Submitted By: Brian McCarthy

We have been advised to save most of our shopping efforts until we get to the final stop of our upcoming business trip to China to avoid carrying extra weight and baggage. The final stop appears to be in the capital city of Beijing, and it is a good idea to get an understanding of the market culture before we get there.

Whether you are shopping in Peru for an alpaca sweater or you are purchasing a roasted chicken at a market in France, you learn how to barter and how to navigate in the buyer/seller culture of the specific area. Read the article Service With a Smile – It’s the Law to understand the market culture in Beijing and what the government is trying to do to make a change, fast!

Beijing will host the 2008 summer Olympics and China is making many efforts to prepare to be on stage for the event. A new law, seeming related to the preparation for the Olympics and related to its image in general, is to change the current customer service practices in Beijing. According to the article, the new law was created to “trump centuries of culture” and to curb a “tradition of arrogance in the commercial and service industry.”

Specifically, the new law is aimed at stopping some of the following practices:

* spitting
* impatience
* disdainful glances
* acting absent mindedly
* sarcastic or ironic comments

As you read the article, some things to think about are:

• How can a government enforce such a law?
• What impact will the new law have?
• Will the city be able to make a fast change before the 2008 Olympics or will such a change take more time?
• Is the culture a result of government-owned stores?
• Would the same culture exist if all stores were privately owned?

Submitted By: Victoria Whelan

In the Wall Street Journal on December 15th, there was an article on Chinese Media and the Olympics.

The government is worried about the cameras and notebooks being present will likely record the angry farmers, people campaigning for independence, etc. This is the first time in over twenty years that the Olympics are being hosted in a country where the government controls the media. Foreign journalists need permission to travel within China and domestic journalists are owned by the state, who has final say on what is published. China has reached an agreement to be more lax on foreign journalists, but not domestic journalists. Companies such as NBC are still figuring out how to cover the games since the use of translators is up in the air. Foreigners to China feel this is a step towards China’s reform, if all goes well.

It will be interesting to see how the Olympic coverage pans out since the tough restrictions and regulation of the Internet and other media. I wonder if this was something the Olympics looked at when choosing the site. I feel that there are so many venues covering the Olympics there is no way for China to avoid criticism on some of their policies and regulations, even if they attempt to block the release of such information. There is always a black market, just as there is in the Internet in China, and the truth is always revealed.

Check out this wonderful NY Times feature, with pics and sound, on a teahouse in Hangzhou. My current plan is to take you to a tea plantation outside of Hangzhou where you can see the real deal grown. These tea plantations are quite beautiful. Tea is a big, big, big part of China. Get ready to drink lots of it.

You should also be reading up on Hangzhou in your travel book. We will likely use Hangzhou to catch some rest and relaxation from the fast pace of the trip. Hangzhou is where many of China’s artists and writers used to come live after they made their fortune. That pattern continues today. Marco Polo, who once took a boat ride on the famous West Lake in Hangzhou, called it one of the most wonderful experiences of his life. I would agree.

I am interested in hearing if you are interested in visiting a tea plantation, and, based on what you read on your own time about Hangzhou, how you feel about spending some time there. In my own view, it is less crowded and crazy than Guangzhou and Shanghai. Comment away.

Each year as part of the trip, where possible, we try to informally hook you up with a group of expats in China or India for lunch, dinner or appetizers. These are interesting, accomplished and talented people. I want you to be thinking about what types of questions you would like to ask them over a meal if this comes together so that they feel we prepared for a visit with them and we utilize their time effectively. We want to make a great impression on these folks.

For example, why did they become an expat? How did they become one? What are the pros of cons of being an expat? Do they have families and if so what do their families like/dislike about living in China or India? When, if at all, do they plan to return to their home country? Do they comparatively make more money living and working in China/India than than back home and is their standard of living higher in China/India? What, if anything, did they do to prepare for living and working in China/India before they arrived? How are their kids schooled and how much does it cost? Where were their other postings before China/India? Has/will their working in China/India more quickly advance their career than if they had stayed in their home country? These are just a few of the questions you might ask them. Click the “Add Comment” link below and list a few of your own questions you would like ask in order to start to prepare and to get you thinking about this aspect of our trip.

Even if you drink and buy into the Koolaid that California or the West Coast is the be all and end all of working and living and you have no desire to presently become an expat, no problem, but you may one day find that things have changed. None of us know what the future may deal to us. You may find that your hate your future job(s) and want to experience something new and adventurous outside of Cali. Or, you may find yourself working for a firm or a client that sends you overseas (China/India?) on a temporary or full-time assignment that is too good to pass up. And if not you, then consider the very high probability that your kids will one day be in the expat game given the way the global economy is working and developing (and how expensive it has become to live in Cali and how most folks have little desire to move to Iowa for work; the California market can/will only go so deep for our children so why not head to Asia for business?  Through this trip experience you can give your kids some good advice!

For a good chapter on the pros and cons of the expat life in China, see/read Chapter 9, “Living in China,” in China CEO: Voices of Experience From 20 International Business Leaders.

Professor Carr October 4, 2007 Addendum: See also this previous post I did re: Benjamin Ross’ fantastic journey to China and his blog (Ben’s Blog), AND, check out this recent interview of Ben that recently appeared over at the Ex-Pat Interviews blog re: Ben’s working in China.

Professor Carr Janauary 8, 2008 addendum: I just came across this article and questionnaire from TransitionsAbroad.com that helps people size up whether they can hack living and working aboard. It is not terribly scientific, but it touches on the main points — flexibility, adaptability, independent, not a me-me-me person, etc.

Click HERE to check it out and take the 5 minute questionnaire.

How did you score?

Professor Carr July 23, 2008 addendum: Check out this excellent blog post I just came across, To Localize Or Not, That’s The Question. This blog is by a former upper management Sun executive in China who now works at Juniper in the Bay area. Although his post relates more to proven upper management execs who have had success and proven performance in their home market and THEN are sent to China to work for the company along with the solid and attractive financial expat package that can go with it, there are some excellent nuggets in this post that will help and apply to you in your earlier career stage. E.g., the tax info in particular.

To highlight the growing importance of China, the Time-Warner empire just started a blog solely devoted to China and only China (click here to view the Time’s China Blog). To me, the interesting development is that a number of folks in blog land are blasting it pretty good for being too mainstream, not terribly insightful and/or too PC (click here and enjoy these comments/discussion thread in particular).

As I read over these comments on this China Law Blog posting, I could not help but think that at times it is good for all of us to step back and evaluate where we get our business news and what the agenda of the author/publisher may be — whether its blog land, the Wall Street Journal, The Economist, the Financial Times, NY Times, Time, Newsweek, Business Week, Fox, NPR, CNN, our parents, etc., etc., etc. Each source we read, watch and listen to for our business news and information has its strengths and weaknesses. For example, I read the Wall Street Journal, religiously, and LOVE its reporting, writing and journalism, but its daily editorials with their “business can never do wrong” koolaid make me gag, literally, and I teach in a business school!!; yet that obnoxiousness does not keep me from making sure I read this paper every day. I read the NY Times for different views and perspectives and a different style of journalism, and some of its stuff on China is great and other stuff is not worth a hoot. Similarly, I can’t stand Fox News (generally) but I do watch Bill O’Reilly because every now and then I learn something from him and that huge chip of rage he has on his shoulder. Heck, I do what I can in the limited time I have to blog, but even the Cal Poly MBA Trip to China blog has its strengths and weaknesses.

In the OCOB business school, I think we do a pretty good job of exposing you to business news (or trying). For example, in addition to your free online subscriptions, on the second floor of the building we also provide students with a free hard copies of the WSJ and NY Times, in part because those two papers have given us a good price AND both papers write a lot about cutting edge business issues and they have become two of the premier national and international papers out there. And, by having what some perceive as a “conservative paper” and what some perceive as a “liberal paper” in our hallways, no silly conspiracy theories can develop that the OCOB is trying to brainwash students into believing one thing or the other. We also do the same for you re: the local SLO Telegram-Tribune because as a college we feel strongly that if you are going to school here you need to read about and be educated about local community and business issues.

But my point is this and may sound a bit cliche’:

At the end of the day read … A LOT … and get your business news from different mix of good sources. This will help you be informed and as educated as possible about the world. Also, be aware of the strengths and weaknesses of each outlet and use some of the tools you learned in your Quant Analysis course to evaluate whether the data backing up a claim in any article or blog post is legit or bogus.

Nobody is perfect, including this blog, but if you read a lot and think deeply about what you read (even when you read the work of those you may not agree with) we can better see whether what our parents told us about the world and how to view it is true or false, and whether our own perceptions are on strong footing or thin ice.

I previously did a post on this PBS special on China that started to air last week.

Per this KCET link, it looks like parts 3 and 4 to this series air this week (”Shifting Nature” and “Freedom and Justice”), Wednesday, January 17, starting at 9:00 pm.

I enjoyed the first part (”Power to the People” and “Women of the Country”), very much, and look forward to catching the last two.

There’s a well known saying among those who write about China: “After you have been in China for a week, you think you can write a book. After you have been in China for a month, if you are lucky you might be able to muster a short article. After you have been in China for a year, you keep silent.”

The point of this quote is, the more you learn about and experience China, the more you realize it has too many faces, it is too complex a place to master, and you have too much to learn. Many of you (all of us?) will return from China with more questions than answers. If so, that’s okay and natural. It’s also, in my view, the way true education should work and is one of the ways a truly educated person learns to view and experience the world. Happily for us, our goal for this trip and course does not require us to become experts on China, but to gain a deeper understanding of ourselves, the global economy and our ability to operate effectively within it.

In China CEO: Voices of Experience from 20 International Business Leaders, attorney Norman Givant (Managing Partner, Shanghai office, China Practice Group, Freshfields, Bruckhaus, Deringer Law Offices) reminds us that China’s booming economic development has taken place despite the messy, chaotic, and confusing backdrop of the transformation from a communist to a socialist and market-based system. He very insightfully notes, “[Unlike many Westerners] the Chinese have no problem at all in living with contradictions. Their question is: Does it work over time?” He points to Shanghai’s’ remarkable growth as an example. “Look out the window: you see a prosperous, dynamic city that has grown tremendously in the last 20 years, and it grew primarily by ignoring the contradictions [e.g., the poor shanty hutongs/alleys that exist next to a five star hotel or world class skyscraper] and focusing largely on economic development.” (Page 205) Simon Keely (Head of the Hewitt Asia Leadership Center, Hewitt Associates China) echoes a similar tune: “China is full of contradictions. Here we are a socialist country, but it’s one of the most competitive places on earth.” (Page 115) Well stated. Both men clearly “get” and understand this facet of China. I don’t think this means the US is not a place of contradictions, but the China hands I call friends seem to suggest that in China the contradictions are deeper and more disturbing than most places.

For more great examples of some of the contradictions in China that will mess with your mind and tug at your heart, check out following recent Wall Street Journal [subscription may be required] and NY Times articles:

• How Capitalist Transormation Exposes Holes in China’s Government
• So Much Work, So Little Time
• In Booming China, Protest By Poor Intensify
• China’s Reporters Face a Backlash Over Investigations
  
• In Chinese BoomTown, Middle Class Pushed Back
• Chinese Success Story Chokes on Its Own Growth

Doing business in China, and much of Asia, can often involve a lunch or dinner banquet, with great food, drink, and lots of toasting.   It’s about spending time together and building trust and the relationship.   Some of the events thrown by firms or hosts on our behalf in China may have this element.  In China, the celebratory poison of choice is usually the famous maotai (discussed in this Wall Street Journal article) — a fiery sorghum-based liquor made famous primarily by Nixon and Mao at their historic summit and toasts of “friendship” in the 1970s when Nixon came to China.  Again, a big art of this banquet and sociological ritual is celebratory and to relax, part social to strengthen relationships, and in some cases part of the game is to get you on your heels through alcohol consumption so you are not thinking clearly and concede or disclose things you should not in a business deal. Having said that, and as I already pointed out in your FAQ document and reiterate here, I want you to remember the following things about China, this drink and such events:

1. Mautai is really, really strong and not for the meek. It looks like water, yet will knock you on your behind faster than you can blink. Men and women far bigger and stronger than you or me have been toppled by this stuff.

2. One of the oldest tricks in the book in China is for your host to drink water, while he/she toasts you time and time again as you are toasting with mautai. Don’t fall for this. While sometimes your host might do this to gain advantage (see above), it may also be the case that this is the 5th banquet your host has attended that week as part of the normal and regular course of doing business in China and to keep their own health in order they may choose to drink water but look/act like they are drinking mautai with you out of respect.

3. This is a business, not a party trip. What you do on your own time is up to you, but make good, safe choices and decisions. When/if you go out on your own, non-class time, never, ever get drunk in China (or anywhere you travel for that matter!). You will make bad decisions and you make yourself a target to be robbed or somehow taken advantage of. Even on your own time, don’t embarrass Cal Poly, the MBA program or the USA. Also, if you do, for example, go “clubbin” at night on your own time after class is dismissed and drink too much, remember that you still gotta get out of bed the next day, ON TIME, for that day’s activities — nobody gets to take a day off or “sleep in” on this trip.

4. If you don’t drink, no problem. No need to start now at such events. Just politely decline and toast your host using your tea, coke or water!

5. If you do try mautai, don’t mix it with beer. If you do so you will get as sick as you ever have been.

6. Re-read and follow rules 1 through 5 above.

Post Submitted by Meghan Girvin:

There is little doubt that China is experiencing many changes as it advances as a society. One of these changes is the increasing desire of Chinese citizens to own a car. China has been known as the “kingdom of bicycles” for so long and recent development has people moving away from bicycles and favoring cars as the major mode of transportation. Chinese citizens purchased nearly 6 million cars in 2005, making China the second largest car market. Also, car ownership is increasing in China faster than anywhere else in the world - 15% per year.

This trend has implications for both Chinese society and the world as a whole. The increased desire for cars has come with major highway and roadway construction projects. This means that rural areas will now be better connected to bigger cities and residents of these areas may be able to get better jobs and have more access to things like medical supplies. But, this also means that cars will take over the roadways and the lower class in cities that rely on bikes for transportation will be pushed from the roads and may have a hard time getting to work.

Do the positives for the poor in rural areas outweigh the negatives faced by the poor in cities? From a global perspective, how is this new trend going to impact the environment? There are so many people in China and if they start to own and use cars like we do in America it is going to have a huge impact on the environment. Should there be some sort of regulation put in to place that limits the amount of cars allowed in China? Is that fair? Also, if more and more Chinese are driving cars there will be more competition for oil. Will this impact our ability to obtain enough oil to support the way we live? There are many things that may be affected by this new trend in China and it is important examine all possible implications. For more on this topic, read the article Shanghai by Bike in Sierra Magazine.

[Prof. Carr Addendum: Good post. Oh, and by the way, you think that the traffic is bad in LA? Yeah, right. Check out this One Man Bandwidth post and You Tube video on traffic in Guangzhou, one of the cities we will visit.  See also the NY Times article directly related to Meghan's post, "GM Sees China, and the Chinese, in a Chervolet" -- it appears that only success in the Chinese market may save GM]

Post Submitted By Chuck Rylant:

Today I noticed an anonymous comment on my blog that appeared to be a spam advertisement for a book entitled The World is Flat? (Spam advertising on a blog is creative advertising I must admit.) The book written by Aronica and Ramdoo criticizes Friedman’s bestseller The World is Flat. Friedman’s book title does not include the question mark.

The spam advertisement directs the reader to a thirteen minute video that criticizes Friedman’s book. Part of that criticism is that Friedman speaks positively about globalization while ignoring companies that “exploit cheap labor in China, India and beyond.” Those who have read, or will read, The World is Flat by Friedman will find the video clip particularly interesting.

This topic raises many questions, some of which have been debated already, but are worthy of discussion. Do you think that corporations are “exploiting” labor in China or do they provide improved working conditions and jobs for otherwise unemployed people? Another question I have considered is whether it is the responsibility of U.S. companies to monitor the working conditions of employees working in China? Many U.S. companies have received criticism because of the working conditions in companies that are Chinese owned, but sell products to the U.S. companies.