October 1 is China’s National Day and is celebrated during a weeklong paid holiday. Probably because of the beautiful fall season, the Chinese call this holiday “Golden Week.” The weather in early October is normally very nice making Golden Week a time of major tourism in China. This holiday has become especially valuable to the families of Chinese workers and farmers because most do not receive any annual vacation. Thus Golden Week has become a great time for family vacations, and millions of Chinese travel within China and abroad. Of course, this means it is also a time for video reports of huge traffic jams all over China. Literately millions of cars and buses are flooding the highways, the main streets of all the major cities and all the famous tourism destinations. If you plan to tour the Forbidden City, the Great Wall or Beijing’s well-known museums, beware of traffic and immense crowds.

Why, in 1999, did Beijing change what was traditionally a one-day National Day into a Golden Week holiday? Answer: the market economy. Instead of encouraging the Chinese people to continue to amass savings, as is so traditional, Beijing finally realized that spending money is more important to economic growth – i.e. keep the Chinese banks and financial system under a reasonable and controllable level of pressure and keep factory inventories low. Golden Week gives Chinese families time to spend money –travel, shop, dine, entertain, etc. This weeklong holiday actually helps to improve the overall Chinese economy and improve the productivity of Chinese companies.

[The author’s business partner] Shiqiang just returned home from Beijing on September 26. Once again he witnessed Beijing’s huge problem with traffic jams. One cause of this problem is, of course, the fact that more and more Chinese families are buying cars. But another key reason is that Beijing has the world’s largest central government system, plus the Beijing City government. These are huge bureaucracies. Government officials and their families are a big part of Beijing’s population. Further, each province and each major city has a big office in Beijing for intelligence, “guanxi” development and lobbying the central government for support for local projects. For example, Shiqiang’s hometown of Tianjin has two permanent offices in Beijing to deal with the Chinese government system. And then there are also all kinds of national and international organizations and systems located in Beijing, as well as China’s largest exhibition and convention centers. And many top Chinese universities are there as well, including Beijing University, Qinghua University, Beijing Aerospace University, Beijing Normal University, People’s University, Beijing University of Medicine and so on. Most of the top Chinese hospitals are in Beijing: Beijing Union Hospital, Capital Hospital and Army Hospital No. 301. Beijing Airport’s Terminal 3 is the largest single terminal in Asia and is still not big enough. China’s largest sports stadiums are also there attracting big events and large numbers of visitors (the “Birds Nest” and the “Water Cubic” from the Olympics). China’s largest railway stations, theaters and museums are all located in Beijing. So, on one hand Beijing represents the world’s largest centralized state, and on the other terrible traffic jams and air pollution. Without a major change in China’s centralized state power system, Beijing’s traffic jams will be there forever. Most of China’s provincial capital cities – like Shenyang, Xi’an, Nanjing, Guangzhou and Wuhan – suffer from similar problems.

The preceding is an abridged version of a commentary for Sino Consulting and has been reposted here with permission of the author.