Eye on China: Cheap and cheerful road to prosperity

Living in a country that is not your own has some strange moments. That's expected. What's stranger is when you go home and find that home has become rather hard to understand.

What's hardest to come to terms with is how your standard of living seems to collapse on return. After all, what's the point of living in the United Kingdom, second only to Germany in terms of GDP size and per-capita wealth, if everything seems as shoddy as in China but at many times the price?

A classic example concerns transport. In Beijing, I zoom around on a 150cc scooter. It costs US$2 to fill my tank, which holds about five litres. That lasts me around one week. Note the pleasing absence of a Chinese fuel tax. Taxes comprise half the cost of fuel in the UK.

Now take the scooter itself. I noticed that after the July bombings in Britain, scooters were being heavily advertised as an alternative to public transport. Ignoring the impracticability of riding a scooter in a country where it rains most of the time, let's take a look at the price. Most of the new scooters were in the US$4000 range. My new scooter cost me US$500.

I've no doubt the Japanese and Italian scooters sold in the UK are much better than my scooter, but are they really eight times better? I bought my scooter in Beijing, but it's a Shanghainese brand, Meitian.

The price for inner-city plates (allowing you to drive in the city centre) comes to US$1500. That's high, but when you sell your scooter, you can sell the licence plate with it and recoup your loss.

Although Beijing is more welcoming than London to scooters, both cities are hostile to small cars. This might seem illogical, given the environmental and cost benefits of small cars, until you remember that many more people can afford small cars than large cars. So permitting small cars on the main arteries would cause even worse congestion than at present.

My experience of the scooter is that the engine is powerful and generally reliable. However, every single instrument on the instrument panel died about one month after I bought it, including the speedometer and the fuel gauge - definitely an inconvenience. In addition, the wiring is a bit off, with the ignition playing up several times and the lights conking out.

Apart from poor-quality components, how else does the manufacturer cut costs on my bike? For a start, research and development costs were low, because the bike is the spitting image of the type the Japanese and Taiwanese have been churning out for years. In addition, there is little metal, the cost of which has soared over the past few years.

Although the bike looks imposing, with a swept-back Vespa look to it and space for two people, the body is almost completely made of plastic. Engine parts and pipes are made of low-grade metal and start to rust immediately after a scratch.

It's clear that should I ever be involved in a crash, the bike will basically disintegrate.

Yet whatever goes wrong with the bike (as opposed to myself) can be repaired within a couple of hours at the most. What continuously amazes me is that the labour, for bike maintenance and most other kinds of maintenance, such as building maintenance, is basically free.

There is no "parts and labour" distinction. You are charged solely for the parts and the shop makes its profits on the difference between the factory and retail cost of the parts.

What about the manufacturer? The company is based on the eastern outskirts of Shanghai and produces a range of cheap motorised transport, including battery-driven bikes, three-wheelers and four-wheel scramblers. The group started operations in 2002 and already exports to Southeast Asia, Europe, the US and Africa.

Meitian has reached a reasonable size, selling all over China as well as internationally, so it's probably able to access bank financing at reasonable rates, although the lack of capital markets financing gives the company's state-owned competitors, who dominate the sharemarket, an important edge.

This weekend is the start of China's National Day celebrations, heralding the start of an exodus of cars on the road network. The Chinese, like the Japanese, don't have the liberty of choosing when they go on holiday: The Government stipulates a week at Chinese New Year and a week in autumn for National Day, meaning that 1.3 billion have to go on holiday simultaneously.

Such an arrangement is unnecessarily clumsy and is surely a major contributor to the 120,000 traffic fatalities that occur every year. Come to think of it, that's one statistic which makes driving on Britain's roads rather attractive in comparison.

* The writer remains anonymous to protect his position in China.