STOCK MARKET WATCH -- Monday, 23 January 2012

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35. Boom time in Beijing

http://www.guardian.co.uk/world/2012/jan/22/china-beijing-iphones-jeremy-paxman

There was a minor riot in Beijing last week. The Apple store was attacked. Its offence? Not being willing to sell sufficient numbers of the iPhone 4S. Buyers had queued all night and things turned ugly when it became clear that many of those in line had not the faintest idea what an iPhone was. They belonged to teams hired by middlemen who knew that every handset bought was resaleable for an additional £100. The teams of tech-unsavvy people were identifiable to each other by homemade armbands, and when the store staff realised what was happening, they suspended sales. That was when the eggs started flying. In London they riot to steal things. In Beijing, they riot because they cannot buy them.

China proclaims itself a secular country. But that is not what it looks like. For a first-time visitor to China, the most astonishing aspect of the country is the worship of wealth. The mayor of London may like to be seen riding around on a bicycle. That is not the style of the mayor of Beijing.

Even China Daily, a sort of hymn-sheet to the Communist party, reads like the FT much of the time. It reported this month that there were more Rolls-Royces bought in China last year than anywhere else on earth, that Audi now sells more of its brand there than in Germany, and that the company confidently expects to exceed its target of 1m sales between 2011 and 2013, "as long as we can grow annually at 8%", as a senior executive blithely asserted. The target was set less than a year and a half ago.

It is all surface froth, of course: there will still be 1,299,000,000 Chinese who do not buy an Audi. But it is the flaunting of wealth that is so shocking, because the entire economy floats on a sea of migrant workers willing to go anywhere for a day's pay. You can hear them hammering on the construction sites and see them clambering across the half-built highway towers from dawn until long after dusk. Victorian Britain was perhaps similar, and the smog of Charles Dickens's London finds its counterpart in the murk that envelopes Beijing on windless days and tears at your throat like sandpaper. Beijing – once, apparently, a charming ancient city – has been torn down and replaced with a traffic-jammed assortment of functional concrete blocks, interspersed with the occasional stunning pieces of modern architecture.