Cal Poly Magazine Quote

The Cal Poly Magazine produced an article about our trip last year... I wound up being quoted in it.
http://calpolynews.calpoly.edu/magazine/winter-06/China.html
This year's trip is underway now. Read about it at http://www.calpolymbatrip.com

Semi-Final Reflections...

I’m not yet able to fully express my feelings about China and the experience we had there… I find myself thinking about the country everyday as I come into contact with thousands of items that were made there, or look at the prices paid in the US and compare them with the production or sales cost in China, or drive by Panda Express :)... I am also still trying to get my head around the astounding extremes that I bore witness to daily; in regard to economics, opportunity, wealth, sanitation, human rights, and environment, the range was truly phenomenal. One thing I am sure of is that my perceptions and perspective have been changed because of this trip and I expect that the trend will continue in the months to come. Following the path of our journey, here’s some of what I encountered and what affect it had on me:

Shenzhen:

The first city we traveled through was Shenzhen. Primarily an industrial base, the city experienced massive growth towards the end of the 20th century, when it became China’s first Special Economic Zone. The success of Shenzhen has led to a number of SEZs being created throughout the country and they have helped draw in further investment to fuel the rapidly expanding Chinese economy.

Our business stops on the first day of the trip included two factories which produced electronic components/products. The workers, who are almost exclusively from inland China, live and work at the factory location. The apartments we viewed would easily be considered sub-standard by U.S. measures as would the sanitation of the bathroom/shower facilities, and the density of the housing. While the food wasn’t particularly good, the meals we were served we at least well balanced and somewhat nutritious. The working conditions were also unacceptable by western standards and safety did not seem to be anywhere on the list of priorities. Though I’m not pleased with what I saw at these locations, I am certainly glad to have seen it. I hope that these conditions change as time progresses and China modernizes, but what would happen to Sony if the shareholders found out that production prices were going to increase 5-fold… I have a feeling that HD-TV sales would drop off pretty sharply when the prices started running up over $10,000. The bottom line is that as much as the first-world hates the living conditions in the third-world, the vast majority are not willing to incur the cost of having them ended. I suppose you could argue that that is the ugly side of capitalism, but since communism didn’t prevent the conditions from arriving in the first place the blame should perhaps be laid on humanity.

In exploring the city of Shenzhen I had a fantastic time. The energy of a big city was palpable as we explored some of the downtown district. Though I doubt I would have planned a trip there on my own, I would certainly spend another day there if the opportunity arose. The opportunities for businesses in Shenzhen are certainly present and growing as well. The population is increasing; the infrastructure is high quality and growing; and even small increases in wages could pour immense amounts of money into its economy. Though the Chinese save at record rates, the right product in an increasingly capitalistic economy is certain to meet with success there. The marketplace around the corner from our hotel provided me with the promised throngs of Chinese, and walking shoulder-to-shoulder (maybe shoulder-to-head is more realistic) with so many people was exciting in its own right.

Our stop at the Yantian International Container Terminal at the port of Shenzhen was a fantastic illustration of the modern logistics and infrastructure capabilities of this region. The operation was organized and efficient with capacity for future growth already built in. The fact that they can turn around the largest container ships in ¼ the time it takes in the U.S. is all you need to know to understand that they’re on the right track.

A quick stop at a new housing development marketed towards ex-pats illustrated that developers are expecting continued growth in this market. Posing as management trainees for a large U.S. corporation got us in the door and tours of one of the units, further evidence that the growth is not expected to stop.

Shanghai

Shanghai reminds me of New York. The only thing that could improve that skyline is perhaps transplanting Yankee stadium there. Bring the Jets as well and I’m moving. The hustle and bustle was intense and the financial power of that city was dripping from the neon striped buildings. Of all the cities we visited, Shanghai was my favorite, and I would have no qualms about living and working there for a number of years.

The common theme amongst all of our company visits in Shanghai was the almost unlimited opportunity that they see within PRC. Each U.S. based company was excited to be conducting business in China and planning future expansion as the markets become ever more open.

I was particularly impressed with the Urban Planning Exhibition and our visit to CB Richard Ellis. These visits, in tandem, gave me a wonderful understanding of Shanghai’s size and scope as it has evolved over the past few decades. In addition, I learned the future path that is being taken in the development of the city. The detail to which they have already planned out their expansion and infrastructure improvements is truly incredible and a perfect example of how swiftly China is changing. Growth management for a city of over 23 million seems an overwhelming task, but somehow it is well in hand in Shanghai.

Exploring the city, I was exposed to beautiful gardens, parks, plazas, and architecture. The sidewalks were wide, open space was appropriately placed, and trees lined many of the streets. The combination of these details made the city feel much smaller than it actually was. While walking in the Bund area, I came across a giant plaza where a large band of various drums were being played; it was a completely unexpected taste of Chinese culture that was a high point in the day. The French Concession and Bund were both examples of the European influence that permeated Shanghai during the early years of European/Chinese relations.

Perhaps the most moving and unexpected thing I was exposed to in Shanghai was not the beautiful spaces or modern lifestyle, but the poverty that would sometimes reveal itself across the street or around the corner. While exploring the areas we came across, we often noticed that directly adjacent to modern high rises and skyscrapers were blocks of old shanties with residents living in impoverished or semi-impoverished conditions. Open air markets with little or no refrigeration for raw meats and poultry, a lack of sanitation, and a lot of dirt were common place. It was sad from an outsider’s position, but the people did not look unhappy and the promise of the PRC’s growth makes me feel that over time these people and areas will see greater prosperity.

Wuzhen

We spent a few hours in the village of Wuzhen on our way from Shanghai to Hangzhou. This little village fronts waterways in similar fashion to the buildings of Venice, Italy. The city is over 1000 years old and has been converted into a tourist destination with the support of the Chinese government. Within the village, professions are practiced in the traditional way and are available for the tourists to witness and learn about. Dying, distilling, cobbling, silk production, and more are practiced in the same way they were centuries ago. While the same style of historic village can be found in the USA, making brooms and churning butter, the Chinese village was of much more significance to me. Though these workers performed in this manner for the sake of the tourists Yuan (Chinese currency), there are vast swaths of western China where these methods are still followed as a way of life. Wuzhen serves as a reminder that while the Chinese cities on the eastern coast are flourishing in the new economy, much of the west is still hundreds of years behind and in need of global attention.

Hangzhou

Our stay in Hangzhou was brief but beautiful. Situated on the West Lake, the city felt cool, clean, and relaxing. While here we took a boat ride out on the lake and were able to get a fantastic view of the skyline of this small city (only 5 million people). Following the boat tour was a visit to some classical Chinese gardens which featured traditional architecture, and beautiful scenery with exemplified an attention to detail that I found to be a common thread amongst Chinese art, gardens, architecture, cuisine, and writing.

That afternoon we had lunch at a green tea plantation and we able to tour the grounds. We also received a presentation that taught us the history of green tea and the Chinese tea ceremony. At the conclusion of the presentation, Dr. T (the presenter), explained the differences between the various grades of tea and immediately followed up with an offer to sell varying amounts at substantial discounts. Dr. T may have been the best salesman we came across on our trip and a number of our group members happily obliged his pitch with purchases of high quality green tea for themselves, friends, and family.

Our day in Hangzhou concluded with an overnight boat trip that took us down the oldest and longest canal in the world to the city of Suzhou. The groundbreaking for the Grand Canal took place is 486 B.C. and the extension was completed during the early 600’s A.D. The canal now stands at slightly over 1,100 miles. For comparison, the Suez Canal is 120 miles long and the Panama Canal runs 50 miles. The immensity of such a project, completed almost 1500 years ago, leaves me in awe of the Chinese people. No cranes, no bulldozers, no jackhammers… just an incredible idea and the passion to see it happen.

Suzhou

Our time in Suzhou passed quickly. We were only there a day, but got a little taste of what this city is like. Our day started off with a visit to some of the most beautiful Chinese gardens we would see. Though the heat was oppressive outside, the abundance of trees casting their shade across myriad ponds and rock sculptures within the garden provided a feeling of coolness that made the stroll enjoyable. These gardens typified the gardens that would be built by public officials after retiring from public life.

Later in the afternoon we visited “old town” Suzhou which was also built along the waterways. There were a variety of shops and restaurants fronting the water in similar fashion to Wuzhen, just modernized by hundreds of years. The group I was with traversed the waterfront and took an alternative path back through another alleyway of “real China” where we came across citizens mixing concrete for street repair, poultry pens strapped to the back of bikes, and a public toilet that consisted of a pit in the ground with two slabs of concrete straddling the target area. It was another reminder of how close the rich and poor sometimes live within Chinese cities. By this point in the trip, I found myself feeling less surprised by these areas and more curious to look for the details of how these folks live their lives. And as in most areas, meeting a blank stare with a smile and a nod would always get a response in turn.

The second day in Suzhou entailed a trip to the Suzhou Industrial Park. Another of China’s SEZ’s, it blew all of my expectations out of the water. What I expected to be a campus of industrial buildings turned out to be miles upon miles of residential, commercial, industrial, and public spaces subject to very special economic policies geared towards attracting global business to Suzhou. The incentives go well beyond reduced tariffs or taxes and include a Social Security system that operates independent of the rest of China. The industrial park felt more like a separate country than an industrial haven. The whole region was master-planned to provide the greatest level of service to the businesses located within it, and everything we could see seemed modern, advanced, and appropriate. It was another business gem uncovered on this trip to China that caught me totally off guard and showed me just how serious China is as a resource and competitor for the US.

We wrapped up the day by heading back to Shanghai to visit a Carre-Four store (similar to Super Wal-Mart) before embarking on an overnight train ride to Beijing. The store was immense and contained everything from sporting goods to housewares in addition to being a full grocery store. The train was comfortable and climate controlled, and everyone enjoyed relaxing and chatting for a few hours before heading to bed.

Beijing

Arrival in Beijing marked the final leg of our trip. In contrast to Shanghai, which reminded me of New York, Beijing seemed more reminiscent of Los Angeles… rather than a clearly defined city center with decreasing density as you moved outwards, Beijing seemed to sprawl across the landscape for miles upon miles. As I walked through the city, I never felt the energy that had been present in Shanghai and, to a lesser extent, Shenzhen.

The first day began early as we debarked from the train at about 7 and made our way to the hotel. I walked around a little bit with one of my classmates and met another great Chinese salesman while walking through a small park. He explained that he was part of a traveling art exhibit that was headed to the U.S. in a few months. They were actually leaving Beijing that day, so he encouraged us to come with him to look at the work immediately. We knowingly obliged and chatted with him a bit as he led us to the “exhibit.” The clever part of the pitch was that he led us to an actual exhibit that was closed for renovation and upon arriving he explained that the artwork had been relocated across the street. He then led us into the store in which he worked. We weren’t really interested in buying anything so we told him we might come by later and made our way back to the hotel for the day’s company visits.

The first day’s business visits were to the U.S. Commercial Attaché’s office and CB Richard Ellis. The CBRE visit was, as in Shanghai, very enlightening. They had a wonderful grasp on the political and economic climate of Beijing and China, and they provided a lot of insight into how the city is developing. I was most impressed by the amount of infrastructure being built within Beijing. Clearly the city has substantial traffic problems, as we witnessed gridlock on a number of occasions and had to budget time for traffic congestion into our travel plans. To address the issue, the city is greatly expanding their subway coverage throughout the city. The scope of the expansion, which includes miles upon miles of new tunnels and a number of completely new lines, is immense and makes the “Big Dig” in Boston seem like a commonplace project. I can’t imagine a city in the U.S. making a commitment to so much expansion at one time, and I don’t believe there is a city in the U.S. that could get the project done on such a short timeline.

That night, the street we were staying on became a street market that even the pouring rain did not interrupt. I wish I had not eaten so much at dinner because some of the items available would certainly have been worth trying. While the snake didn’t look particularly tasty, the fried starfish on a stick had a lot of potential. After exploring the market a little bit, a few of us decided to make our way over to Tiananmen Square to have a look at it at night. We hired a couple of rickshaws and in just a few minutes were waking around the largest public square in the world. Through we couldn’t go into the square at night, we were able to walk some of the perimeter and take it all in from across the street. It was certainly worthwhile to visit at night and picture the entire square filled with students and protesters as it had been back in 1989.

The second day in Beijing was one of days I had been waiting for since the early stages of planning the trip. It was the day dedicated to hitting the tourist high-points of Beijing. The day started with a trip to Tiananmen Square and the Forbidden City. Tiananmen during the day presented a stark contrast to the previous night’s exposure. It was buzzing with activity as tourists took it in, hawkers sold their goods, soldiers stood vigil and people with things to do strode purposefully through. Directly across the street from Tiananmen was the entrance to the Forbidden City. Looking up at the imposing red walls it was easy to imagine what it must have been like to be an explorer from the west who was to be brought before the emperor. After walking through the arched tunnel and into the open square inside the impressiveness of the Forbidden City only increased. Using the audio tour I was able to learn about the history of the city’s design and construction as well as the history of the inhabitants. It is truly an amazing place and I could easily have spent an entire day there, but the afternoon has us traveling to the Great Wall so I headed back to the bus.

To Be Continued...

Review of HBR: Doing Business in China

The Harvard Business Review on Doing Business in China is comprised of a series articles analyzing economic, cultural, and historic differences that affect the way business dealings are handled in China. The compilation is not too long and would make a good read for any westerner looking to conduct business with the Chinese. Each of the eight articles starts with an executive summary that I found somewhat unnecessary as the articles themselves are not extremely long and none of them were overly complex.

Having read these articles after returning from China and completing all of the work associated with the trip, I found much of the information redundant; but there were a few points that struck me as particularly applicable and worth noting here. One of the articles focused on negotiation and the differences between the western techniques and those used in China. Westerners tend to expect things to happen swiftly and directly while the Chinese will be more cautious and are used to more subtle maneuvering. These differences can be linked to cultural differences that have emerged over the long history of the Chinese people. TANGENT: As the article explored these differences, I found myself thinking of some of the intellectual property issues discussed in the preceding article and on the global political scene. The intellectual property regulations that we seek to implement through the WTO (among other organizations) don’t take into account these cultural differences and I wonder if they aren’t looked at in the same way as western negotiations – domineering and unrefined. Perhaps western politicians should read a few more books about conducting business in China before sitting down to author treaties, regulations, etc. The focus on short-term results is also an interesting point. While China, on a national level, is very long-term oriented, the current environment of double-digit growth has created a decided interest in succeeding NOW. Dealing with a Chinese company means grasping where and when they expect success in order to be working on the same page. While this seems like an obvious consideration prior to entering into dealings with anyone, it may be something that is easily taken for granted and regretted later. Understanding the goals of the Chinese may not be as easy as it sounds as they are less likely to come out and divulge their tactics and expectations. As with negotiations, taking the time to build the relationship and trust is integral to having a successful relationship for any extended period of time. The final high-point of the articles was the importance of understanding the market before trying to enter into it. There are many factors that influence the Chinese consumer and they are not always the same as those of the western consumer. Spending the time and energy to understand the various factors that influence the Chinese buyer can be the cornerstone to success in the Chinese marketplace.

The only real weakness to this “book” is that it is not truly a “book.” It is only a collection of articles and thereby does not fully explore each of the topics it covers. The information is certainly good, and being a relatively quick read, I would definitely recommend it to a businessperson headed towards business in China. It can provide a decent overview of some of the key differences in working with China, but I would recommend following it up with the other two books I read (One Billion Customers and The World is Flat) to really get more of a feel of how things are and where they’re headed. I probably would have enjoyed it more if I had read it first, but the authors are clearly knowledgeable in their areas and provide some good insight that can potentially provide great benefit.

The World is Flat

Thomas Friedman’s The World is Flat: A Brief History of the Twenty-First Century poignantly illustrates a changed (and still changing) global economic environment that the public seemingly has not yet fully realized. It is not only an appropriate read for the students within our class, but would probably serve as a good wake-up call for the rest of our country’s citizens. We are not secure at the top of the mountain and there’s no reason to believe that we won’t get passed by.

The flattening of the world that Friedman writes about refers to the removal of obstructions that have kept many of the world’s people segregated, suppressed, and uninformed. The “flattening,” fueled primarily by the technological and telecommunications boom of the last 25 years, has made it possible for countries that were lagging far behind in the economic race to pick up so much momentum that they can now run with the leaders of the pack. The long and short of the flattening concept is that nobody and no place can be counted out as either a competitor or an opportunity.

The book follows a linear path, making its claim early on, and then exploring it as the book continues. After providing evidence of the flattening through the analysis of ten forces that flattened the world, Friedman goes a little more in depth on the politics that played into the flattening. The book wraps up with discussion about who will and will-not be affected by the flattening and a bit of advice on how to avoid being passed by.

The 10 “flatteners” are a mix of major political events and corporate actions. Each flattener is analyzed in terms of how it removed some level of barrier towards globalization. Beginning in 1989 with the fall of the Berlin Wall, each flattener brings the reader closer to present day and closer to a flat world. Friedman discusses corporate cultures, outsourcing and in-sourcing, new software models, and the steroids which help fuel the fire.

Friedman presents his “triple convergence” in the following section. It combines new people (previously closed societies), new methods, and new technologies as three factors that have led to the flattening the world.

The convergence is followed by analysis of America’s role in the new flattened world. He describes the groups of people who have nothing to fear: the untouchables; however, through illustrating the groups that are safe, he underscores the groups which are not.

The book is rounded out by some guidelines for companies and individuals who wish to survive and succeed in the new world. He urges the reader to embrace the flat world and the new technologies, methods, and people that are guiding it.

On the whole I certainly enjoyed the book and would recommend it, but Friedman’s writings do requite a little bit of commitment from the reader. I read Longitudes and Attitudes, another book by Friedman, about two years ago and this book swiftly conjured up memories of his style. Without question, he has done his homework and knows his material; his arguments are well developed and supported by plenty of evidence. He is able to draw from history, politics, pop culture and business to paint a global picture that would otherwise be hard to see. However, he can become somewhat redundant.

I shudder to think about the number of times the term “flat” was used in the book. Many arguments seem to go on too long and there are chapters that had me aching for the end. Additionally, though I his arguments were all well supported, I don’t know if I can ascribe quite as much significance to some of his “flatteners” as he did. I wasn’t paying a lot of attention to the economic impacts of Netscape’s IPO while in high school; so perhaps I am not in a position to argue his reasoning without doing my own homework, but sometimes it seemed that he made events out to be overly important.

Be that as it may, there is a lot to be taken away from this book. It helps filter some of the noise out of the complexities of globalization and will provide you with appreciation for where we are, where we are headed, and what needs to happen for us to get there.

Flooding in China

Not sure if anyone's been watching the news lately... but China's been hit with some SERIOUS flooding recently. Apparently it's a cycle that hits every year. They specifically mention Fujian province as the hardest hit (just up the coast from where we'll be in Shenzhen)... they also mention Guangdong province (where Shenzhen is located). Their frequent battles with natural disasters have helped them improve their emergency response and an interviewee knocks the U.S. response to Katrina. In you're interested in viewing the CNN video, here's the link:

http://www.cnn.com/video/partners/clickability/index.html?url=/video/world/2006/06/11/grant.china.floods.cnn

The Companies and Places we will visit

ShenZhen Newly EverRise Electronics Co., Ltd.
Newley EverRise appears to be a manufacturer of power-related products. I recognize some of the components from within computers that I have worked on, though I could not tell you what their function is. The facility appears clean and modern, but beyond that there is not much that I can interpret. I am interested to see the size of the facility and learn why they have located in Shenzhen and what advantages they derive from being there.

BBK Cell Phone Factory
It appears that BBK produces more than just cell phones. On the website there are images of home theater components as well. Everything appears to be quite sophisticated and the webpage layout is similarly advanced. The phones I saw represent the top of the line products in the U.S. In visiting the cell phone manufacturing facility, I will be interested to see the level of precision needed to produce these devices, and the way in which these devices are handled as they move through the production line. I would like to learn a bit about the process they go through to sell their phones to service providers, and where they see the industry headed.

Yantian Seaport & Logistics Center
The Yantian Seaport should provide a startling contrast to seaports in the U.S. My family has been involved with the shipping industry for two generations and has told me that the ports outside of the U.S. really put ours to shame. The volume of material being shipped out of China has me expecting a more modern port, with more advanced handling of containers. I would like to get an idea for the layout of the port, and learn what steps they have taken and plan to take to increase efficiencies, reduce conveyance, and improve throughput. Are any Lean Manufacturing principles in place? Could they be utilized?

PWC
PWC is well known as one of the largest accounting firms in the nation. There presence in China is not unexpected, as they must surely see many of their clients positioning themselves there or operating there already. I would like to learn a bit about the differences in handling accounting in China, how the government structure affects their business, and what some of the difficulties they have faced have been. What Chinese firms do they compete with and how do they compare?

CBRE
CBRE is certainly expanding their operations in China. They have quite a few offices already and from what we learned in our pre-departure session with Bill Chillingworth, they will continue to expand. Since Shanghai has a large financial district, I would be interested to know if they are conducting only real estate business there, or if they also use it as a hub for strategic planning. I would like to learn a little more about how they analyze Chinese markets as compared to those in the U.S., and if they are able to utilize any of the same models from other countries in China. My suspicion is that they have had to adapt much of what they do in order to be successful here.

Shanghai Urban Planning Exhibition Hall
The Urban Planning Hall should provide us with fantastic background for our trips to CBRE. The City and Regional Planning course I took in conjunction with the Bank of America Low Income Housing Challenge earlier this year really opened my eyes to urban planning and its importance to economic growth and prosperity. The rate at which China is expanding only underscores this importance. At the hall, I hope to learn how China tackles this issue and how their methods differ from those used in the U.S.

HSBC
HSBC, like most companies we have learned about, is expanding its business in China. A recent press release posted on its website denotes that they recently opened another sub-branch in Shanghai. Clearly HSBC sees great opportunity in China, but I am curious to know if they are more apt to focus on business customers since the Chinese people do not readily incur the massive levels of debt that we take on in the U.S. If they are more business-customer-oriented, I would like to know what they consider their strengths, and why they think I should choose them if I were to take my business into China.

RR Donnelley
RR Donnelley provides printing solutions for businesses around the globe. Their services range in size and scope and incorporate batch jobs and long term contracts. They have probably moved into China because of the potential for cost savings and sales growth. As China continues to expand, RR Donnelley sees a huge market for their products and having a foothold in China will help they expand at the rate of China’s economy. I am interested to know how relaxed environmental policies in China affect their business and what steps they take to decide how to handle environmental concerns. I would also like to know if their competition in the region forces their hand on some of these issues.

Microsoft Global Technical Service Center
The MS GTSC provides first tier support for all of Microsoft’s software, products, and platforms. I assume they were attracted to Shanghai by the number of highly educated workers available, new infrastructure, proximity to manufacturing, and potential for regional expansion. Having a major division located here will help Microsoft’s name in the region which is important given the major intellectual property battles that will almost certainly have to be fought moving forward. I am interested to learn about how Microsoft passes issues through their chain and back up to higher level groups located at different global offices, and how the different divisions interact with each other.

Carrefour
Carrefour is the second largest retailer in the world trailing only Wal-Mart. Headquartered in France they now have stores all over the globe. They appear to have been the first company to merge a supermarket with a department store. I expect that they are hoping to expand throughout China and become the go-to location for low prices and large selection. I will be interested to who they see as competition and what inherent advantages their business model gives them in the Chinese market. I also imagine they may be in China to introduce products manufactured in China to the rest of their global stores.

Shanghai Museum
The Shanghai Museum features over 120,000 pieces of ancient Chinese art. The scope of the collection is appropriate given the scope of Chinese history. The new museum built was built during the 1990’s in the center of the city. This clearly makes it accessible to residents and visitors, but at the heart of the city it is also a powerful reminder to all who visit about the breadth of Chinese history and power. I am interested to learn more about Chinese history while visiting the museum and to learn what exhibits travel and to where.

Suzhou Industrial Park
Though it was difficult to garner any insight about the park from the website, the images do tell me a little more about what to expect. The area looks quite a bit larger than I would have expected. It also appears to be modern and comfortable. I am interested to learn what other types of industries are located in the park and what features attracted the owners to this location when they moved their.

U.S. Commercial Attaché
The U.S. Commercial Attaché provides information and assistance to help businesses succeed within China. They have programs to help companies with establishing themselves in China, promoting their business, protecting their business, shipping out of and into China, etc. They also conduct seminars and facilitate networking. I hope to learn about the changes that they have seen take place, and where they see U.S./Chinese business dealings heading. How much has China opened up to the world and is that trend continuing?

CBRE
Having already heard a little bit about CBRE from our predeparture session, I am very excited to visit their offices in Beijing. Clearly there is enormous potential in the planning and development of many major cities in China. CBRE has wisely positioned their self into the Chinese marketplace to garner understanding of how the Chinese real estate market varies from our own, and to be able to act swiftly and surely to maintain a competitive advantage. The upcoming Olympics are certainly going to illicit more investment in a short period of time than would otherwise be seen and will hopefully provide a glimpse into how other cities will be developed. I would like to know what level of vacancy CBRE sees in China and how they adapt their methods and models to draw comparisons to the US market, if at all.

Sun Microsystems
Though I was unable to read the information on the site, there were two terms in English which jumped out at me. One was ‘java,’ Sun’s development platform which is often used for web-based applications. The other was ‘Solaris 10,’ Sun’s latest operating system. The company is probably in China for a various reasons. Certainly there is plenty of intellectual capital to be utilized in China, and at a lower cost than in the U.S. They also may be looking to gain a foothold in the Chinese marketplace with their operating system. Much of Eastern Asia is already using Linux and other alternative operating systems, so Sun probably sees an opportunity to take market share away from Microsoft and other competitors. I would like to know if Sun believes that Microsoft can be toppled from their perch atop the OS marketplace. And since Sun also develops workstations that their operating system runs on, I would like to know how much of an advantage they feel that gives them.

Peking University
Peking University is a large university with a strong focus on research and diversity. They have a giant number of programs available which include sciences, management, education, and humanities. They are aiming to be among the best universities in the world, though they do not say what they are doing to get there. The photos provided of the campus help paint the picture as a much larger school than Cal Poly or CSU Monterey Bay. I expect it will feel a bit more like UC Davis in size. I will be interested to see how Peking University views itself in comparison to other schools within the county. I would like to know how competitive the schools are with each other and how that manifests itself.

Tsinghua University
Tsinghua University appears to be a top notch school located on beautiful grounds in (near) Beijing. The school’s presence on the web is well organized and professional – and that’s just the English site. They tout ‘great statesmen’ that came from the university and discuss the strong support they receive from the nation. It leads me to wonder how much influence the government maintains over higher education in China. Obviously students have been at the heart of some social unrest in China and I would be interested to know if that is a trend that is increasing or decreasing. Also interesting was the news page that initially shows up for the English site. It features achievements in math and medicine which, in my mind, underscores the Chinese focus on science and the U.S. shortfalls we have seen of late.

Panjianyuan Antique Collection Market
The Antique Collection Market was started as a flea market almost 15 years ago. It has now grown into a giant marketplace where businessmen from all over China maintain stalls selling arts & crafts, second-hand goods, and historical items/replicas representing a wide array of Chinese ethnic groups. The market is comprised of more than 3000 stalls covering nearly 5 acres of land. I am looking forward to seeing items representing different aspects of Chinese culture, and learning a little about the many ethnic backgrounds found within China.

"China's Honor Code"

Los Angeles Times
Front Page
Apr. 15, 2006
Times Staff Writer: Mark Magnier

The LA times ran an interesting article about the changing family dynamic in China. Apparently the long running Chinese value or respecting ones elders has started to wear away and there seem to be many groups in China that are not at all pleased about it. Children, in some places, are now being penalized by public shaming, fines, and prison for not taking care of their parents. In a part of Shanghai: "Anyone who doesn't visit at least once every three months faces having his or her name posted on a community signboard." In another instance: "They would fine offspring $5 if they didn't invite their parents home for Chinese New Year." And the government, though they prefer some level of mediation, will allow children to be taken to court and put in jail. "Shirkers face five years in prison for failing to support or take care of their parents."

The article goes on to provide examples of children who have been sent to jail, been locked out of their own houses, and had various other penalties imposed up them. It also mentions events in which "good" children are rewarded, and describes state sponsored television programming and advertising geared at encouraging children to take care of their parents.

On the whole, I found the article very engaging; certainly unlike anything we would see back in the States where family values and traditions have been so severely diluted. Though some of it seems rather extreme, I find myself on the side of the punishers. Shame on those who refuse to support the two people who almost certainly supported and sacrificed so much for them. The fact that the family has been such a strong unit in Chinese culture for so long is an enchanting aspect of the mystique. I suppose all things come to an end, and conservative values in an increasing free society are certainly going to be hard to maintain.

An entertaining article though, providing a small window into Chinese culture from the Chinese perspective.

One Billion Customers

James McGregor’s One Billion Customers: Lessons from the Front Lines of Doing Business in China makes for an informative read and good reference source for those looking to gain an understanding of conducting business in China and those actually looking to do it.

As a book, with no specific relevance to the content, there are four aspects of the book that I am especially fond of. First off (having read the hardcover version of the book), upon opening the cover of the book the reader is immediately exposed to a map of China. This map is duplicated on both the front and back covers and illustrates China’s provinces and major cities, along with showing all of its borders, and even gives a rough feel for the mountain ranges that crisscross the country. As a reader, and a China novice, I referenced those maps countless times throughout the book and was able to get a much better feel for the country that I would have without it. The second thing that impressed me was the table of contents which provided a short description of each chapter in addition to the chapter title. While I can’t fully appreciate this little detail now, I have learned the value of it from past readings. Six months or six years from now I will be able to look back at this book as a reference and navigate to the information I am looking for. In addition to the descriptions found there, the chapters finish with a set of bullet points to serve as takeaways from that chapter. The author dubs them “The Little Red Book of Business” and they provide an excellent summation of the concepts he tries to get across. And finally, I thought the look and feel of the book was comfortable. The chapters are all broken down into subsections with headings and the font, spacing, and paper texture are all quite pleasing.

The structure that McGregor chooses to illustrate his points makes the book easy to read and understand. He starts off with a bit of modern history, taking the reader swiftly from the late 18th century into modern day. I was pleased to see the book start off by touching on China’s history because I believe it to be one of, if not the most important thing a foreigner should acquaint himself with before experiencing their culture. References to China’s history and recent modernization are speckled throughout the book. After ramping up to modern times, the author begins relating his themes to the reader through the use of numerous case studies. The author’s candid storytelling makes the various cases entertaining as well as educational. While imparting the facts of the case, he also does a good job at describing the players and giving them personality. It reads a bit more like a novel than I would have expected for a book that comes from Wall Street Journal Books, and there are areas that are suspenseful, sad, and triumphant.

From a business perspective I found the book had a number of strengths, but also a few distinct weaknesses. One of the major themes focused on throughout the book was the fact that doing business in China means doing business with the Chinese government on some level. McGregor makes it clear to the reader that it goes beyond some minor bureaucratic red tape and paperwork; that it is not the same as going to Germany to business. If a company is looking to expand its operations to China for a chance at some of those one billion customers, they need to plan on working with the government and be willing to change their original plans to adapt to what the Chinese are looking for. Along those same lines, another key point was the value of building strong relationships with Chinese government personnel and business leaders. He makes it clear that it is not possible to go into to China as a foreigner and succeed without local support. There is a lot of relationship building that needs to take place and it is wise to keep an eye on the local social and political climate. A final idea that seems basic, but was still helpful to see on paper, was the myth of one billion customers. It is all too easy to view China as a giant marketplace with boundless potential, but the author’s cases and arguments emphasize the fact that China is no more one marketplace than the U.S. is. The manager looking to do business in China can’t get caught up in the mystique; rather they must analyze the market and find their targets, then pursue them with focus.

My only real gripe with the book was its lack of historical perspective. There is so much insight to be gained by understanding the relationships that the “middle kingdom” has had with foreigners in the past. McGregor could have gone much more into depth on these topics and provided additional insight into the core of the Chinese persona. Perhaps it would have taken away from the flow of the storytelling, but it would have added value to the book.

All things considered, One Billion Customers gets my recommendation for those who have not yet read it. It doesn’t sugarcoat the reality of what is a very difficult task that takes immense planning and commitment. There is a lot of good advice for anyone headed to China to conduct business, both in the form of what to do and what not to do. The layout of the book truly allows for you to learn from the mistakes that others have made and illustrates some of the keys to being successful as an outside entity moving into the Chinese marketplace. That’s my two cents, but you’ll have to read it yourself to know for sure.

One in a billion...

...well, one in one billion, three hundred six million, three hundred thirteen thousand, eight hundred twelve. That's the most recent published population of China from the CIA. If you can't learn from 1.3 billion decendents of the oldest, surviving, civilization known to man...

So...What's going on here?

I've created this blog as a precursor to a trip I'll be taking in the summer of 2006. Where am I headed? That's right, China.

So thanks for stopping by. Come back whenever you'd like. I'll try to post updates fairly often and welcome any comments you have.

Until next time,
Zai jian!