Another rough week-and-a-bit for the Capitalist Roader Fund, but we’re still not taking any action other than biting our fingernails. Anhui Conch (600585.SH), once hoped to be the foundation of the fund, has been acting more like a pair of cement shoes: it’s now down more than 31% since June 3. We still believe in the company’s fundamentals, but we’re starting to wonder if it might be worth dropping it for now and picking it up again later at what would almost certainly be a lower price. We’ll probably just wait it out, but watch this space.

Our other purchase, Industrial and Commercial Bank of China (ICBC) is down a less-grim 6.47%, meaning we’re out 18.3% for the fund overall. On the bright side, we’re still outperforming the Shanghai index which is down a bit less than 22% since June 3.

The volatility of the markets has meant we’ve seen a couple of encouraging days here and there, but the overall picture has not been bright. China Southern Airlines (600029.SH) is the least-poorly-performing of the stocks we’ve been monitoring closely, but it’s still down more than 5% since July 7, when we started watching. Fortunately, a “five-star” safety award, given to the airline for 169 consecutive months of trouble-free flying, suggests the airline’s fleet is faring better than its share price.

Ultimately, we’re not in a buying mood right now, and a bit of liquidity is always nice – especially with the RMB’s biggest one-day gain in four months coming the day before the CSI 300 officially became the world’s worst-performing index this year.

But we’re not going to be selling our holdings either. We don’t expect to witness huge gains in the current environment anyway, and we think both Anhui Conch and ICBC continue to have potential. Besides, exiting the market would make for a boring fund, so we’ll continue to wait it out.

Every year at about this time a story pops up in the press cataloging the excesses which newly rich Chinese (usually focusing on Shanghai) indulge in on Valentine’s Day, the holiday fiendishly dreamed up by a secret ruling clique of restaurateurs, florists, greeting card companies and candy magnates (no points for guessing whether I have plans on Wednesday). Here is this year’s edition, which includes the following tidbits:

• One Shanghai banker is buying his sweetheart a RMB40,000 (US$5,100) Cartier watch. “I think it’s a better gift than some 10,000 or 20,000 yuan meal,” he says. (The watch’s price tag is 12 times the average Chinese farmer’s annual earnings, the article adds helpfully.)
• The Shanghai JW Marriott is offering a Valentine’s Day package, which includes a night in one of its poshest suites, for a measly RMB28,888 (US$3,722).
• A US$1,000 wine-and-dine package, including limousine, a romantic dinner, a personal butler and a private concert.

All of which sounds pretty tame, really, considering the sorts of findings that were published last year, which included, you may recall, young couples buying each other the precious and lasting gift of plastic surgery. The article even admits that the numbers aren’t really that huge: The Marriott offered a package last year for RMB188,000 (US$24,224), and the US$1,000 package seems rather quaint next to the aforementioned banker’s estimates of what a normal dinner would cost. Are we seeing a downturn in the Shanghai conspicuous consumption market?

An interesting story this morning in the Wall Street Journal (subscription required, or read our brief for free): state broadcaster China Central TV (CCTV) will ban all images of pigs in its broadcasts to avoid offending Muslims:

“China is a multi-ethnic country,” the network’s ad department said in a notice sent to ad agencies late Tuesday. “To show respect to Islam, and upon guidance from higher levels of the government, CCTV will keep any ‘pig’ images off the TV screen.”

Sounds odd - at least at first. Isn’t the pig China’s favorite animal to eat, not to mention a traditional symbol of prosperity, luck and fertility? And since when has the government been especially cautious about offending Muslims? The article answers your questions:

Chinese TV’s ban comes in the wake of the killing of 18 Muslims by police in the country’s remote northwest earlier this month. The government accused the men of being terrorists. Muslim activists have called for an independent investigation.

The policy shift offers a window on the inner workings of China’s governmental machinery, known for its surprise edicts and abrupt shifts in regulation. It wasn’t immediately clear whether the ban applies just to ads or to all TV content. And some analysts said the government could still reverse itself, or offer exceptions to the ban.

Advertising-industry executives in China say senior Communist Party leaders recently told CCTV that references to pigs should be avoided to prevent conflicts among ethnic groups. CCTV’s move was then announced to advertisers just as many were finalizing their spots for the holiday, which begins Feb. 18.

What’s next? Calling off the Year of the Dragon to avoid negative imagery associated with the mythical beast by some foreigners? At least advertisers will be able to air their piggy commercials on provincial and local TV networks, the article says. It ends with this classic line from Ma Yunfu, vice chairman of the China Islamic Association:

“We don’t want to see any misunderstanding like the one 12 years ago,” during the last Year of the Pig, says Mr Ma. At that time, Mr Ma says, some newspapers published a tale in which a pig saves the life of Muhammad. “That aroused a lot of anger,” he says.

A new survey of 140 international recruiters released this week by Korn/Ferry International found that China is among the easiest countries to attract expatriate executives to work but is also one of the hardest places for them to succeed, joining Japan and South Korea, the non-Gulf Middle East, Central and Eastern Europe, and South America.

According to the survey, 51% of recruiters said the most common reason for expatriate assignments to fail was a lack of cultural fit (across the survey, not just in China).

On my bad days, I know the feeling. On my really bad days I could add some reasons. But given this is a family show, I will resist the urge and look forward to soon enjoying one of those elusive good days.

Maybe I will find one in Golden Week.

Golden Week hasn’t arrived yet and Chinese tourists are already getting bad press.

According to the Sunday Morning Post, China National Tourism Administration (CNTA) and the Spiritual Civilization Steering Committee (worth mentioning if only for its fantastic name) have listed the worst habits of Chinese tourists in a bid to promote good manners.

The list is populated by all the usual suspects: spitting, littering, smoking in prohibited areas, queue-jumping, talking too loudly, taking off socks, shoes and sometimes shirts in public areas, bargaining with merchants where prices are fixed.

The CNTA observed that last year there were 31 million outbound Chinese travellers and this figure is expected to reach 100 million by 2020. But “the behaviour of some Chinese travellers is not compatible with the nation’s economic strength and its growing international status.”

You can take the man out of China but you can’t take China out of the man, they might as well have said.

Apparently the campaign is due to run until the 2008 Olympics, just like every other initiative, promotion, offer and bout of public recrimination or ego-massaging. (What happens when the Olympics finish? Wondrous bureaucratic armistice turns ugly as people take to the streets in search of regulations to fill the void?)

I don’t know how many projects have been launched in the last few years aimed at making the capital more palatable to hygeine and decorum-conscious tourists.

What I do know is that, while my typical Beijing cab driver now rolls around in a green-and-gold sedan as opposed to a suspension-free Xiali, he still has a tendency to open the car door for a sly spit at every other set of traffic lights.

You can complain about the man in Beijing but you can’t take Beijing out of the man… unless he voluntarily hacks it up from his pollution-scarred lungs.

China’s May holiday this year basically involves a shut-down on business for nine days, plus a couple more for staff to get back into the mood at the end of the process. Ridiculous. A long Chinese New Year holiday is inevitable and justified by tradition immemorial. But the May and October breaks? They should be cut back down to one day each. The original aim was to encourage Chinese consumers to grasp the joys of consuming. They have now got it. No need to labor the point, pardon the pun.