Those ‘Dickensesque’ Internet Cafes in China
November 13th, 2007
One of the purposes of our trip to China is to go far beyond the customary ‘oohing’ and ‘aahing’ at the Great Wall and the Bund and see how good your skills are are spotting new markets and new business opportunities. See, e.g., my recent post, Linking Global Buyers With Chinese Factories … In the Context of Lingerie.
For a number of you, the California or American market will likely not be enough to sustain your business and/or industry over the long term. My goodness; as just one example, see this NY Times article that was posted on its web site about two minutes ago, Apple Shares Soar on Chinese Interest in iPhone.
Like it or not, and whether popular or not with various political factions in the world, people with solid business skills spot market opportunities, both domestic and abroad, and try to create a business model that can fill said need, and if they want to be around for more than a few days they do so at a profit. The really admirable ones, of which there are many, work hard to do so in a socially responsible and ethical way.
I think the day will come when many of you are asked by your employer to get on a plane and fly to a place like China to see what type of business your firm could or should be doing there (or alternatively, you will be entertaining a group of Chinese business people traveling to the USA trying to better integrate their business model into the American economy).
Hence, this trip.
On that note I just came across these interesting October 11, 2007 posts by Paul Denlinger at the China Vortex blog:
He has an interesting business take on Internet cafes in China. What I found even more interesting was his take on the sociological ‘Charles Dickens like’ significance of said venues in China.
I have been in a few of these, but never thought of what Mr. Denlinger writes about. I wonder if things might be different in China’s second or third tier cities. During your off the clock time, step into one one these cafes if the opportunity presents itself and do your own market research.
By they way, during this year you will often hear the terms “first tier cities” (e.g., Shanghai, Beijing, Guangzhou, etc.), “second tier cities” and even “third tier cities” in the context of our China discussions.
Do you know how many cities China has with over 1 million people? China officially has 49 cities with populations over 1 million (source: Rob Gifford’s, China Road, 2007). This is a country where you can travel across China, arrive in a city that is twice the size of Houston, and never had heard of the place. This largely urbanized population can (not always) mean that American products are able to penetrate the Chinese market more easily.
What about India? Try 39 (as of 2001; source: List of Million Plus Cities — India, Wikipedia)
Did you know how many the US has? Try 9 (as of 2000; source: Nations Encyclopedia).
To appreciate China and India, at some point you have to try and get your head and arms around the masses of people and humanity in these two countries, and then think of how that impacts what you are seeing, feeling, tasting and smelling while you are there.
For example, most Westerner political leaders seem to have drunk that Kool-aid that makes them believe and argue that ‘western style’ democracy is a good thing that the rest of the world should follow and they don’t get why the rest of the world does not do so. Yet, one thing they often gloss over and never explain to the rest of us country bumpkins is whether such a model can really work in a country with a population of 1.3 billion, and how? Criminey, we/the US have a hard time moving forward and reaching a consensus with a population size of 330 million of largely white people. If a country had 300 federal level senators, rather than the 100 US talking heads, er, I mean US Senators that we have, with 50 plus ethic minorities such as China does, how would they function and get anything done in a reasonable time period?
India is a democracy, and it’s diversity of people is incredibly immense, but many believe that it has become a hyper-democracy that can’t get much done at the governmental level (but the business level is a whole other story).
See also this related article by NY Times Senior Reporter Harold French International Herald Tribune article titled, Letter from China: What if Beijing is Right? You also need to read Randall Peerenboom’s, China Modernizes.
What markets do places like China and India present, that you think you-your firm-your industry will be a part of in the future, whether you like it or not?
And is democracy the answer for China? If so, highlight what you think that would look like and how it would work, and then patent your solution — you will be rich and will have provided an answer to a complex question that nobody else has yet persuasively come up with and/or argued.
Entry Filed under: Pre-Departure, Beijing, China, India
7 Comments Add your own
1. Jeff Mohr | November 17th, 2007 at 11:40 pm
Democracy is not the answer for China, at least not the democracy that westerners imagine when they hear the word. Should the public have more say in the government? Yes. Does this mean we should duplicate the US government in China? No. I tend to agree more with the the “panda hugging hogwash” from the above China Law Blog post:
I believe the best system for China involves reform of the current system while maintaining the party’s control. (Read HERE for some of Hu’s views on democracy) Especially after hearing from Dr. Morris that any drastic political reform will result in the deaths of millions of people as it has throughout China’s history. How to create and implement the incremental reforms is the difficult part, and is something that I hope to work on and post in the coming months.
2. Simone Michel | November 20th, 2007 at 3:09 pm
I have to agree with Jeff that a change to a fully democratic system how we understand it is not in the best interest of China. It’s understandable that many people want a change, but is a sudden shift in a political system beneficial? Do we want a revolution as China or other countries like France have seen it before?
Yu Keping, a major player in China’s political process has given many speeches about democracy in China. He thinks that it is the best of all political systems and that China should not have only two people define the policy by themselves. From my point of view, I think it is very interesting that you can read many articles on debates going on in China about the need for elections and people demanding a new system. That such a discussion can be held openly in a controlled media landscape shows me that these discussions are tolerated “from the top”; maybe they are even desired? The party has certainly increased their self-confidence. Just think about how they used to controvert the “western liberalization”. Now they want to find their own democratic way. An idea would be to start democratize the internal party, the convention, expanding elections into the small towns etc.
My point is that I think China has already started to follow a new democratic path. Even if they are not copying our western democratic system, they can certainly learn from it.
3. Jesse Bilsten | November 21st, 2007 at 2:57 pm
I think we’ve hit the nail on the head as far as no traditional democracy. I’m a firm believer that the citizens of a country should pick the style of government that best suits their cultural needs. In the case of China, their culture dictates a vastly different structure and hierarchal system than our traditional western democracy can provide. Especially with the amount of people they have, a democracy would not work effectively as believed by the U.S.
It seems like they’re on the right track though. As observed from the Coal Mining and Green issues raised in the other posts, there has to be a tipping point. As Simone said, they’re talking about it and it’s tolerated, so maybe they’re entertaining the idea at the top in some fashion. Maybe we’ll see a mix of democracy and communism that will form a new style of government that will better represent 1.3 billion people but still be fast moving enough so as not to get stuck in red tape.
4. Matt Fencl | November 21st, 2007 at 5:48 pm
Simply describing the Chinese government as “Communist” and the American government as “Democratic” is problematic. While both governments fit into these generalities, neither one is accurately described by them. Yes, the governing body of the People’s Republic of China is certainly communist, by name and by definition. However, I challenge anyone who thinks the definition ends there to read the following article titled “Communist party congress sees delegates from diversified ownership.” I’ve posted the link below:
http://news.xinhuanet.com/english/2007-10/19/content_6911079.htm
The Chinese government depicted in this article doesn’t seem to fit the conventional mold of textbook communism, the sort of “hide your children” and “Red scare” vibe. For those people who don’t read the article:
Both the government and private investors have stake in Chinese companies.
Official figures show the non-public sector currently produces 67 percent of China’s GDP and contributes nearly 80 percent to the country’s economic growth.
Many private business owners are Communist Party of China members.
Ironically, “Democratic” doesn’t really describe the United State’s government well either. In a pure democratic society, all members of society vote on everything. That means that we should be voting on everything from tax increases to road construction budgets. We of course do not vote on these issues but instead elect representatives to decide for us. The real kicker is that those representatives were elected by only a small fraction of the American people (most of us, including myself, don’t vote). This is not a democracy people…it’s a republic.
5. Kye Tripp | November 21st, 2007 at 6:46 pm
Well if you think about it china sort of acts like a two party system just like ours. You have the main party that is in power and the large group of people that agree with this party. Then you have a large group of people that do not agree with the current views of the party in power. Then when this group gets to be big enough it overthrows and kills the party in power. This then results in a change in views. See it is like democratic and Republican. I know it is not exactly the same but it works for china and they are constantly growing and they are very proud of their history. I think that their key to success is because they build on the history and learn through it. So would having Democracy in China be a step forward? I think that through reading all of these articles about china it seems that everyone is trying to make China become more like America. The say their safety laws should be like America and that their politics should be like America. Why should China be like America? China is beautiful as is and their politics and rules and everything else make it that way. America is not perfect and either is China that is what make each place unique. I do not want everything to be the same all around the world that would just be wrong.
6. David Zarcone | November 22nd, 2007 at 7:48 pm
China is nearly completely surrounded by democratic states (India, Mongolia, Japan, South Korea…) and is one of the few remaining communist countries in the world. Is it time for a change? However, in many countries the period of change from old to new government systems is a horrible and sad time. Poverty, suffering and violence are just a few of the effects. For example, when the Soviet Union rid the communist system, many people thought that the cure was worse than the disease
If China converted, who would benefit the most from a democratic government? Probably the farmers since they make up roughly 75% of China’s population. However, urban areas receive most of the government’s expenditures. How would a democratic parliament assess Chinese national interests? Above all it would probably try to improve the living conditions of the millions of people in poverty. In order to free up this money, China would have to stop investing so much money into military. This would mean that they would have to become friends with the US (its biggest market).
Most of this information I read from an article entitled “How Would Democracy Change China?” written by Arthur Waldron in 2004. http://www.fpri.org/orbis/4802/waldron.democracychangechina.pdf It is a very interesting read and informative pertaining to China’s conversion to democracy.
7. Pierre Michael | November 22nd, 2007 at 8:40 pm
Interesting comments above, it seems to me that the authoritarian style of government is deeply rooted in the Chinese people, I don’t think it’s going away anytime soon.
Politics aside, I want to talk about the internet usage in China. From the “Digging deeper” article, they mention that there is a huge underclass of single males who live, eat, play, and sleep in filthy city internet cafes for about $5 a day. Another article mentions that “there are more Chinese internet users than all of North America combined…” continuing to say that only a small portion have access to the full internet. The potential for online revenue seems like it could be tremendous. Companies are realizing that just adding a .cn extension, and roughly translating the page isn’t cutting it. Clever advertisers are going to need to actually cater to the Chinese people by creating websites that they can relate to. Should be interesting to see how companies approach this.
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