Shanghai - City of the super-rich

By Carole Cadwalladr

The last time the Chinese police really captured the world's attention was in 1989 when they appeared on the TV hitting Chinese students over the head with big sticks.

They still have the sticks and the ability to look impassive in the face of a large and determined crowd. But outside the Shanghai Oriental Arts Centre, they just look a bit confused. There are people waving thick white invitations at them and bunches of flowers.

Read any human-rights report on China and sooner or later you'll see the word "policeman" coupled with words such as "torture" and "brutality".

Yet here they are, a 200-strong company, stationed out the front of the China Fashion Awards to ensure that no celebrity should suffer the indignity of walking more than a few metres from their chauffeur-driven limo to the red carpet, and that the footballers' hairdos don't get drizzled on.

Worse, it turns out that the event's sponsors include the magazine OK!

It's not hard to see why OK! wants a piece of the action, for the cream of Shanghai society is here as well as crowds of eager but incredibly well-behaved fans - and celebrities galore. Inside, a presenter from Taiwan with impressively bouffant hair is compering.

Claire, who like many English-speaking Chinese has taken an English name, translates. The 24-year-old from a local English-language magazine translates with an increasingly surreal commentary.

"She was Chinese Vogue's first cover star," she whispers when one of the gazelles walks on stage. "We think she is very ugly.

"The presenter is very famous because he changes his hairstyle often.

"That singer in the band - he is deaf. And dumb."

In fact, the show doesn't require all that much translation. The evening consists largely of a succession of glossy, shiny people coming up on stage, each glossier and shinier than the last, right up until the moment a middle-aged man in a drab suit, with bottle-lens glasses and a balding head, sweeps into the spotlight.

"He is the chairman of Shanghai Media," whispers Claire. "The Government."

He's so alien, so totally out of place that I half expect him to start speaking in the synthesised electronic tones of a robot.

He's here to present the Male Fashion Icon of the Year award, and as a man with spiky red hair steps up to accept the prize they form a tableau vivant: old China meets new China.

Can this really be what former President Deng Xiaoping meant almost 30 years ago when he talked about socialism with Chinese characteristics?

It all seems a bit of a stitch-up. Procter & Gamble is among the sponsors, and although there's a whole football team from Prada and another from Hermes taking up the front two rows, Brand of the Year goes to Lux, a cheapo soap bar that P&G just happens to make.

But the evening is as good an introduction as any to the forces at work in modern China.

For a start, there's the spectacle of Western companies desperately ingratiating themselves with a Chinese audience.

The Dutch chairman of Unilever goes on stage and thanks the producers for a show that he declares is "so edgy, so groovy and so swinging". There are whispers among the audience that the awards aren't totally above board. But that's how business is conducted here- by the traditional virtue of guanxi. Or, in other words, through elaborate social relationships rather than on merit.

There's also the stark division between rural China, where 900 million people live in poverty, and urban China. The crowd grows restless when a film is shown of some barefoot children, and only snaps to attention again when some models in short skirts are brought on.

Finally, there are the brands, the labels, the designer dresses - lots of them.

Julien, a Frenchman who works for Prada, sums it up: "It's all money, money, money. Even two years ago it was normal - now it has gone totally crazy.

"We have eight stores already, but we are opening more. Dozens more. You have to see these people when they come in to the shop. Oh my God. They carry bags of cash with them - plastic bags full of cash."

A model-turned-PR asks me to guess the worst social crime you can commit in Shanghai. "Child abuse?"

She shakes her head. "No. It is to give someone a fake," she says, just a little too solemnly. "This is the worst thing. Unforgivable."

The real action takes place at the after-party, a glamorous affair on the 66th floor of the Le Royal Meridien hotel, where the champagne flows.

From every window there is a staggering view - skyscraper upon skyscraper, neon pinks and greens and yellows whichever way you look.

On the river below, huge floating video screens cruise silently by projecting images of speeding Chevrolets and Jaguars.

I'm beginning to see what the chairman of Unilever means.

It is so groovy and so edgy and so swinging. We're 66 floors up a skyscraper in the most successful city of the country with the fastest economic growth in the world.

It feels like being at the epicentre of the future.

P.T. Black, the American partner of a company that does market research for Western firms desperate to crack the secrets of the world's biggest market, tells me about a survey which asked people in 80 countries whether they thought tomorrow would be better than today.

"Only three countries in the world answered positively," he says, "and by far and away the most positive was China - 83 per cent said yes. People really believe in progress here."

But then how could they not, when the view from the windows is of Pudong?

Fifteen years ago it was swampland. Now it's home to four million people and headquarters to dozens of international companies.

But when I start talking to Lu Kun, a couture designer, and ask what he thinks of fashion in Shanghai, he makes a face.

"Not much," he says. "Everybody is just counterfeiting Western designs." But tonight, with a lot of people getting drunk on free champagne, there's the golden whiff of opportunity in one of the greatest boom towns in history.

Only Charlie, it seems, is sober. He's an advertising exec from Beijing, in his mid-thirties, and the only doom-filled person in the room. Maybe the entire city.

"It's insane." he says. "Everything - the money, the poverty, the urbanisation, the exhaustion of our natural resources.

"These opportunities that are beyond anything that anybody in Europe or America has seen before or will ever see again. It's mad, if you think about it. But no one is thinking about it, because it's impossible to hold it all in your head."

It's 4am, and we're at the after-party of the after-party at a private members' club called Volar, designed by Philippe Starck.

Charlie tells me: "My sister is nine years older than me and she is completely different because she grew up during the Cultural Revolution [1966-1976] and I grew up after it. It's like we are totally different breeds.

"She had to go and work in a factory. I cannot even imagine how hard her life has been. And she's my sister.

"There is this overwhelming optimism, but at the heart of us all is this enormous insecurity. Look what happened to our parents. Me? I'm always looking for escape routes."

The next night I'm back on the 66th floor of the Le Royal Meridien for a "private shopping evening" organised by Qeelin, China's first luxury jewellery brand.

The signature piece is a panda pendant, studded with 300 diamonds, on sale for US$11,800 ($22,000).

One of the shoppers is Joe, who is in his late 20s and runs the Ferrari club. "It's for me and my friends," he says. "We turn up and drive around places in our Ferraris."

But there is a degree of equality - they'll let you in if you drive a Porsche.

He already owns nine cars - including a Porsche 911, a Mercedes - and is about to buy a Lamborghini. Then there's his apartment in Shanghai and his house in Eastbourne, in the south of England.

Joe is a member of that other elite club, the first generation of Chinese to have inherited wealth. His father owns several hotels and "around 2000 apartments".

You get blase about meeting the super-rich in Shanghai. It's a city of newly made bao fa hu - the "explosively rich".

Yuan Yuan, 32, an events organiser with a PR company, tells us about her friend Steven. "He makes just this one tiny component for Sharp mobile phones. This one," and she points to the little socket into which the charger plugs. "And he has six factories, and 6000 employees, and each factory makes US$256,000 a month - each factory. And he doesn't know what to spend it on."

The next day we go off to the golf academy, where we meet Michael Dickie, a Scottish golf coach, who tells us about a golf club that costs $180,000 to join. "My one is much cheaper - only $100,000."

We take a taxi to meet one of his students, 35-year-old Wu Xin, or James, and drive through a scrappy little neighbourhood until suddenly we arrive at Rancho Sante Fe. It's a private compound with huge villas made of fake adobe and a whole mini-army of private guards.

James' villa has manicured lawns, a deck overlooking the lake, a barbecue pit, an ornamental well and a perfectly groomed labrador retriever called Wang Wang.

Ten years ago James had nothing. Now not only does he have this house, which he bought for US$6 million, but he has bought apartments for his parents, his wife Vina's parents, his sister and his wife's sister. And he's only in his mid-30s.

He built his own chain of clothing stores from the ground up and now owns an empire that spans China, although these days he concentrates on his investments.

His son attends the British school and goes horse-riding, and as a family they holiday in Europe, South Africa, Australia and Southeast Asia.

They're very friendly and give us a tour of the house. But there's an unsettling moment when they show us a girl's bedroom with a doll's tea-set and flowery bedspread.

"For a daughter," says James.

"But you don't have a daughter," I say. There's an uncomfortable pause as James looks at his wife as if they've been found out. "The designer did it," James says. But then, for all the Wisteria Lane-style decorative features, it's not America. And Californian style only works up to a point in a country with authoritarian social policies of the one-child-only variety.

In the taxi back to central Shanghai I start thinking that although the house was expensive, it really wasn't that different from millions of suburban homes across America.

But then, that's Shanghai. From one angle it all looks quite normal - the bars, the shops, the fashionably dressed young people.

Yet from another angle it's anything but normal.

In the business centre of the Shangri La Hotel, not far from the construction site where the tallest skyscraper in the world is being built, I attempt to do a bit of research on the internet, but the server seems to be down.

There's no Wikipedia. And only then does the penny drop - I'm behind the great firewall of China. I spend half an hour trying to establish what it is exactly the Chinese Government doesn't want me to know.

Then, quite by accident, I slip through an electronic loophole and find an article by someone who wrote something on a chatsite and was taken off to be "re-educated" in a labour camp.

The hairs on the back of my neck prickle. I can't help wondering if there's somebody watching. But then, of course, there probably is.

It's one thing knowing about the one-child policy in theory, quite another seeing it in action.

The present crop of 20-somethings is a demographic freak, a generation consisting predominantly of only children. With everything that implies: it's why China has the highest number of mobile-phone users in the world, why Western brands are salivating at the riches to come, and why, in every glamorous bar in town I seem to meet a young girl who refers to herself as a "Shanghai princess".

Yuan Yuan, the events organiser with the mobile-phone billionaire friend, is not a Shanghai princess. She's in her 30s, defiantly independent and single - but she knows Shanghai princesses and rounds up a bunch of them for us, along with a couple of princes.

They're all such polite young things, articulate, interesting, with good jobs at Western firms. Encouragingly, only one of them, Tim, is dressed head to toe in designer labels.

Finally, I attempt to ask them about politics.

"Ask anything you like," they say. "We are the new generation, we're allowed to talk about it.

"Western people think that we are all heavily controlled by the Government. But we don't really feel like that."

"Does anyone ever criticise the Government?" I ask, pointing out that they can talk to me with the assurance of strict anonymity.

"Of course," says someone I'll call Lily. "They say the Government is hiding stuff. That they don't tell the truth."

"And do you agree with this?"

"Sometimes," she says.

"And what about democracy? Any thoughts on that?"

"We can vote for representatives," George says. "But our problem in China is that we have too many people. It's impossible for us to have true democracy. The country is too big."

They could be reading off a script. They were toddlers at the time of Tiananmen and in their experience, Chinese policemen provide security at red-carpet events.

These are astonishing times, and even among this group of young Burberry-wearers you get a glimpse of how far the country has come and how quickly.

I chat to one of the girls. Her bag is by Chanel. She loves Chanel, she tells me. She loves shopping.

Then she mentions that she was brought up in Xinjiang, in the far northwest. Her parents were forcibly relocated there in the 70s.

"They didn't want to go," she says. "They were taken there and then left in the middle of the countryside. They had to build their own house. We were miles from anywhere - they wanted to keep us apart from the local people. The nearest village was a two-hour cycle ride away and it had nothing, only a little market."

She lets out a little shiver of horror at the memory: "There was no McDonald's, no KFC, no shops. There was no Chanel - I didn't even know about Chanel at the time."

From rural to urban, from poverty to designer clothes, her transformation has taken only a decade. She's gone from grinding rural poverty to a good job with a Western computer firm. With her immaculate hair, manicured nails and fluent English, she is China in miniature - the economic miracle made flesh.

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