[This post was submitted last year by trip and program alumni Angie Dip in connection with the 2008 trip. This issue has been in the news again recently so I am re-running her submitted post.]

“Customer service. Technical support. Administrative and accounting processes. So many services are being outsourced to India. Let?s add another one to the list: pregnancy, or rent-a-womb.

Check out this article from ABC News regarding the cheaper service of surrogate mothers offered overseas in India.

In the United States, the cost of the services of surrogate mothers, which include the in-vitro fertilization to home health care costs from the time of pregnancy to when the baby is delivered, is about $60,000. In India, however, the price is much lower ? just about $6,000 for a successful in-vitro fertilization process.

Some women use this service because they either have medical complications that prevent them from being able to give birth, or, according to a new trend, they want to be mothers but do not want to put their careers on hold for the pregnancy.

The process seems mutually beneficial to everyone. The doctors involved gets paid for their services, the couple who wants the baby gets what they want, and the surrogate mothers get a paycheck that is equal to about ten years? worth of work to take care of their family. Although by supporting the outsourcing of pregnancy, everyone involved would be in a win-win situation, taking advantage of and exploiting the impoverished women in India is depressing to me. But, I understand that this is a great money-making opportunity for these women. Nevertheless, this ?business,? also called reproductive tourism, is thriving in India, bringing in over $400 million a year.

India is a top choice for surrogates because of its low cost, its excellent medical treatment, and its availability of surrogate mothers and English-speaking doctors. In addition, there is little regulation right now in India on this business. (Eventually, there should be stricter rules to prevent women from being abused.) The women usually sign a contract agreeing to hand over the baby to the potential parents. In the United States, on the other hand, some states may allow a surrogate to stake her claim to parental rights during a short period after giving birth.

What other outsourcing opportunities will they come up with next?

Questions to consider:

How do you feel about India outsourcing pregnancy? As a future businessperson, do you think it is okay as long as it?s a win-win situation for everyone involved? Or do you think it is unethical?

If you do not agree, think about the women who are not able to bear children because of medical complications. What if you, like Tracy Thornton from the article, were put in their position? Wouldn?t you want a service like this provided to you?

Do you think China will make a similar approach (to gain more business and compete with India)?

For more on the outsourcing of pregnancy in India, check out these related articles:

Womb for Rent: Surrogate Mothers in India

Outsourcing a Womb”

Prof. Carr addendum:

Good post.

In asking the question, “Is this ethical or unethical?”, avoid the natural reflex to shoot from the hip and pull out the easy and broad statement of “why, yes!” or “why, no!” and instead dig deeper and apply one or more of the commonly studied ethical theories that philosophers have given us to try to sort out these things — Natural Law, Utilitarianism, and Legal Positivisim.

Does an analysis under each yield the same, or different conclusions?

And re: the people discussed in the article, which theory are they using, intentionally or subconsciously, to explain, justify or feel comfortable with their decisions?

And can you think of other people, companies, politicians, governments, religious leaders, and even your classmates and professors, etc. who sometimes ‘flip-flop’ and cherry pick the ethical theory that gets them to the result they want or justify their argument and position?

One example for practice analysis:

“Iraq is a just war and noble cause because our Judeo Christian God says all people deserve liberty and a democracy” is a common natural law justification where one could say, “Of course, this activity is right (code for ethical and moral).”

A utilitarian ethicist and/or disciple would look at Iraq and says, “What? You are nuts. That activity is wrong (code for unethical and immoral) because the costs of being there far outweigh the benefits.”

A legal positivism theorist focuses on the stated law as the baseline for determining what is right (ethical and moral). He/she could go either way on this issue, depending on the law at issue and its interpretation. For example, some believe Bush et al., have violated significant American and international laws re: the Iraq thing. Others argue and interpret said laws were minor or if significant interpret them the other way and conclude said laws were not violated.

What are the weak spots of each theory?

Which theory do you use and consistently adhere to in your everyday personal and professional life? Are you ever guilty of flip flopping to get to the result you really want?

Please keep the above in mind as you analyze any issue you see in China and India that disturbs you because you have not been exposed to it in the US.

And stay tuned. More to come on the ethics issue in a subsequent post …

Professor Carr addendum: Click HERE to check out this piece that came out in the NY Times on this subject. Some interesting comments on this Times‘ blog post. See also this recent Newsweek article that highlights the risks of adoption and how said joy can turn into an (honest) parent’s worst nightmare.

Check out this Wall Street Journal article on McDonald’s Strategy in China. It’s a hoot to read. Who would have thought beef could be sooo “sexy”?  Yaaaah Baaabby!

On a serious note, I will try to get you into a KFC, Pizza Hut or McDonalds or two while were are in China or India. This article does a great job laying out some of the differences you will see there in such stores, and why, and how to localize these types of multinational products for an emerging market.

For example, after reading this article, you should better understand why you see chicken (and fish) everywhere in China (and dog in Canton, now Guangzhou), and not as much beef (too expensive for most folks).

Your thoughts?

David Wolf, China hand who lives in Beijing, and who is also UC Davis grad and author of the always thoughtful Silicon Hutong blog, made a nice post on what President elect Obama means for the US-China relationship and most importantly, he provides some suggestions for how the Obama administration might effectively engage China.

Click HERE to check it out. Your thoughts? Do said suggestions fall in line with, or against, Zakaria’s Post American World book? I invite you to click on his blog and make a comment, ask a question, as David is a first class guy and I am sure he would welcome your comments and/or questions on his blog.

And what are your thoughts for how the business community (i.e., YOU) should engage China, given our new president? See, e.g., the US-China Business Council web site (click HERE). And what about India, in light of the Mumbai attacks? And are the needs, goals and desires of the US business community in line with the geopolitical needs of the broader USA stakeholder community and audience? How yes and how no? And if no/not, then what is your firm and/or industry strategy to get those others to come around to your view of where we should go?

Professor Carr addendum: Here is a nice relevent post by MBA student David McKinnon on the fellow that President Obama just appointed to serve as the new US Ambassador to China, Jon Huntsman.  David’s post is titled, You Are Expected to Address Them as ‘Your Excellency’.

Submitted by: David Caldwell

It seems as if a firestorm of coverage has erupted from India in the past few days: headlines like “Indian Official: Terrorists Wanted to Kill 5,000” and “India Ends Mumbai Rampage After 60 hours, 195 Dead” seem to bring the visceral carnage straight into our living rooms and onto our coffee tables from 13 time zones away. Since the development and distribution of modern satellite and fiber-optic communications matured in the 90’s, information has been pouring back and forth in ever increasing volumes over our tiny blue planet as quickly as relativistic speed limits have allowed. With this ever increasing capacity, we’ve begun to push entire industries abroad to take advantage of lower costs and greater production capabilities. Indeed, even our military has started pushing GPS and communications technologies into the forefront of its offensive and defensive capabilities - replacing battalions of troops and stockpiles of nuclear warheads as its primary deterrent.

On the flip side of this coin has been the quick and cheap dissemination of communications tools to more unscrupulous characters. It came as a shock to Indian commandos that the terrorists involved in this week’s attack were found to be using “Blackberries to Monitor the World’s Response to Their Actions“. According to CNN, “the gunmen were as brazen as they were well trained, using sophisticated weapons, GPS technology and mobile and satellite phones to communicate….they were constantly in touch with a foreign country.” It goes without saying then that access to cheap, ubiquitous communications technology can come as mixed blessing.

Update: Apparently Twitter has gained some popularity in India, and it was used extensively by the people present at the event: Mumbai: Twitter’s Moment

Submitted By: Andrea Muntzel

Thanksgiving came around with an event that none of us could possibly give thanks for? a terrorist attack in Mumbai. I’m sure I wasn’t alone in fending off worried family members’ and friends’ comments about the dangers of India. I’m also sure I wasn’t the only one that felt fearful and concerned for our upcoming trip to the city.

In the days that followed the attacks, a deluge of articles, videos, and interviews filled the newspapers and news channels. If you haven’t heard much about the attack itself, I suggest reading this Wall Street Journal article, entitled India Security Faulted as Survivors Tell of Terror (also see the interactive graphic). Since this article was written, there has been a back-and-forth between Pakistan and India, talks about the effects this attack will have on the economy, and a theory that links China to the grenades used in the attacks (a completely different blog post in itself). Writing this post, I am overwhelmed by the opportunity to spark insightful discussions on a number of diverse topics relating to India’s horrific attack. I will write about my own perceptions and experiences; feel free to write about yours.

On Thanksgiving morning, after learning about these acts of terrorism, my first reaction (surprise) was not very surprising. After reading Zakaria’s The Post-American World, I have felt very confident about going to India. A country that can relate to the United States and that has strong ties to the United States would surely be a safe place for Americans, right? I’m not sure. After my family finished our Thanksgiving meal, I found myself in an unusual position: arguing in favor of India. Talking politics at the dinner table is a social faux pas that I try to avoid. This time, however, I was in the heat after sparking the debate with my response to my aunt’s question, “You aren’t going to Mumbai when you go to India, are you?!” As I gently explained my knowledge obtained through Zakaria, I realized that a lot of the distrust my family had for India was rooted in ignorance and fear; my uncle’s line of work has seen a lot of jobs going overseas to India, and my aunt thinks that Indians don’t like Americans. After researching the subject, I also discovered how limited the information I had about India was. I was unaware that India has been the target of 12 terrorist attacks since 2005 (see WSJ article, Murder in Mumbai). The fact that the country is pro-American does not mean that it is America, complete with the largest defense budget in the world. In fact, this attack has revealed huge weaknesses in India’s infrastructure and government.

These comments have brought up several points relating to the attacks in Mumbai. First, of course, is whether India is a safe place for us to visit this summer. I find myself conflicted in this issue. I initially thought that chances are there wouldn’t be two terrorist attacks in the same place within such a tight time period. After learning about India’s history, however, I admit to being a little more nervous. Being American in a city that has been the target of terrorism towards Americans is a little disconcerting.

The second issue is India’s slow reaction to the attacks. In light of this subject, I thought it was only fitting to include Fareed Zakaria’s discussion of this incident from a Newsweek article entitled This Fire Needs to be Put Out. In the article, Zakaria discusses India’s weaknesses in an honest and insightful way. He talks again about the need for reform at the governmental level while also touching on political, social, and foreign issues. A correlation must be made between the fact that India is a democracy yet is “plagued by weak coalition governments, patronage and corruption, with little emphasis on professionalism and competence.”

Overall, it will be interesting to see how India reacts over the next couple of weeks. Zakaria predicts that these attacks will have the same uniting result that 9/11 had on Americans. He writes: “while Indians have many troubles, they have one great counterterrorism policy - resilience. The Mumbai stock exchange reopened last Friday and closed higher. The country will persevere, the city will bounce back, and all those who have reasons to go there should not be deterred.”

Hopefully, neither shall we.

Some of you have inquired about what you can do to learn some Mandarin before we leave and/or possible resources out there that you might check out. Please see the below excerpt in a recent email I received from one of our grads that took a proactive approach to this trip and experience, and hence scored a job out of it:

“Hi Chris,

Things are going really well for both Matt and I. We have both been working hard at work and are starting to get a good understanding of whats going on at our company. The management and co-workers seem to really enjoy us being here. I know that a lot of the girls/guys we work with have improved their English just from conversations with them and listening the Matt and I talk. We also teach and English class one a week to some of our co-workers.

I have started listening to a Pod Cast called ChinesePod.com. It is meant for foreigners to help them learn Mandarin. But they also talk a lot about the culture. It does a very good job at describing situations that students will encounter while in China and how they should react, plus with the added benefit of what they might hear people say to them. I think it would be very beneficial for the students going on the trip this year to listen to a couple of episodes, not only to learn some mandarin but the learn more about how to interact with locals while they are here. Listen to a couple of episodes and let me know what you think.

…. You should add in there the best way to get the pod casts is to get itunes, then go to the itunes store and type in a search for ChinesePod. They will be able to download all the new and old episodes. If anyone has every down loaded a Pod cast before it is very easy to do. I would recommend that they download all the past free episodes and listen to them. There is only a couple of hours worth and they will learn a lot.”

FYI: click HERE to check out Matt’s China experience blog.

Submitted by: Eric White

A recent WSJ article ‘China Defends Price Fixing by Vitamin Makers’ discusses a case ‘recently cleared for trial’ whose result will have significant meaning to antitrust practices in international trade, namely China. In this specific case, the four Chinese vitamin manufacturers do not dispute that they acted together to set artificially high prices. They are, however, arguing that they did not break the law and China?s Ministry of Commerce is willing to back the price-fixing efforts of these companies. Apparently, China’s defense is based on a loophole of international law known as the doctrine of sovereign immunity. That is, ‘If a government orders a company to take a specific action, it generally is considered an act of state that can’t be prosecuted in foreign courts’.

After enacting domestic antitrust laws for the first time this year that restrict monopolistic practices including price fixing, one must wonder about the message China is trying to send. China is clearly acting in its own self-interest - trying to get the best of both worlds by establishing a market economy at home while ignoring those rules abroad.

After years of undercutting their competitors and gaining substantial market share, these vitamin companies, along with many other Chinese companies manufacturing everything from drugs to sweeteners to steelmaking materials collude to set artificially high prices. Could this be the international business strategy of China? Though most would consider it to be unethical, I have to admit that it is clever and it is working.

If this is China’s international business strategy, what does that mean to global consumers? Will they be forced to pay high prices? What does this mean to global manufacturers? If international antitrust rules don’t apply to China, how can they compete?

Submitted by: Patrick Johansing

The US Navy, Air Force and Coast Guard recently performed a search and rescue exercise with Hong Kong’s search and rescue team. Hong Kong’s government invited the American forces for the exercise. In The Post-American World, Zakaria noted China’s diplomatic efforts to build friendships. Their invitation of American forces shows that they are trying to foster trust between the nations; it is a powerful gesture.

One Coast Guard man was quoted as saying “We wear different uniforms but we’re ultimately the same.” This stuck out to me because he could be referring to the Chinese men or to the other American forces. I view this as a hopeful indication that many Americans are beginning to view China as a friend rather than a rival. I believe this is especially meaningful because it came from an American in uniform.

Here is the article if anyone wants to interpret it differently.