Black Market Days

ALMATY, Kazakhstan
April 10, 2008

Last month, my editor in Beijing moved my deadline ahead by one week. So, rather than submitting articles for World Vision by the 15th of each month, I have to get them out by the 8th.

It should soon be a lot easier for me to churn out material focused on travel in China: I'm almost back there now. I've spent the past few days in Almaty. Almaty is the same place I refer to on previous visits here as Alma-Ata. Alma-Ata is the name I always knew it by, but--as with place names including Peking and Bombay--has revised its English version in recent years.

Next month's article follows below:

"Remember when we were in Yangshuo and got those fake student cards?", a friend asked me a couple days ago. I was having a conversation far from China, visiting a good friend in Denmark--a friend who I had initially met many years before, when we were both making solo journeys around China.

Until that recent conversation with her, I had forgotten how different travel in China used to be. My friend's perspective is locked in time: she hasn't been back to the country since that trip when we first met each other, 13 years ago. My perspective is distorted by familiarity: over the past several years I have been living in China: studying languages in Urumqi and making as many trips as I can: within Xinjiang, to other points around China, and to neighboring countries within Asia.

Today, anybody in China could relate a long list of the changes and development they've seen the country go through in recent years past. The foreign travelers who were in China over the last few decades will have unique stories to tell, told from their special perspective. Not long ago, there were different regulations in effect for foreign visitors to the country: different rules to abide by and different laws to observe. Enduring and exploiting the quirks of the system at the time is an experience that foreigners traveling in China today can no longer have. It's an experience that most people in China were unlikely to have any connection to or awareness of. Below are several descriptions of policies or situations that foreigners encountered traveling here in recent years, but are a thing of the past in today's China:


When I first visited China, there were two types of money, two currencies in circulation: RMB and FEC. Everybody in China today will be familiar with RMB renminbi--that's normal money, the money which is still used today. However, how many people living in China today have ever spent or made a transaction using FEC? I'd be surprised if that number was as high as one person in a million.

My first trip to China was a journey up the Karakorum Highway in 1993. That was still in the era of "FEC"--the English initials for "Foreign Exchange Certificate". At that time, all foreign currency had to be converted into FEC, a separate series of money which looked completely different from RMB, the ordinary "people's money". The denominations of the two currencies were the same (e.g. notes of 1 yuan, 5 yuan, 10 yuan, etc.) but FEC was printed with colors, pictures, and text which made it obvious that it was not ordinary money.

FEC was supposed to be valued at a one-to-one rate with RMB. FEC was supposed to be accepted everywhere, from the most expensive hotel in Beijing to the simplest noodle stand in the countryside. Over the time FEC was in circulation, not everybody was aware of its existence. Seeing unfamiliar colors and design on the bills, merchants in smaller locations would occasionally refuse it. However, the people who knew what FEC was sought it out desperately. FEC could buy things which RMB could not.

At that time, there were few imported goods in China. What things did come into the country from outside its borders were sold only in "Friendship Stores". Such Friendship Stores can still be found today in some of China's cities, though back then they were the only place to buy western products. Friendship Stores were state-run places where a foreign visitor could buy Chinese souvenirs alongside familiar items from back home: perhaps an English-language magazine, a portable cassette player, or an imported chocolate bar. Payment for all items bought at Friendship Stores had to be made in FEC.

However, outside of hotels and the Friendship Stores, payment for anything could be made in RMB. There was neither any requirement to nor any advantage in paying for items bought outside the Friendship Store--such as a meal at a restaurant--in FEC. As imported items not available to ordinary Chinese people at the time could be purchased at the Friendship Store by anybody who had the right currency, a black market in FEC developed. The official exchange rate may have been 1-to-1, but people on the street would offer varying rates well above that. I think the best rate I ever got was 1.7 RMB to 1 FEC with a friendly young Uighur money trader who operated beneath the Mao statue in Kashgar.

Mid-way through that first trip I made to China, the decision that FEC was to be phased out was announced: this killed the black market demand immediately. From that day on, that same money trader wouldn't give a better rate than 1.1 RMB to 1 FEC.


Even today, I occasionally encounter an official price set for foreigners, a price which is several times higher than the price locals are expected to pay. While this system of separate tariffs for locals and foreigners has not yet disappeared completely, this policy was far more prevalent in the past. So many things: bus tickets, rail tickets, admission to parks, museums, and all manner of attractions had a low Chinese price and a high foreign price.

Whatever rationale might have been behind the dual-pricing, it's good that the practice is less common now: most foreigners felt insulted to be paying several times as much as everybody else. I recall the foreigner price for railway tickets as being roughly three-times what the locals were paying. The most extreme price gouge I recall was on a visit to the Temple of Heaven Park in Beijing in 1995. At that time, locals had to pay 5 mao for an entry ticket, foreigners had to pay 30 yuan: a 60-fold difference.

Foreigners visiting China employed all sorts of schemes to get around the higher prices. With bus and railway tickets, the simplest approach was to ask somebody at a the terminal to buy a ticket on your behalf. Even when paying the more expensive fare, a foreigner would receive the exact same ticket that a local would: a cardboard stub printed with the train number, origin, destination, and the local, lower price--a price for which the foreigner would pay three-times as much if they made the purchase themselves.

A better way to get local prices was to get a phony student card. In theory, foreign students studying in China were entitled to pay the local rate not just for rail tickets, but wherever a dual-pricing scheme was in effect. All they had to do was to present the student card issued by their university when buying their ticket or paying their admission fee.

As with the system of FEC, the dual-pricing scheme led to another thriving black market. It wasn't that hard to find somebody who could make a fake student card bearing the foreigner's photograph and personal data under the name of some Chinese university. These went for 25 yuan on the streets of Yangshuo in the mid-1990s. I remember a man selling these to a group of western backpackers, asking them what they were studying. "Okay, let's say that you're here to study Chinese cooking. And you, Miss--you're studying Chinese medicine. This guy over here... he'll be studying martial arts."

These counterfeit student cards looked pretty shoddy to me. I didn't imagine that anybody would believe they were real, that is, until I saw what genuine student cards looked like. Even today in China, many places issue a plastic red booklet with a folded piece of paper inside. The student's photograph is glued atop one page on the right side, beneath the picture all personal details are written out by hand. I was surprised to find that the bona fide student card issued to me by Xinjiang University when I first enrolled didn't look all that different.

Some foreigners employed common-sense--and perfectly legal--techniques to dodge high entry fees. I set out once with another foreign traveler to camp and hike along the Great Wall for several nights. We took a bus filled with other tourists to Simitai, one of the sections of the wall that had been restored near Beijing. Upon reaching a parking lot with souvenir stalls and a ticket office, the two of us broke away from the rest of the group, turned, and walked south, following the Wall for a few kilometers. We decided that there was no point in walking up to the Wall through one of the few stretches where it was necessary to buy an entry ticket. There is no restriction in going up to, climbing on, or appreciating the Wall from any other point. Only in the areas heavily reconstructed for tourism, such as Simitai and Badaling are entry fees levied. Given that the Great Wall runs for thousands of kilometers, we decided that we would just approach it along a road where nobody sold tickets.

I might have considered entering at the area where where we got off the bus at Simitai, if I hadn't first seen the prices to walk in there. A sign posted at that time stated that tickets sold at the Simitai entry gate cost foreigners about twenty-times what they cost locals.

Hotel Restrictions

It was only last year that I heard a formal announcement from Beijing that foreigners would now be allowed to stay at any hotel in China. Until that time, it was established law that only certain hotels could accept foreign guests.

This restriction on hotels wasn't a huge problem, but it was far from the ideal situation from the traveler's perspective. Having fewer options to choose from often meant having to pay higher rates for lesser quality. In recent years, more and more hotels have been willing to accept foreigners; in previous decades there might have been only one or two hotels in a city where a foreigner could legally stay.

I presume that the laws requiring foreigners to stay only at certain hotels changed to reflect the fact that--gradually--many hotels stopped enforcing them. I remember when I first saw indications that the situation was changing. Back in 1995, I took a boat along the Yangtze River, through the well-known "Three Gorges" stretch. The first stop beyond the gorges was a small city, Yicheng. Many touts met the boat, showing photos of the beds in their hotels next to lists of room rates.

I assumed that these small guesthouses were licensed to accept foreigners as they were so eagerly receiving people like me who clearly were not local Chinese. When arriving at the guesthouse, though, the manager was interested only in payment and not at all interested in taking down my passport details. He did seem concerned that I should be registered as a guest but checked me in under a ridiculous pseudonym. Rather than inventing some fictitious Chinese name, he instead wrote my name down as "ABC". To this day, I wonder what he was thinking by doing that. What possible advantage could there be in registering me as "ABC" rather than my real name, if there was a records-check from the authorities?

Scarce English

So many people are focused on learning English today across China. Given this present state of affairs, I find it hard to reconcile my memories of travel here short years ago. Until relatively recently, it was rare to encounter English speakers most places throughout the country. Perhaps my perspective on how much English is around China today is not accurate: my life has revolved around a Chinese university setting over the past several years. However, these days in China I've been meeting more and more people who don't fit the student profile--yet have passable English ability.

To put it in perspective, let me relate the account of another friend I was chatting with in recent days, a friend who made a trip to China not that long ago. This was her description of how difficult it was for her to get a meal without speaking Chinese. She visited Guangzhou in 1997:

"We had just a day there, coming up from Hong Kong. We found a restaurant that looked good, went inside and sat down. Everybody was very nice and helpful, but the menus were entirely in Chinese. We couldn't understand anything. Finally, after quite awhile, they found a man who could speak some English. However, it turned out that this guy could speak a little but didn't seem able to read or write anything in English. So, we weren't able to get the menu translated. In the end, we just let them cook whatever they wanted. We were served way too much food and the cost was quite cheap for the entire group of us to eat, so we went away happy."

I can scarcely imagine that situation happening in the Guangzhou of today, or even in a far smaller Chinese city. It sounds like another country, entirely. Where in China today would it take such a long time to find some person nearby who could speak English, let alone one who would have such a limited ability to communicate? Even off campus, away from all the English students, I often find there are employees everywhere around Urumqi: in shops, restaurants, cafes--who make some effort in English.

While most of what I've described is long in the past, travel for foreigners in China still has different regulations from travel for local Chinese. For example, many small and remote areas require an "Alien Travel Permit" to visit. These include places such as Chapchal in Xinjiang and the entire region of Tibet. Despite that all hotels are now allowed to accept all guests, I've recently had hotel managers refuse to accommodate me on the grounds that, "Foreigners can't stay here".

I'm happy to see that the rules and regulations are generally heading towards equal treatment for everybody traveling within China. Nobody likes to pay more than others. Nobody wants to endure additional bureaucracy in their life. But, that said, I do reminisce, reflecting back on that different time with a certain fondness. I related to my Danish friend how so many of the impressions she retained of China are memories of a country that is long gone. She said that she would be excited to make another trip back someday to see how the country has transformed. However, we shared a sadness that certain quirks of the country--two currencies, black-market money exchange, and fake student cards--have become things of the past.