Submitted By: Erik Kvilhaug

With all this talk about the quality of Chinese products increasing at an enormous rate, I figured a good look at Chinese automobiles would be fun. Not much thought has been given to Chinese automobiles in the last few years as they have not be available on any kind of scale on US soil. There is not a single company importing these vehicles, might there be a reason?

Please watch the video before continuing……

Just a thought, but the drivers head is not suppose to go through the airbag and be stopped by the crushing force of the vehicles dashboard. This is not an ultra high speed test either, this was a replication of a 40mph crash into a soft object, such as another car. In all fairness that is not the first car company slated for importation into the US market. Auto-mogul Malcolm Bricklin (“credited” with importing the YUGO) has struck a deal with Chery Automobile Co. to bring 250,000 Chinese cars to market in the US. These cars have also had some crash tests performed in Europe, I will let you be the judge of how they did compared to the BS6 above.

Please watch the video before Continuing……

Oops the airbag went off after the driver was crushed by the steering wheel being pushed though the driver’s seat. This might be a cheaper way to get more cars into containers ships to make the journey from China to the US. Run them into a wall at 40mph and you can double space efficiency.

In all seriousness these cars are junk, so far Chery can not even properly steal a cars design from Chevrolet/Daewoo of Malaysia. These cars also failed crash test miserably, even compared to the sub compact produced by Daewoo for GM. Pictures of the difference between the two cars can be seen here, an eye openers, I would not want to be the driver’s right leg.

So I ask, would you drive these cars to save a couple thousand dollars? Another ten thousand dollars in debt seems to be worth being alive. I can only imagine that if these cars were allowed to be sold without crash testing, people would be lining up to get their next/first new car. It might just be time to invest in crash guards and steel bumpers for my truck. If the crash test are this bad, what are the rest of cars components like?

Submitted By: Matt Fencl

Ladies and Gentlemen, with Obama and Clinton still in a neck and neck race for the democratic nomination, I feel there is no better time to discuss their respective policies toward the emerging economic giant, China. Those of you who know me are no doubt perplexed about my choice of topics. After all, I’m one of the few card-carrying Republicans in the Cal Poly MBA program. Wouldn’t it make more sense for me to contrast McCain’s foreign policies to those of a democratic candidate? Well, not necessarily. I’m an opinionated individual and composing an unbiased article comparing the respective Republican and Democratic positions on China would be nearly impossible. However, I have no preference for either Obama or Clinton; disliking them equally makes me completely impartial. Therefore, here’s you chance to hear their positions with no slant added…a rare opportunity in today’s journalism. If you don’t trust me, you’re more than welcome to read Clinton, Obama Ramp Up Their Rhetoric Against China. Hopefully I’ll spark some much needed discussion and help widen the spread in the race for the democratic nomination.

The first thing you’ll notice in comparing the platforms of Obama and Clinton are that there are not any shocking differences between the two. However, on the issue of free trade, some subtle distinctions can be seen.

Both Obama and Clinton contend that the World Trade Organization and the North American Free Trade Agreement have hurt the U.S. by eliminating manufacturing jobs traditionally performed by the middle class. The irony, and a political liability for Hillary, is that her husband was the president that signed the NAFTA pact back in 1993. Earlier this year in Wisconson, where manufacturing jobs are continually being lost, seven out of ten people blame these job losses on free trade agreements like NAFTA. The attitude toward free trade is darkening elsewhere in the United States as the U.S. economy continues to falter. Over 58% of Americans now believe that free trade is hurting the U.S. economy while only 28% of Americans believe it is beneficial. Clearly both Democrats feel an increasing urgency to capture the votes of these disgruntled Americans.

Whether or not free trade is actually hurting the U.S. economy is an entirely different question. There are a variety of different opinions on this, but I’m only concerned here with the fact that most Americans perceive free trade as negatively influencing the economy.

An emerging pattern begins to develop if you look at Clinton and Obama’s solution to this problem. Hillary believes that the solution is pressuring change on China. Notice the absence of domestic policy proposals in this excerpt from one of her speeches:

“Today, China is most obviously the world’s largest and one of its fastest growing economies. It’s become a global superpower that needs to be convinced to play by the rules in the global marketplace. Here again, the Bush administration has failed. One third of our trade deficit is with China and over the course of the last seven years Bush policies have has allowed the Chinese government to become our banker. Today, China’s steel comes here and our jobs go there. We play by the rules and they manipulate their currency. We get tainted fish and lead-laced toys and poisoned pet food in return. That will change when I am in the White House because I know we have got to take a consistent approach towards China.

I’ve co-sponsored legislation to compel the Administration to take aggressive steps to stop China from manipulating its currency, to make our goods look more expensive. I’m the original co-sponsor of the Foreign Debt Ceiling Act which really means that we would require any administration to begin reversing our trade deficit and start breaking our reliance on China for not only what they provide to us in terms of the way they buy our dollars and buy our debt but also to be held to higher standards for what they import into our market.”

Correct me if I’m wrong, but I read this as a solution grounded in changing how China operates in the world economy. I get the impression that Clinton wants China to “play by the rules,” and that pressuring them to do so will help the United States. Contrast this with a quote from Obama below:

“We’ve got a tax code that is encouraging flight of jobs and outsourcing. And that’s why we’ve specifically recommended … that Congress change our tax code so that we stop giving tax breaks to companies that are moving to Mexico and China and other places, and start putting those tax breaks into companies that are investing here in the United States.”

It has a slightly different vibe to it, agree? Obama talks about changes that need to be made in our domestic policy rather than changes China needs to make. I think this is an interesting distinction between Obama and Clinton that should be weighted in the democratic nomination.

[Note from Prof. Carr -- I titled this post.  Matt, if you submitted a different title, let me know and I will change it -- my student assistant is out this week.]

Thanks to Jessee Dundon for these video leads.

Harvard Business School professor and author of Billions of Entrepreneurs: How China and India Are Changing Their Futures - and Yours, Tarun Khanna, is featured in these very informative short videos on China and India.

Comparing Development in China and India

Entrepreneurship Is Social Entrepreneurship

Government and Entrepreneurship: The Evolution of Entrepreneurship in China

Social Entrepreneurship in Medical Care

His book is outstanding, by the way.  Check it out.

Submitted by: Billy Jencks

What does it mean to be human? This is the question, ironically, which plagues the existence of Sun Wukong, the Monkey King.

Sun Wukong, or Monkey, is a fictional character of the Buddhist, Taoist, and Confucian philosophies, which can be traced back as far as written Chinese philosophy. Monkey’s adventures raise many ethical questions about the relationship of power to accomplishment and the relationships between people, and have been used repeatedly in Chinese culture, from TV shows and cartoons to children’s books. Chinese children grow up learning the stories of Monkey much as American children grow up with Aesop’s Fables, learning moral lessons and being introduced to concepts like life, death, and how to deal with difficult situations in life.

This episode on YouTube with English subtitles depicts Monkey being “born of stone” and acquiring his title as the Monkey King by jumping through a waterfall. It also shows his first experiences trying to be human (in the Taoist sense) by having to find food.

So how important is being in tune with cultural anecdotes like Monkey for a business person in China? Well, as an American, do you even know where babies come from? If you said the Stork you are dead wrong. If you were a baby in China you were “born of stone,” silly! This is what Chinese parents often tell inquisitive youngsters. After watching this video you can start to understand why.

As we learned in Jay’s presentation on international consumer packaging, cultural nuances (or semantic mix-ups) can have a HUGE impact on marketing campaigns and other important aspects of international business. Attention to these cultural differences can make or break your success as a business person in another country.

* What do you think of the Monkey episode?
* How does this compare to your childhood experience with cartoons and “storybook learning?”
* What other impacts could this widely used story have on different sectors of the business world in Eastern countries?

Submitted By: Chris White

It seems that, in recent years, there has been an overwhelming amount of global publicity surrounding sustainability and the environment. The exposure has been especially dramatic in the United States as Americans struggle to cope with dramatically increasing energy costs and gasoline prices, issues most of us have never really been forced to consider before. So while cities like New York and Chicago are flexing their muscles by implementing creative ways to curb energy consumption, two unlikely cities in China and India (countries not normally considered environmentally conscious) are also making great strides. Please see the article Nine Cities Nine Ideas, in the February 11, 2008 edition of the Wall Street Journal.

For most cities the motivation for curbing energy use is twofold: reduce greenhouse gas emissions that are believed to cause global warming and decrease energy costs. But for Beijing the incentives are much greater. As the host city to this summer’s Olympics games, its image and the appearance of the country as a whole, will be on display to the entire world. To many outsiders, Beijing (and China in general) is known more for its congestion and terrible pollution, than any other aspects. China is hoping that this summer’s Olympic Games can erase these stereotypes and notify the world that it is serious about becoming a global economic power. In addition, the country is banking on the Olympics to provide positive exposure to help lure foreign businesses. In order to improve the country’s image to the world, Beijing has been working very hard to “clean-up” the city before the Olympics. The city has removed or relocated outdated cement kilns, coal mines, and chemical plants in order to cut energy consumption within the city. The greatest challenge, however, for the city has been the move to relocate Shougang Group’s steelworks which currently sits about 11 miles from Tiananmen Square. Production is being wound down for the Olympics and operation is scheduled to cease in 2010 in order to relocate to a more efficient facility more than 100 miles away. The old infrastructure will remain open as a tourist attraction and a sign of the city’s push toward energy efficiency. So while I applaud China’s efforts to reduce their energy consumption, it seems that this push is more of a means of marketing their country instead of really taking a stand on curbing pollution.

What will happen after the Olympics when the world is no longer looking? Will China’s energy push diminish? Is this just a temporary show? And does simply relocating many factories outside the city really solve the overall problem?

The article also mentions another city in Asia, though much less well known than Beijing, that is making headlines for its strives to reduce energy consumption. Thane, India, a suburb of Mumbai, has dedicated itself to becoming the country’s leader in renewable energy efforts in order to cope with the increased energy demands of the booming economy. Since 2003, the city has implemented the use of solar water heaters on all municipal buildings. And in 2005, the city made it mandatory for builders to fit all new buildings with solar water heaters. In addition, the city’s administration has encouraged its residents to install solar water heaters on their existing homes by offering a 10% discount on property tax every year. The move has been estimated to save enough energy to power more than 5,000 homes. If this little known suburb outside of Mumbai, India is able to make these small, yet dramatic changes, why can’t municipalities in the U.S. do the same?

Also keep the following facts from Robyn Meredith’s The Elephant and the Dragon: The Rise of India and China and What it Means for All of Us in mind while considering the above achievements. All but two of the world’s twenty most polluted cities are in India or China. Half of India’s and two-thirds of China’s energy needs are derived from coal. Pollution issues cost China an estimated $54 billion a year and 200 Chinese cities currently fail to meet World Health Organization standards for airborne particulates. These countries have a long way to go before they can be considered environmentally friendly, but the small strides mentioned above are also big steps for two countries that are trying to awaken from the constraints of closed economies.

Submitted By: Amy Linker

We have all heard of the one-child policy that was enacted in China in 1979 by Deng Xiaoping. This policy has caused many problems for the Chinese people. One such problem is discussed in the post, Little Emperors (see April 26, 2007). Another problem is discussed in length in CBS’s 60 Minutes Report: China: Too Many Men.

This article and news report states that there are 120 boys born for every 100 girls. This imbalance has come about due to a mass number of abortions of female fetuses (over 8 million in the first 20 years of this laws enactment). The abortion issue became such an problem that finding out the sex of your unborn child through an ultrasound became illegal. This problem stems from an age old tradition of sons taking care of their parents when they get too old to care for themselves. This, male dominance in the family, and the expectation of a large dowry from a bride, has made sons more valuable than daughters.

Oddly enough, with a surplus of over 40 million bachelors, the tables have turned. Baby girls are now more valuable, although the Chinese still have it engrained in their minds that boys are more desirable. Families want their sons to marry, as women have a pacifying effect on testosterone ridden males. Such a gender imbalance causes an increase in male lead violent crimes and activities that China has seen since the law was enacted. Only men that are well off have ease finding a bride these days in China.

Many other problems have arisen with this newfound desire for girls, such as girls being sold off for marriage, kidnapping, and sexual slavery. Poor folks from the country side are easily persuaded to sell their baby girls for food or money.

“The Chinese government confiscated a large plastic bag full of 28 girl babies, ranging in age from 2 to 5 months,” said Hudson.

The baby girls, whose photos were posted on the Internet, were found stuffed together in plastic bags lashed onto the roof rack of a cross-country bus. Family members had sold them to traffickers for as little as $8 apiece.

For more information on this problem check out the article: Babies in Tote Bags Lead to Gangs Arrest

This gender imbalance does not exist solely in China. There is also a similar imbalance in India. The reasons for such an imbalance in India are very much the same. Boys are valued more than girls. Although, India does not have a one-child policy, this problem still persists due to aborted female fetuses. For more on India’s gender imbalance see the articles, India: Abortion of Female Fetuses Leads to Gender Imbalance and, For India’s Daughters, A Dark Birth Day.

I could not imagine such a gender discrepancy in the United States. Although, our MBA program and most other MBA programs in addition to the professional work environment has a similar gender imbalance. I wonder if this is an implication that we too value men more than women, even though it is too a much smaller degree. Will the value of gender ever balance out and if so, how will it change business and the work environment, since these currently are male dominated areas?

Some additional questions to think about:

China has been taking measures to change the problems that have occurred from the one-child policy (they have not yet reversed the policy itself), such as trying to up the value of daughters by making annual payments to families with a girl, and subsidizing school costs for female students. These initiatives are helping to a very small degree. What do you think could be done to solve the problems that stem from the one-child policy?

What do you think may be some future implications, besides a rise in violent crime, on Chinese society from this gender imbalance?

Do you think this will affect the economy or business in China further down the road?

What effects will this have on an already male dominated business society?

Will the Chinese military pose more of a threat with an increasing number of expendable lives as more men, who are not able to marry and start a family, join the military?

Submitted By: Andrew Steen

Recently, Chinese parents prefer girls to boys. For centuries, Chinese families have preferred male children because they can work on the farms, and earn more than females (and not transfer it to their husbands). But with the amount of empty nesters in China rising, urban couples are becoming less in need of income, and more in need of companionship.

Since 1979, most Chinese couples have been limited to only one child. And with the parent’s entire resources and attention showered upon a single child, the youth become more educated, but at the same time more self-oriented. This results in more Chinese young adults moving out of the country in search of jobs, while leaving their parents alone with the empty nest. In China, the children are supposed to care for their parents as they get old, but the recent Newsweek article, China’s New Empty Nest , states that “forty-two percent of Chinese families in 2005 consisted of an old couple living alone, according to the National Bureau of Statistics.” And since it’s still considered shameful to live in a nursing home, urban parents are beginning to prefer a loyal girl, to a boy who will leave them in search of riches.

This increase in parental abandonment has led some lonely couples to place classified ads seeking new daughters. The Zhendong family was “lonely and lost,” so they wrote an ad titled, “Elderly couple desperately seeking daughter.” But they clarified that they don’t want a maid, just someone to hang out with and keep them company. Another couple, Wu Shaoqui and his wife, began “adopting” daughters in 2006, and now they have three who visit them on weekends and holidays to play cards, chit-chat, and have a good time. Sounds like a great arrangement, but what are the social implications of the shift away from the century old social security system based on filial piety?

China is already experiencing a surge of national programs that promote respect for the elderly. So does this mean that a few years of capitalism, and its opportunities to gain wealth abroad, is enough for Chinese sons and daughters to disregard thousands of years of tradition an honor? The world already views America as an indulgent country with few non-material values. Is China headed in this direction? If so, is it because of capitalism, or globalization, or education, or media, or something else? Or do young adults still honor their parents, but in a modern way?

The Olympics are closing in. As I predicted some time ago on this blog, human rights stories and arguments, posturing on both sides, violent protests in Western China, etc., are starting to take place and heat up . This includes protests in “that place” (hereinafter referred to as “__” as I want to stay online in China).

Has The Great Unraveling in China begun, as some have predicted would come? If so I would be surprised, but time will tell.

I have followed the __ issue somewhat over the years, read a fair bit about it, and candidly, I am still undecided as to where “truth” in this mess lies and dispute?

For example:

Pro-Separation and recent WSJ and NY Times articles and YouTube segment on recent protests and clashes on T:

• China Terrorizes __

• __ and the Olympics

• Activists Take Stand in Torch Relay’s Path

• __ and China: A History of Conflict

• Unrest in __ Puts Tourism on Hold

• Monks Protest Outside Labrang Monestery

Anti-Separation and recent YouTube video, “__ Was, Is, and Always Will Be a Part of China”

Both sets of materials are thought provoking, both sets of materials contain some elements of fact, both sets also contain pieces of propaganda, and both pieces draw conclusions that have merit and others that are not based on credible, unbiased facts to support their position. In other words, both sets of materials are pretty normal “__ for Dummies” pieces. Whichever side you may support, I hope you dig deeper.

One of the better pieces I have read that helped me try to get up to speed on the __ issue, to the extent a non-Chinese or non-__ person even can, was a chapter in John Bryant Starr’s book, Understanding China: A Guide To China’s Economy, History and Political Culture. You might check it out for your Spring book review. It’s one of the books on your book review list. It may also help you better understand the position of both sides to this debate. In my view its a reasonably balanced book.

Then, once/if you are 100 percent sure where truth in this __ mess and dispute lies, and, you are able to back it up with historically verified and uniformly accepted facts (not conclusions), please send me your piece and I look forward to reading it.   Until then, I will continue to have to heed Mark Twain’s advice.

By the way, think back to Dr. Morris’ very good lecture on Chinese history Fall quarter. You will recall that he talked about a number of facets of China we are now seeing come to life through the __ debate and protests. Whether you realize it, at this point in time if you have rolled up your sleeves, jumped in, and done the work and heavy lifting in this course thus far, you really do now know more than 90 (perhaps 99?) percent of America when it comes to China, just by having spent a some time each quarter trying to get your hands and head around the different faces of the place.

I welcome your thoughts, but note that on this post I reserve the write to edit and in an extreme case even delete your comments, if needed, in a way so as to maximize the likelihood that this blog stays online in China during these controversial times. I do not want to lose readership of this blog and comments on this blog in China, and even the emails I get from readers in China, as they have much to offer our course and learning experience.  So please choose your words carefully.  Thanks.

Submitted By: Simone Michel

South China was once known as the world’s factory floor. Plants used to spring up like mushrooms and seas of workers would wait in front of the gates in hope of being the lucky one to get a job. Lately, this picture has started to change. Many of the big gates remain closed due to rising costs and shifts in Chinese government policy, knocking hundreds of smaller factories out of business. Some of the factories that are still in Guangdong province, watching how their profit margins disappear, are considering moving to lower-cost countries such as Vietnam. According to this 1,000 shoe factories closed in 2007.

Many reasons come together: Companies are losing money because of the rising value of China’s currency, making it more expensive compared to the US Dollar. Furthermore, raw material prices ballooned and not the full percentage of this price increase could be passed on to customers. Tax shields for foreign companies were abolished. Inflation returned to China last year as well, letting cost of labor rise faster than productivity. As a rule of thumb, foreign managers in Shanghai have to raise wages by 10 percent every year, otherwise their employees give notice.

But rising cost is not the only reason factories have gone bankrupt. On one hand, workers can now find more jobs elsewhere than ever before and South China is experiencing a labor shortage. Furthermore, the workers that can be found are unskilled. On the other hand, China’s government is making it harder on these factories. After encouraging cheap manufacturing for more than a decade, the regime wants to push investment toward high-tech. The goal is to have more sophisticated factories with higher-wage jobs. China is following Japan and Taiwan, countries who have both started out at the low-end and climbed up the manufacturing ladder to the high-tech end.

Furthermore, the government changed labor policies at the beginning of this year. Chinese workers are starting to get aware of the working conditions and are now demanding higher wages, overtime pay and improved safety. The second broadcast of NPR’s China series highlights nicely how the new law is requiring businesses to give workers written contracts and pay compensation if they’re fired.

With more and more workers pressing their rights against their employers, a supplier’s market of labor and rising costs, the factories are forced to come up with new ideas. Do you think the factories in Guangdong province have to shut down because of all these external influences or do you think it’s their own responsibility because the concept of lean production has never played a role in China’s past?

Submitted By: Brandi Eng-Rohrbach

America has long enjoyed not only the exportation of its products and ideals but also its culture. In most other countries, American TV shows and movies are wildly popular. This has only been exacerbated by the internet and the ability to get these shows without waiting. This has created a world entertainment culture based on the American entertainment machine. American TV shows, music, and movies are the only global currency for entertainment. They are so sought out that you can find the latest American movies pirated on the streets of Beijing the day after they come out in the states. They are so sought out that you can hear the latest American Top 40 song blaring in the nightclubs of Mumbai. This is obsession is odd considering many other countries have a variety of shows, music, and movies popular within their country. Yet these indigenous entertainers generally receive little fanfare outside of their own borders.

Yet this has begun to change. We have seen in more recent years the remaking of many foreign movies with American actors. This is particularly true with Asian films in the horror genre. I wonder if soon this will happen with Indian which has its own wildly popular movie machine, Bollywood. Bollywood is the Indian cinema machine. In 2002, it had already surpassed Hollywood in the amount of movie tickets sold. See this chart for a comparison. India has the lion’s share of the world’s teenagers. As the country becomes more and more a country of consumers, will Bollywood gain more world presence? Some people believe so. Could the entertainment industry be changed like the manufacturing industry has? Will we begin to start importing more of Chinese and Indian culture and not just their products? Will our entertainment industry try to enter these markets with products specifically tailored towards these new consumers?

See this article in Business Week for more of a background on Bollywood.

For a taste of Bollywood watch this video of a song from the Bollywood blockbuster Devdas.