Year of the stir-fried stamp

Philately is just another investment opportunity in free-wheeling China. Teresa Poole reports from Peking

It Was profits, not politics, which drew the Peking crowds at the opening of the recent 15th Communist Party Congress. At 600 outlets across the city, aggressive citizens could be seen jostling angrily with each other as they tried to reach the front of bulging queues.

Could these early-risers be the party faithful desperate for copies of President Jiang Zemin's keynote speech? Not quite. The object of their desire was a first-day issue of new stamps (golden hammer and sickle on crimson background) to commemorate the congress - just one more investment opportunity in free-wheeling China.

It is said that 1996 was the year of the "stir-fried" Chinese stock markets, while the first half of 1997 was the era of the "stir-fried" stamp. It is all a question of where to put one's spare yuan, especially given the Chinese predilection for a bit of a gamble. Investment choices are limited, the volatility in the stock markets frightens off the faint-hearted, property is out of reach of most people's pockets, and the interest rates on offer at the bank are unenticing.

So Chinese punters are increasingly seeing stamps as a useful part of their investment portfolios. Stamps issued by the pre-1949 Communist-liberated areas and during the Cultural Revolution have made people small fortunes. Stamp-collecting has for years been an established Chinese hobby, and ordinary people are suddenly discovering they own a very marketable commodity.

"I've been collecting stamps for more than 30 years, I've got 50,000- 60,000 of them now," said 60-year-old Zhuo Leyou, a power station engineer, as he purchased a few dozen more from a stamp shop on the central Dongdan shopping street.

All this has created a new breed of entrepreneurial stamp dealer along the way. "In the stamp market, to be a yuan millionaire is not a dream," said one 46-year-old trader from Liaoning province, sitting at his stall at the main Peking stamp market. "A year ago I only had 5,000 yuan (pounds 390), but now I have hundreds of thousands of yuan."

There is a stamp to suit all wallets; last month a 1953 army stamp, known as the "Blue Military Stamp", was sold at auction in Shanghai for a record price of 385,000 yuan (pounds 30,000); in total, some 650 stamps sold this time for 5.3m yuan (pounds 410,000). For those not quite in that league, the Party Congress collection of seven stamps plus two first-day covers officially sold for just six yuan, but were on sale on the black market within hours for more than three times that amount. Unemployed state factory workers have found it profitable to queue up for new issues and sell the stamps on to disappointed late-comers. But punters need to be careful; there is also now a booming market in stamp forgeries, with fakes good enough to trick even experienced traders.

The biggest stamp market in China - indeed, it claims in Asia - is in a large covered warehouse building in the north of Peking. Until June this year the market was held in one of the city's parks, but the authorities decided it was time to bring a bit of order to a market which had expanded out of all expectations, and so it moved to the new venue. Outside, street hawkers sell copies of the official China Philately newspaper, which has a cheering message from Wu Bangguo, a vice-prime minister. "Mass philately has become one of the important components of the socialist spiritual construction," he writes.

Inside the vast hall, socialist spiritual construction is not foremost on people's minds. There are dealers manning their booths, freelance traders darting from stall to stall, small-time hobbyists and a few bona fide serious collectors. One frenetic 44-year-old woman entrepreneur was on the lookout for a full boxed set of 100 identical two-yuan stamps issued in 1981 depicting the ladies in the Dream of the Red Chamber, a classic Chinese work. The boxed set, which was sold for 200 yuan in 1981, would now cost you 75,000 yuan.

The trader from Liaoning showed the woman an incomplete set, and explained he had already sold some of the stamps individually. What about if he bought them back and sold her the complete set, he asked? "But I could do that!" she laughed. Then she caught sight of another trader and started to berate him: "I paid you 180,000 yuan for the 100 monkey stamps, but I found someone who would have sold them to me for 168,000 yuan!" she remonstrated. The woman explained she had been trading stamps since 1991, selling to collectors and other dealers.

The Liaoning trader estimated that about three-quarters of the stall- holders were from outside Peking. He had originally been a private stamp collector, turned to stamp trading in the early 1990s, and then switched to playing the stock markets. Investments in shares proved disastrous, losing him 1m yuan. A year ago he had returned to stamp trading. "In March this year, before the return of Hong Kong, both the stock market and the stamp market was very good," he said. "A lot of common people invested money in shares and stamps. It was the biggest speculation since 1949."

Since June this year, stamp prices, like the stock market, have lost some of their shine, and the market has quietened down. Some traders blame the authorities' decision to move the stamp market from the park to its new, less convenient venue. Officials also said that prices were getting too high. The Liaoning trader pointed to a first-day cover of a Bank of China stamp. "In March that was selling for 4,800 yuan; now I'd sell it for 2,500 yuan. Maybe in October, when the weather gets cooler, the market will get better again," he said hopefully.