic thinking is that, as a private company, I must absolutely embrace the government policies of the day," he said. "Today's leaders have exactly the right kind of thinking about how to handle these issues."

He said local peasants who complained were not representative. He said he would create 600 farming jobs on the estate, which would eventually have an organic vegetable garden and an orchard as well as the vineyard.

"This will be a boon for the farmers, who will make more money than if they tilled the land themselves," he said. "The whole project is exactly in line with Beijing's policy - to maintain the land as green space."

To date, the government appears to have offered strong backing. Beyond converting a large swath of farmland into a semiprotected conservation zone with easements for property development, Changping District made the chateau part of its annual plan. That minimized cumbersome red tape.

His ties reach higher still. After the chateau opened, Mr. Zhang was host to Jia Qingling, a member of the standing committee of the ruling Politburo and the fourth most powerful man in China by rank. Two poster-sized color photos of Mr. Jia touring the castle hang in the wine bar.

Some people, Mr. Zhang said, might misunderstand his project. It is not designed as a playground for the rich, but as a museum for the masses.

"It is for all the Beijing people, including the common people who do not have the opportunity to visit Europe themselves," he said. "I wanted everyone to get a taste of the finest world culture."

Not only are most Chinese inclined to hide their wealth, they even insist they do not have money.

The disinclination to show wealth has been ingrained in the Chinese culture since ancient times. People today are becoming even more private about their income. Psychologists believe this attitude derives from China's thousands of years of cultural tradition, evidenced in proverbs like "a prominent bird gets shot" and "a blossoming tree will be eventually destroyed". They summarize the essence of Chinese social experience, and reflect certain characteristics of Chinese society to some degree.

Exerting a profound influence on Chinese culture for thousands of years, Confucius' doctrine of the Golden Mean promotes a humble, calm way of life. Thus formed the Chinese people's unique psychological quality of disliking self-publicity.

Since Qin Shihuang, the first Qin emperor (248 BC to 206 BC), unified China 2000 years ago, China has mostly been a unified country. In this relatively stable society, there was little competition and no basis for comparison. In this environment, ancient people did not need to reveal their wealth at all.

Chinese people's unwillingness to show wealth also has a physiological reason. Scientists found more dehydrogenates in Chinese livers than westerners' through studies of intoxicated people from various countries. This explains why alcohol poisoning occurs much less frequently in Chinese even though the alcohol content of China's "white spirit" far exceeds that of foreign liquors. The existence of dehydrogenation enzymes in the human brain may have to do with the fact that the Chinese are better at controlling their moods than Westerners.

Cultural traditions and life styles can also have an impact on brain structure.The cultural traditions, conventions, living habits and attitudes that Chinese have inherited through generations cause gradual genic and neural changes. The accumulation of such quantitative changes eventually leads to qualitative changes, or gene mutation. When the mutated genes were inherited, the disinclination towards wealth exposure passed on.

Modern scientific studies find that only the brain's left hemisphere is active in speaking foreign languages made up of alphabets. However, since the Chinese language combines sound and shape, both hemispheres are used in speaking Chinese. Therefore, it is true that the disparity between people's personalities in the East and West has a physiological basis.

Just a couple of years ago, the vegetable patches of Anting, a hamlet west of Shanghai, yielded some of the sweetest spinach this side of the Yangtze River. Now, out of farmers' fields, an entire German-style town has sprouted, its brightly hued gingerbread homes modeled on those of Weimar in Germany. The new town, which will soon house some 30,000 distinctly un-German people, was designed by Albert Speer, son of Adolf Hitler's favorite architect. Forty kilometers away in Songjiang, barefoot migrant workers are building another massive satellite city, this time a vision of ye olde England with tidy Tudor cottages, cobbled paths, a giant castle and a garden maze. In Pujiang, another Shanghai suburb, 100,000 citizens will soon occupy an Italian dreamscape complete with languid canals. In all, at least 500,000 people are expected to live in Shanghai's seven new satellite towns, each designed in the style of a different Western nation. Zhou Jin, an executive currently residing in Shanghai, will soon move into a $67,000 apartment in Anting, where a Volkswagen factory reinforces the German motif. "Life in such an exotic atmosphere will be fun," says Zhou.

In the late 19th century, as the Chinese empire waned, foreigners carved up Shanghai, turning the swampy land into valuable concessions controlled by the French, British, Americans and others. China was humiliated, but the foreigners did leave a picturesque legacy of leafy streets and stuccoed houses that sets Shanghai apart from other Chinese cities. Today, in order to accommodate Shanghai's swelling population and enhance its image as an international gateway, China's largest metropolis is again bringing the West to the East—this time on its own terms. Shanghai's seven satellite cities will draw so much inspiration from Britain, Italy, Germany, Spain, Sweden, Holland and Canada that one urban planning official announced in a 2002 press circular that "foreign visitors will not be able to tell where Europe ends and China begins."

But critics are sniping that building Western-themed towns on Shanghai's outskirts is impractical and insensitive in a country that once served as a stomping ground for foreign imperialists. Granted, some of the towns have taken pains to modify their foreign themes with Chinese characteristics. In Pujiang, for instance, Italian architectural firm Gregotti Associati International has adopted everything from feng shui philosophy for window placement to extra bedrooms for the parents who often live with newlywed couples. But a Disneyland syndrome affects other suburbs. At Thames Town, one of the English-style developments that make up Songjiang New Town, an ad campaign advises that anyone fond of steeplechasing, Premier League soccer and the Beatles should consider joining the 8,000 fortunate folks who will ultimately live in this housing complex. Naturally, Thames Town will have a British exhibition hall where planners envision screening a James Bond film festival, and a church where, says one promotional poster, "you can adopt exotic marriage customs in which you exchange vows in front of a pastor."

With a minimum price of $490,000 for a villa in Thames Town—more spacious digs go for $669,000—Songjiang New Town will be out of reach for many of the lower- and middle-class Shanghai residents whose housing woes these satellite towns were originally intended to address. More than 3 million migrant workers have flooded into Shanghai, and as the city center is torn up for office high-rises, 226,000 people were forced to relocate to suburbia in 2003. But a property bubble has prevented many citizens from finding affordable housing near Shanghai. "Of course, the developers of these satellite towns want to build luxury homes that they can make a lot of money on," says Mao Qizhi, deputy director of the Institute of Architectural and Urban Studies at Tsinghua University in Beijing. "So you need decision makers in the Shanghai government to say, 'No, we have to take care of the interests of the majority of the people, who aren't rich.' So far, that hasn't really happened."

Near Italian-themed Pujiang, a group of farmers eyeing the airy granite-and-glass concoction that will serve as the new town hall, exhibition center and restaurant arcade grumbles that there's no way they will be able to afford to live in their own hometown. But inside the building, Yue Xing, president of Shanghai Highpower-Oct Investment Ltd., one of the developers of Pujiang New Town, defends his urban vision: "We are not judging [future residents] by how much money they have but by their commitment to enjoying a better quality of life. We have to think about how to make Shanghai a green, livable place." Yue notes that his plan integrates commercial and housing areas to avoid creating residential ghettos—a common criticism of satellite towns—and that high-tech parks nearby will send a stream of scientists and engineers to live in Pujiang, thereby spawning a self-sustaining environment independent of Shanghai. The development also offers multi-income housing, in which the cheapest apartment will cost only $84,000—not bad, though hardly affordable for most people in a city where the average annual income is about $2,700.

Other planned communities, like the Spanish and Canadian ones, are stranded in the countryside with little industry to support them as organic communities. The world is littered with failed cities, where urban planners overlooked residents' needs and incomes. In the Brazilian capital of Brasilia, for instance, the sprawling urban center was designed for easy car transport but now teems with slum dwellers too poor to afford even bicycles. As Shanghai tries to address the needs of its own multiplying population, some are worried that the same mistakes could be replicated in the city's planned satellite towns. "Each of these [foreign-themed] towns wants to follow the model of quick development," says Zheng Shilong, a professor at Shanghai's Tongji University, who helped advise the municipal government on the formation of these new suburbs. "But just building an expensive residential development won't make an entire community come together." What's more, because Shanghai is a trendsetter for China, other mainland cities might blindly follow, littering the Chinese interior with gargantuan Paris Towns. "If other cities copy Shanghai on this, we could have a disaster on our hands," says Tsinghua University's Mao. "This is not the path that China's urbanization should be taking."

Even in Shanghai, most urban planners were against the foreign-themed project when it surfaced five years ago. "None of us supported the idea," says one municipal advisory-committee member. "But we weren't called in to criticize. We were called in to make the proposal work." The idea, after all, was a pet project of Huang Ju, Shanghai's former Communist Party secretary. But since dreaming up his satellite scheme back in 2000, Huang has moved on to Beijing, where he is now a member of China's Cabinet.

Today, in Shanghai, few in government seem eager to acknowledge this massive suburban undertaking. Over the past two months, three municipal departments declined to comment on the project, a curious silence in a city that is usually keen to burnish its international reputation with its latest, hippest urban scheme. Local papers, which tend to give property developments breathless coverage, have also been remarkably muted in recent months. Ironically, the developers of those foreign-styled suburbs that are already finished report high sales rates for what are, after all, some of Shanghai's most comfortable neighborhoods, even if some of them feel as charmless and inauthentic as an oversize miniature-golf course. But as the upper echelons move into their plush digs, the rest of the city is left to wonder why there aren't enough satellite towns suited for them. In the end, Shanghai's concession to an international future may prove as politically unpopular as its foreign concessions of the past.