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(ILLUSTRATION: GENTLEMAN DRAUGHTSMAN)

How the Fate of a Spanish Cold Cut Explains Global Finance

• April 23, 2013 • 4:00 AM

(ILLUSTRATION: GENTLEMAN DRAUGHTSMAN)

The ham sandwich at the eye of the storm.

Dry-cured ham is one of the lesser known pillars of Spanish identity. Every year the average Spaniard eats 11 pounds of the stuff, and there are 47 million Spaniards. That comes out to more than half a billion pounds each year.

Food historians suggest that Spain’s love affair with jamón dates back to Roman times and was cemented under the Caliphate of Córdoba, when eating pork was a way of declaring one’s Christian-ness. The cured hams also traveled well, which came in handy in the days when Spain ruled the seas; whole pig legs were stacked like firewood on Spanish ships bound for the edge of the world. More recently, traditional Spanish ham has taken on new associations. Sometime around 2010 or so, cafes around Barcelona started cutting prices on their most popular breakfast order—a small ham sandwich and a coffee. At a price of just two euros, they called it the precio crisi: the “crisis special.”

At first, force of habit and the appeal of a bargain kept the cafes full in the mornings. In my neighborhood, a cafe called the Mesón del Toro kept serving the finest acorn-fed pork, its flesh a satisfying deep red, even at precio crisi prices. But unemployment was skyrocketing, and before long the crisis ushered in yet another transformation in Spain’s—or at least my neighborhood’s—relationship with jamón.

What’s remarkable about this is that, until fairly recently, Spain hardly had any Chinese immigrants.

About a year ago the cafes that served the crisis sandwich started closing. First one, then three, then six of the old family-owned breakfast spots in my neighborhood shut down and passed on to new owners.

The ham sandwiches stayed on the menu (no cafe in Barcelona could hope to do business without them). But none of the new proprietors was Spanish. Financing a small business has become nearly impossible for anyone who depends on Spain’s crippled banking system, which is making fewer loans now than at any point in the country’s democratic history. Instead, the cafes all went to Chinese immigrants.

What’s remarkable about this is that, until fairly recently, Spain hardly had any Chinese immigrants. Over the past 15 years or so, their numbers have ballooned from a handful to more than 170,000. Most arrived during the boom years of the aughts, only to then fend for themselves alongside everyone else in the grim crisis-era labor market. But as the downturn continued, the immigrants have turned out to hold one crucial advantage over their hosts: access to informal credit.

The Chinese underground banking system is complex and hard to pin down, but suffice it to say there is a great deal of money sloshing around off the books in the world’s second-largest economy. “Forty-four percent of elites want to move their money out of China,” says E. J. Fagan, a spokesman for Global Financial Integrity, a research and advocacy shop in Washington, D.C., that tracks illicit capital flows. International Chinese lending networks—often operating in places like the British Virgin Islands—accept deposits from people on the mainland who want to evade taxes, hide proceeds from corruption, or just realize higher returns than the paltry interest rates offered by Chinese banks. The networks then lend the money out to Chinese entrepreneurs. According to a Global Financial Integrity estimate, $2.83 trillion leaked out of China illicitly from 2005 to 2011.

When “P,” a Chinese woman living in Barcelona, decided she wanted to buy one of the cafes in my neighborhood, her brother-in-law and a Chinese accountant arranged her loan through an entity located “somewhere in South America.” I spoke to P in her new cafe, where she stood behind the bar. She asked me not to use her name, because she didn’t want the Chinese to look bad—which she thinks they do. “Even I think there are too many Chinese bars now,” she said. And the reservoirs of goodwill toward the immigrants were hardly deep to begin with. “I’ve been here 15 years, and sometimes I feel like I just got here,” P said. “My son, at school they call him Chinito.” The more the crisis pinches, the more the rising visibility of the Chinese triggers resentment.

The envy is ill founded, however, because business is worse than ever. At this point, one in four Spaniards is unemployed; they aren’t stopping in for a ham sandwich on their way to work. None of the half-dozen Chinese-owned cafes in my neighborhood is turning a profit. Eight months into her proprietorship, P is struggling to keep up with her loans. And the economic challenge is tied to a gastronomic one. With bills to pay, the cafes have to cut corners.

The sandwiches are suffering, and everybody knows it. One recent morning, I was the only customer on the terrace of the Mesón del Toro. In the cold March air, I stared down at my crisis sandwich. The bread was no longer the fresh, crispy stuff the previous owners had used. It was a dry, store-bought roll. The jamón was more pink than red, the wan color of a pencil eraser. And the meat was cut in suspiciously perfect rectangles, betraying that it had come off the shelf, not the bone. A week and a half later, the cafe was closed; workmen said it had been sold to a new Chinese family.

When I asked P about the declining quality of the sandwiches, she scoffed at the suggestion that the Chinese owners lacked a feel for traditional Spanish fare. “The food’s easy!” she said. Chinese workers have been staffing Spanish kitchens for years. Rather, it was the crisis itself that was still eating away at their breakfast.

Marc Herman

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