[Combined two posts into this single post as Pierre and Kyle submitted on the same topic. - Prof. Carr]

Submitted By: Pierre Michael

Traffic, you think you have it bad!? Check this out, watch the video. As the rate of car manufacturing in India steadily increases, traffic is noticeably worsening in crowded cities like Mumbai. Consequentially, motorized two-wheelers account for 80 percent of all vehicles. Is this safe?

Making it by on their meager salaries, many families purchase motorcycles or scooters instead of cars because that’s all they can afford. These two-wheelers become the family vehicle, not one that they take turns on, but one they all ride at the same time. These transportation woes have many families worried about their safety; but what are they to do?

With an average wage of $1,740 USD a year and $4,020 USD a year for white collar jobs, it’s easy to see why cars are out of reach for so many. A 2007 report said that 77% of Indians live on less than 20 rupees (50cents) a day.

Tata Motors, also known as Telco, made a promise to sell cars for 100,000 rupees or $2,500 USD making it the cheapest car in the world, half the price of the current cheapest. The promise however, may have been made a little hastily. Reminiscent to the $100 One Laptop per Child, the company is running into increasing costs of raw materials and facing heavy competition, but they are determined to hold to their original promised price.

There are 7.7 road accidents for every 1,000 vehicles and the Accident Risk Index is forecasted to increase fourfold by 2025 making injury almost inevitable on two-wheeled vehicles. The Nano that Tata is proposing, although light and seemingly fragile, provides a protective shielding that could be instrumental in saving lives. This poses lots of questions though. With poverty rates quickly decreasing and more people able to purchase automobiles what will the roads look like? What will happen when the roads saturate with cars? Will everything come to a standstill? What about the environmental risks that millions of new cars will pose, how should the companies and the country handle this? Isn’t there a better way?

Submitted By: Kyle Tripp

I recently watch a clip on YouTube about the unveiling of the world’s cheapest car. An Indian company named TATA makes it. The car goes for about $2500 USD. The goal behind this car is to appeal to India’s middle class citizens and families who as of now can only afford a motorcycle. This car has raised controversy with environmentalists, who say that this will just increase pollution and add to the crowding of India’s overcrowded streets. I can see where it would benefit lower to middle class families, but will this car just be bad news for the environment? In the clip it showed people in India on motorcycles with their little kids and no helmets. With the craziness of the streets in India that can’t be safe. While this new car is as cheap as they get TATA says that it meets or exceeds all safety and emission standards. I feel that this car will be better for the safety of the lower to middle class families that currently get around on a motorcycle. Though, is the safety of the environment in India currently a more important issue? Look at the clip and let me know what you think.

Submitted By: Naomi Guy

The air is hot, sticky, and dirty. Your throat becomes itchy and a bad taste arises. What do you do? Well, in China you better not spit. Renmin University in China has created a Civic Index to measure the “civility” of their cities and gauge progress as the Olympics draw near. The index analyzes behaviors such as spitting, littering, and line forming from over a quarter million observations and surveys. According to this article, Beijing has been decreasing this behavior, but not as drastically as required before the Olympics. In 2007, Beijing scored 73.4 points, up from 69.06 in 2006 and 65.21 in 2005, but not up to the 80 point target. Changes were brought about using both positive and negative reinforcements ranging from flowers to fines. An example of an interesting (yet somewhat derogatory) program is one to promote the peaceful forming of lines. On the 11th of each month (standing for 1 after 1), uniformed officials swarm upon bus stops and subway stations waving flags at everyone to ensure they line up. The program was created by Zhang Huiguang, director of Beijing’s Capital Ethics Development Office. She is now better known as “Ms. Manners”, and claims that changing these bad habits before the Olympics is “crucial in providing a cultural and historical legacy to China and the world as a whole”.

So what’s the big deal? It seems obvious that any country would want to look as good as possible for the hundreds of thousands of tourists expected for the Olympics. Well, we all remember back a few short years ago when SARS was a major health threat. During that time, officials tried to stop spitting in public to help stop the spread of the disease. Sadly, more effort has been directed into putting on a clean image for the Olympics than protecting the health of the country, and the world, just three short years ago (article). A fairly drastic change in behavior has occurred in the past year to create a new image, three years ago, when lives were at stake, it was hardly a difference.

So why is this? Did the government not care as much about health, or were people too stubborn to believe the threat of SARS? Is an external image more important than internal wellbeing? Would you expect this behavior to be true outside of China? Do you agree with Ms. Manners that these changes are crucial to providing a legacy?

I’d like to leave you with this statement by, Zhang Faqiang, vice chairman of the China Olympic Committee, “Ultimately, China’s modernization rests on the quality of its citizens.” Do manners truly make a quality citizen? and can that lead to modernization? I’ve know some key American inventors with little to zero etiquette…

In another life I had buddies who always said, “Baby, if you look good you play good.” These guys spent more time primping their battle gear and hair than my daughter, but, they were right … they looked good, they in turn felt more confident, and they in turn played good.

Some of you have asked me about buying a suit in China because you want to look good. Below is an email excerpt from a trip alumni. We can talk more about this at one of our Spring meetings, if you wish. But for now, what are your business take-aways from the below? E.g., a number of your are taking negotiations now, but that is far from the only class the below ties into. (Please, please, please don’t say something silly and ethnocentric based on a sample size of one such as, “This just shows the Chinese are ruthless, cunning, dishonest and you can’t trust ‘em.” — the below, or something like it, also happens in the West, Asia, South America, Africa, etc. about a gizillion times a day.)

And sorry, Ladies, I don’t know of a good tailor in China who does ladies clothes. You are on your own.

>Chris,

Sorry about getting back to you. It was a very long week at work.

When XXXX and I went to the Pearl Street Market (I believe that is what it was called, it was on the business cards you handed out), we were accosted by sales people trying to sell us suits (this was on the bottom level of that giant indoor market). We began by looking at fabrics, all the while making sure to point out that suits were way too expensive for poor students to afford, and especially on our last day in China. The saleswoman (who I assume works for the fabric maker, and not the tailor) started at over $1,000 US. We laughed and she pointed out that these were custom made suits composed of very expensive Cashmere. She also pointed out that she had sold 3 suits for the same low price already that day.

XXXX and I balked and began looking at her competing neighbor’s line up. She came over and got us and cut her price in half. XXXX began to get more interested, but I being very frugal still had my reservations. Eventually XXXX and she agreed upon a price of about 1000 RMB’s for a suit. He gave her half as a downpayment and then began walking around contemplating a second suit.

Meanwhile, she went to work on selling me. Finally, we settled on 800 RMB, conditioned on the fact that I lie to XXX and tell him that I paid the same as he had. It was about 4 in the afternoon, I gave her 200 HK Dollars as downpayment, they took our measurements, and then we went on our way.

Then at midnight, a man who spoke very good English showed up at our hotel room. He had our suits ready, and we tried them on for the final fitting before he finished the hemming. He was pretty young, about our age and very professional about his business. I paid him about $20 American Dollars, and the rest in $HK (I didnt even have to exchange the money). He left and told us our suits would be ready when we woke up in the morning.

I have no idea if they make shirts or not, but i would assume so.

He was in the hotel room for maybe only 15 or 20 minutes, since he had done all of the work at his shop. His turn around time was from 4Pm to 7AM the next morning. So half that for one suit.

I dont know if he was the tailor the whole time or if he was just an assistant who did final measurements. I would have to look around and try to find my receipt somewhere to get his contact info. I know YYYY knows who he is because she said her dad buys suits from him, and pays about what XXXX paid.

I would think that he would be able to handle 15 suits at once, he is supposedly very popular in China. The Flight Attendant in America recognized my suit. I am not sure if he would just contract out to another shop though.

The best thing about it those is that apparently he keeps your measurements, so apparently if I ever find my receipt, I can email in an order.

Let me know if i can be any more help.

ZZZZ

Yeah, Baby. You look good, you play good.

Kudos to current Cal Poly Orfalea College of Business MBA student Steve Rodger for putting this YouTube piece together on last year’s China MBA trip. Click HERE to view. Good work, Steve and thanks for taking the time to do pull this together. Steve, aka Martin Scorsese, please remember us when you are rich and famous. One of the stamps of legitimacy in today’s world seems to be having a YouTube presence, so perhaps we are now “official.”

On another completely different YouTube note, on occasion I have been called a “panda licker” or “panda hugger,” usually by someone in Internet-blog land who can’t stand it when people see a silver lining on any geopolitical cloud. I don’t know that I hug or lick pandas (real ones or nation state pandas), but I do have an admitted soft spot in my heart for pandas who sneeze, baby pandas and any panda slammin’ down a bottle of warm milk. Click HERE and HERE and HERE to see why. By the way, pandas are found in Sichuan, the province that Xiaodan comes from, one of your MS in Tax student colleagues (we won’t get to Sichuan; too far out of the way from what we have scheduled this year).

Submitted By: Jeff Mohr

[Prof. Carr Note: This post by Jeff, and the below by Shasta (be sure to see her post below after this one) raise some common issues, so I load and post both of them at the same time.]

Creativity.

Failure.

More and more these two words are defining success for thousands of garage engineers turned BlackBerry addicts. Millions of educated and hard-working graduates flow out of school systems in India and China, some of which will be tomorrow’s business leaders—in our country. How does creativity happen? Is it spanked into you at birth? Or rather developed throughout the rigorous curriculum applied in the school system? And what about failure? How do some cultures come to accept failures, while others try to avoid them like the plague?

These are important questions to ask. Globalization is inevitable and many are struggling to maintain some kind of competitive advantage—in schools, for jobs, between companies. I believe strong creative ability and an ability to deal with failure are some of the most important aspects in being successful in today’s highly competitive world. Trying to be an entrepreneur? You have to expect failure—of your entire idea, part of your business, an aspect of your personal life. What about applying for a competitive job? There will certainly be road bumps along the way. If you let one “thank you but no” get you down, you won’t ever find the job you started looking for in the first place. In my own job search I had my fair share of “no”. If I let these so called failures prevent me from trying even harder, I never would have gotten my job that I set my sights on to begin with.

Ytivitaerc. This may be even more important—at least the factor that sets apart repeat failures from those working toward success. But the important question is how we instill these traits in ourselves, our children, and our country. What factors make India able to be so creative in IT? What edge will China be able to gain through their school system? Will Silicon Valley ever be matched?

My first task for you is to watch Sir Ken Robinson at his TED talk (trust me—it deals directly with this topic and he has the best delivery I have seen in a long time). Comment about what changes you think should be made to the school systems or culture of your country—then continue below.

India. From what we have heard it is one of the most diverse places in the world. I can’t wait to see it. I have pulled together a combination of articles on creativity in business, school and social circles.

Creativity and Innovation Driving Business – The Innovation Index

A Creative Laughter Club in Pune, India

Creative Attempts at Justifying Creativity in the Regular School Curriculum

The idea of Rasa from the third article rang true as what creativity truly is. This quote especially…

“Rasa is beyond religion, culture, language, and economic status, rasa teaches one to experience the meanings of the words ‘love’, or ‘compassion’, ‘justice’ – all human concepts that need to be lived, not mimed or manipulated. Should not our children learn to access this energy buried deep inside that would help them to grow into healthy, happy, well balanced individuals, supporting them in a world that is increasingly cruel, intolerant and filled with conflict?”

How true and how powerful if we can find a way for children to grow up with these values instilled in them. Again comment as you see fit on these three articles.

CHINA. This manufacturing powerhouse has been known more for its social justice than for creativity in recent years. As Harry Shum described, “A Chinese journalist once asked me, ‘…what is the difference between China and the U.S.?…’ I joked, ‘… the difference between China high-tech and American high-tech is only three months - if you don’t count creativity.’”

This is all changing. The article below gives an excellent account of what new strategies businesses in China are using and how the world’s view of China as being mere copycats is unwarranted. Click here.

Take a look at this Adidas for both a sense of the pride behind the Olympics and the creativity in marketing.

And finally, the new CCTV building.

Creativity is obviously alive and well in both China and India. Under the criteria listed above, the only separating factor left is the perception of failure. At a speech at Cal Poly, Ashok Bardhan described that one of the advantages the US culture holds is its acceptance of failure. This is one of the elements in the “perfect storm” that permits an area like Silicon Valley to thrive. But as India and China both continue to produce greater numbers of entrepreneurs, I doubt how long this advantage will remain ours.

Submitted By: Shasta Palmer

Education is a hot topic amongst the nations. Who has the best, who will become the best, and where should parents send their children? The article Losing an Edge, Japanese Envy India’s Schools states that the Japanese are worried about their educational system, and are trying to put their children in Indian schools. The idea is that Indian schools teach the children more at a younger age.

Japan sees India as an emerging country to, “Beat in a more benign rivalry over education”. Tokyo, which has the two largest Indian schools, is receiving large quantities of inquiries from Japanese parents about admitting their children. According to the article, “Japan once turned out students who consistently ranked top of international tests, but that is no longer the case.” This just goes to show that things can change quickly. Just because a nation is the best at one point, doesn’t mean it will always be the best. This is something we should consider with the schools in the United States.

The article Study: Foreign Students Added to the Economy states that 14.5 billion came from international students home countries to fund tuition housing etc in 2006. Overall, the students spent 20 billion dollars here in the U.S. (including the 14.5 billion from their own countries). Indian and Chinese students account for a quarter of all 2006 international enrollments; however, Japanese students declined by 9%. Americans can brag about having the “best” school system, but how long will it last? Far more money is being put into the military than into our education system, yet these systems seem to been one the things we do well here in the U.S.

Lastly, something I have noticed reading these articles, and watching the blog video The William Jefferson Clinton Science & Technology Center, is the attitude of students abroad vs. here in the U.S. The video mentioned above shows Indian children who want to go to school. They feel lucky to be in school and are willing to try hard. They see it as a privilege, but here in the U.S. I think this is taken for granted. How many college students do you know that are in school because they want to be? I’ve met a lot who are there because they think they have to be, not because they want to be. True, most students agree college will benefit them, but the same privileged outlook doesn’t seem to be as predominate here in the U.S. as overseas.

These articles bring up interesting questions.

Who is the new leader in education?
Who will be the next leader, and why?

Submitted By: Jesse Bilsten

Ignore the fact that there are 1,321,851,888 Chinese and only 301,139,947 of us and come up with some sort of average and according to the trade deficit with China an average American owes an average Chinese $4,000. Add that to the $30,000 that we owe in our share of the national debt and each of us owes at least $34,000 to the global community we’re borrowing against after we get out of college. Of course that was back when I was putting together this article and over the weeks of reading more articles we’re now somewhere around $79,000 that each tax payer owes. Plus we’re getting back another $600 in tax refunds. Of which we’d think would come from a tax surplus. We’d be wrong. The rebate will be another $150 billion that we’ll be borrowing from other countries. The largest of which is China.

Whether we like it or not we’re economically linked with China. So much so that they can’t pull their money out of our economy without taking more losses than they incur by leaving it in. Yet the dollar continues to lose value and the global community is abandoning it as fast as a sinking ship.

Is there anything we can do as young entrepreneur’s and business people to fix this problem? What are our responsibilities? As Americans? As business people? Are any options ethical? Maybe we only deal in Euros? Saudi Arabi, China, South Korea, Venezuela, etc. are all thinking along these lines. Iran recently requested that it’s shipments to Japan be traded for yen instead of dollars.

For those of you staying in India to travel when the course ends, click HERE to read the nice coverage the WSJ had this weekend on travel in northeast India. A good mix of tourism, travel, business, marketing, etc.   Get your checkbook out.  The rich in India are generally richer than the rich in China, and the poor in India are generally poorer than the poor in China.  The shadows of this article touches on this difference.

I am also half-way through the book that just came out which I recommended several weeks ago … Billions of Entrepreneurs — How China and India Are Changing Their Futures, and Yours. It is really an outstanding book. By the juxtaposition between India and China this Harvard Biz School profs presents, you will move to a deeper level of knowledge and understanding about these two countries and their economies. This is an even better book, in my view, than the Elephant and the Dragon book I list in your syllabus. It is not an easy book to read — you really have to concentrate and read it carefully — but the quality of information presented makes it well worth the slog. Your spring quarter book review?

Submitted By:  D.J. Parsons

I found this CNN article and thought it fit in nicely with the topic of human rights in China. As we all know, China will be hosting the 2008 Olympics, but as we may not have know people have high expectations in the outcome of letting the Chinese government host these games. The International Olympic Committee (IOC) stated that they felt the games would lead to positive change in China, but many activist groups are saying no change has occurred.

Some say that the police and secret police will be guarding known dissidents to make sure that they do not converse with any western reporters. In addition, some say that labor rights have worsened over the last few years.

Han Dongfang, a Hong Kong –based labor rights activists says that change will need to come from within the country and that international pressure will not create change. He stated, “The Chinese leadership does not care about international pressure. It is not China who is knocking at the door of the international community looking for favors — it is the other way around.”

Although many may see the Olympics as a possible changing point for China some believe that China sees it as an opportunity to gain prestige and a stronger grip on its citizens.

China scholar Willy Wo Lap Lam said, “The Chinese Communist Party sees the Games as an opportunity to show the world China’s great achievements in the economy and infrastructure and to demonstrate their diplomatic clout. Internally, the Games will help the Party foster ‘internal cohesiveness’ using national pride to justify the Party’s ruling status. No Chinese Communist Party leader wants to use the Games as a juncture to push forward reforms.”

I found this article very interesting and loved the quote made by Han Dongfang, because he is right — why would the Chinese government care about international pressure when most other countries are going to them asking for favors? China probably feels that they are on their way to the top and once there, they will not need the help of outsiders. I also found the differing interests of the Chinese government and outsiders in the Olympics captivating. I would imagine that the main goal of China is to showcase their achievements to the world and to use it as a symbol to show they have made it onto the world radar as a power.

Should China only desire to be seen as a country with a flourishing economy and infrastructure? Do they purposely not make changes in human rights to maintain power and control and to boast an economy dependent on cheap labor and cheap manufacturing? If China improved labor rights the cost of labor would increase and their products would be more expensive, this could cost them business. They also may feel that if they gave more freedoms to the people they may desire a different form of government and thus launch them into another rebellion. Right now China has no desire to change things that could potentially hinder their rise to power.

The article states that China is clamping down on people they do not want to talk to make China look better. It makes me wonder what these people could possibly say to make China look worse than they do by shutting them up.

Should the Olympics hold a political and social agenda? The IOC says no, but then continues to say that the Olympics are expected to create lasting and positive change in China. That seems like an agenda to me. I feel the Olympics do hold political and social agendas. They represent the gathering of the world at one event and show us parts of the world most of us will never see. Through these interactions people learn of other cultures, other struggles, and other problems. In turn, they learn of changes that are needed or wanted in other parts of the world and gain support for causes.

Submitted By: Frank Wallace

During the great session last week with Dr. Ashok Bardhan, something was mentioned that caused me to think of an interesting question. I wondered what Bardhan’s thoughts were on whether or not he felt the rising economic power in India and China would cause a rise in the two countries military power, and if so, would that pose a possible threat to the United States and other countries? Since I never asked my question, I ended up looking on the internet for some answers. While doing so, I came across an interesting article from FPIF called Using India to Keep China at Bay. See also this webpage for another in depth look at the China, US, and India relations.

In August 2007, India and the US reached a bilateral agreement on civilian nuclear cooperation. Proponents of the agreement argue it will bring India closer to the US at a time when the two countries are forging a strategic relationship to pursue their common interests in fighting terrorism, spreading democracy, and preventing the domination of Asia by any single power. But some critics in the US say the deal fundamentally reverses half a century of US nonproliferation efforts and potentially contributes to a nuclear arms race in Asia.

This arms race could occur for two different reasons. One reason is because of the history between China and India. Experts worry US nuclear aid to India could foster a dangerous nuclear rivalry between India and China. Though India has a strong interest in building economic relations with China, New Delhi is still wary of China’s military rise in the region. Plus, India and China did fight a brief war in 1962. The second reason surrounds relationships with Pakistan. Since 9/11, Pakistan has been a strong ally with the United States, but they have not received a similar deal on nuclear energy from the US. Some experts say this apparent US favoritism toward India could increase the nuclear rivalry between the two competitive nations, and potentially raise tensions in the already dangerous region.

With this background information, I put forward this question to you:

Do you think that this agreement might cause more harm than good in the world? Could it make China become a possible threat now or in the future to the United States or the rest of the world? And if so, what can be done about it?