BEIJING (AdAgeChina.com) -- After spending two years confined
almost exclusively to Beijing to work on marketing projects related
to the 2008 Olympic Games, I realized recently I'd lost touch with
the rest of China. The Olympic Games were long finished and aside
from a brief trip to Thailand, I never seemed to make it out of
Beijing.
A visit last month to some of China's second- and third-tier cities
such as Kunming and Dali in Yunnan province and Chongqing in
Sichuan reminded me life doesn't begin and end on China's eastern
seaboard, a common expat belief. The trip wasn't for sightseeing,
but rather trying to learn how these towns and cities were holding
up during the global recession, which has hit Chinese exports
hard.
Rediscovering China's Interior

If there's a more promising city in China than Kunming for future
business opportunities I haven't seen it. Colloquially, Chinese
refer to Kunming as Chuncheng, the City of Eternal Spring. The
climate is temperate, the skies blue, the air clean and the overall
mood relaxed.
The present also seems to be springtime for Kunming in the business
sense, as well, since the city is looking like China's next big
thing. 2012 is the magical year when several major projects are set
to be completed, making Kunming a regional hub with China's fourth
largest international airport and a vastly improved railway and
highway system connecting it with much of Southeast Asia.
My conversations with the expats running cafes and bookstores
indicate that the global economic crisis hasn't hit them in any
significant way. Tourism isn't as robust as last year, but there
hasn't been a steep decline and the future right now looks better
than ever.
One business owner said once the transportation infrastructure is
in place in three years, they are expecting a sharp uptick in the
number of Indian and Thai businesspeople setting up shop in Kunming
as their gateway to the rest of China. These people will need
services, from restaurants that suit their tastes to printing and
marketing and consulting.
Kunming is already a favorite spot for foreign English teachers and
students studying Chinese, and with more foreign entrepreneurs and
non-governmental organizations (NGOs) locating there, it seems like
a perfect place for creative marketing. One thing the Kunming
business community seems to agree on is that their situation is
recession-proof. The government is going ahead with the
infrastructure plans and if anything, investment there should only
increase in the years to come.
Dali is popular for its slow pace
Like Kunming, Dali is one of those places where you wonder whether
you're still in China. No one seems to be in a hurry and the mood
is almost suspiciously calm. On the street old women dressed in the
bright Dai minority costumes accosted us daily, asking, "You want
to buy pot?" Yes, these no-nonsense business ladies are selling
marijuana on the streets.
The expats in Dali are mainly entrepreneurs running restaurants and
bars, and most seem to have been attracted by the city's physical
beauty (it lies between a dramatic mountain range and a huge lake)
and slow pace. They, too, remain relatively untouched by the global
recession since most of the tourists are backpackers and students
(many studying at Chinese universities), and they are still
traveling.
Chris Prozhnowis is a Georgia native in his mid-20s who came to
Dali as an English teacher and enjoyed hanging out in the popular
local coffee house, the Caffeine Club. He liked it so much he
bought it last year from its German owner and says the recession is
hardly noticeable.
"It's true that we're seeing a drop in foreign tourists this year,
but that loss has been almost completely erased by a corresponding
increase in Chinese tourists," Mr. Prozhnowis said. "Many Chinese
people are saving money by turning to domestic travel instead of
going to Europe or the US, and Dali is one of their favorite spots.
Business is not super-strong, but we expect to do okay because in
Dali our costs are low and there will always be tourists."
His advice to entrepreneurs considering opening a business in Dali:
"Don't try to cut any corners or to do things without filling in
the right paperwork. In Dali, things are done legitimately and
transparently. Get your licenses first and be above board with
everything."
Chongqing's building frenzy halted by
recession
Chongqing exists in another universe from Kunming and Dali. Like
Kunming, it was targeted by the government as a key transportation
hub and received huge amounts of investment capital. It's become a
stereotype of the "new China"--sprawling, teeming with energy,
construction everywhere and so many huge new skyscrapers you'd
think it was the model for Ridley Scott's Bladerunner.
Unfortunately, it is this building frenzy that now puts Chongqing
at some risk. As one reporter who has lived there for many years
told me, there are now huge, half-built structures everywhere you
look, but suddenly the tap has been shut off. There's a building
glut, leaving the city with more office and retail space than can
possibly be rented in the foreseeable future.
A couple of years ago, before the economic crisis kicked into full
swing, I would have recommended Chongqing as one of the smartest
places for entrepreneurs and marketers to focus their
attention.
Now, I'm much more cautious. While Kunming seems unaffected by the
crisis. Chongqing may well be devastated by it, at least for a
couple of years. That hasn't dampened its vitality, but people who
live there told me everyone's apprehensive about the immediate
future.
"The Chinese can be very impatient," my reporter friend told me.
"Many here were expecting to make a profit from real estate and
construction and ongoing growth, and now they have to wait. It will
be interesting to see how they cope with that - having their dreams
put on hold all of a sudden. When I see all the empty buildings all
over town, I know a lot of Chinese people will have trouble
adjusting to their new reality."
The somewhat grim outlook didn't seem to manifest itself on the
streets, which were teeming with life and commerce, abandoned
buildings aside.
I look at Chongqing as a test: If they can be resilient enough to
adapt to the new conditions and re-tailor their dreams based on
this "new reality," without giving up their industriousness and
drive, then they'll come out of this okay, and maybe even better
off in the long-term. That goes for the rest of China as well.

