I assume, or sure hope, that everyone with even a remote interest in business and the global world at large has been loosely monitoring the recent WWF pissing match between the Chinese CCP government and US firm Google. 

See/read the below January 30, 2010 Wall Street Journal article on this topic (be sure to click on the “Comments” link at the top of the article and peruse some of the comments that were posted in response to this article):

Battling the Information Barbarians: China Often Views the Ideas of Foreigners, from Missionaries in the 17th Century to 21st-Century Internet Entrepreneurs, as Subversive Imports.  The Tumultuous History Behind the Clash with Google.

Ring a bell from your admission essay question when you applied to the program?  

Were you aware of this historical tension between China and the West?

See also/read this nice blog post from David Wolf of the always insightful Silicon Hutong blog, based in Beijing, Why Global Internet Companies Fail in China and his really, really good Ad Age article cited therein, The Internet Does Not Rise Above Nations and Cultures.

Books will be written on this dispute and much dust still needs to settle before any sane writer takes on this subject and starts to write these chapters, but what are your early thoughts on this dispute for now?  Did Google to the right thing?  Did it take the right approach?  Why did it do what it did?  How do you predict this will all end?

- Professor Carr

Not really.  But a title like this always grabs the reader’s attention.  Worked on you, didn’t it?

American’s can be pretty naive, overly trusting and even downright lazy in their due diligence when doing business in an emerging market like China and India and in addressing some of the commercial/corporate espionage risks involved.

See/read this China Law Blog post, China: Do The Walls Have Ears? See also this Times of India article, Corporate Espionage: India Inc. Means Business and this Asia Times article, India’s Growing Corporate Spy Threat.

Your thoughts?

Did you know and appreciate how big of a deal corporate espionage has become not only in China and India but right here at home/in the West?   See, e.g., this recent Wall Street Journal article on this very topic, Hugger-Mugger in the Executive Suite.   Don’t think this stuff does not happen here/in the US.  It does.  All the time.  In my other life as a practicing attorney, I worked on several civil cases that involved commercial dumpster diving allegations.  At times I felt that I was in an Austin Powers movie.  Yeeeeaahhh  Baaabbbyyyy!

– Professor Carr

And to see him come at this from a bit different angle, also/listen to Kaiser’s presentation at TEDx Honolulu.  Click HERE.

Check out this video presentation (click HERE) of Kaiser Kuo at my undergrad alma mater, the University of Nebraska - Lincoln.  An excellent, excellent piece, and well worth the investment of your time.   It is a 1 hour and 18 minute broadcast (includes Q&A).  His talk is titled, Shouting Across the Chasm: Chinese and American Netizens Clash in Cyberspace.

FYI, Kaiser is a UC Berkeley grad and two years ago he spoke to our MBAs during our trip to China.  Below is a more beefy bio for Kaiser.  

Your thoughts and takeaways from his talk?

Kaiser Kuo:  Born in the U. S. to Chinese parents, Kuo lives in China and identifies equally as American and Chinese. Formerly director of digital strategy for the Beijing office of a global advertising agency, Kuo has worked as a technology and business writer for publications such as Time, TimeAsia, China Economic Review, Asia Inc., and the South China Morning Post, and currently serves as an advisor for Youku.com, a leading video sharing company in China. Kuo co-founded China’s most famous rock band, Tang Dynasty, and continues to be active in the Chinese music scene.

I recently finished James Fallows terrific book,  Postcards From Tomorrow Square: Reports From China. Can’t recommend it enough.  It will be required reading for our next China trip.

I also just came across his most recent article in The Atlantic, How I Survived China.  Also a great read.  

Regardless of whether one agrees with what Fallow’s sees and/or concludes, the guy can flat out write, and I have to utmost respect for those who can do so.

I don’t know the answer to this question.  

For me, it depends on the day you ask me, and, the product, issue and/or industry in question.  This BBC podcast (click HERE) I just listened to is one of the more thoughtful and balanced pieces I have come across on the subject.  

For those of you who have been to the PRC, what say you on this topic and after listening to this podcast?

Check out this impressive 3.5 minute video by photojournalist Dan Chung (click HERE) who covered China’s 60th Anniversary National Day parade with a mix of time-lapse and slow motion.  This was much more enjoyable for me to watch than the (pretty) boring CCTV snippets I have seen.  A h/t to the Imagethief blog for the heads up on this video.

This birthday bash, and the Beijing Olympics, have convinced me that the Chinese are finally “getting” (note I did not say “mastering”) this thing in business and politics called …. marketing.  

E.g., a woman’s military brigade wearing white gogo boots and berets with pinkish thigh cut skirts, AND while carrying sub-machine-guns?  This part was right out of an Austin Powers movie.  No peasant suit wearing people waiving Little Red books here!

Your thoughts?

Side note:  a few folks have emailed me asking to post some thoughts on China’s 60th birthday bash. Sorry to disappoint.  I have nothing original to add on this topic, and I can only link you to a cool video.

Every time I travel to China I am asked the following by Chinese parents I meet, “As you are an educator what advice do you have for us to get our kid into a good  US private high school or boarding school and/or university?” (Emphasis mine.)  

This is a complex question, to which there are no easy answers, mainly because every student’s file and situation really is different.  The problems of American education at all levels notwithstanding (and I concede there are many), most that know education well and have actually spent meaningful time in classrooms around the world observing what is taking place still see the US as the Swiss watch of brands in the education industry.  Hence, the intense desire I see in mainland China to get their kid over here/to the US for an education.

So one of the first things I tell them is, “Start to prepare well in advance, and by the way how is your kid’s TOEFL or IELTS scores and their SSAT or ISEE scores (if applying for a private high school or a boarding school) and SAT scores (if applying for university?”  

Usually the answer is, “Not so good.”  

These entrance exams are significant admission hurdles for kids from China to overcome (including understanding that YOU, the kid, are supposed to write your own essay - not your parent, uncle, the education agent your family hired), even for the little emperors/ess from the rich families with good opportunities and resources.  

The Chinese know this, and I have just learned that one of the things they (including a group of profs from Tsinghau U) have done to make an end-run around this challenge is what I call the “Lenovo solution”.  To wit, if you don’t want to take the time to build a brand, buy one, or in the case of education, buy the US school.  

Click HERE and HERE to read more about this development.  In short, the Chinese have purchased an old Verizon training campus (mainly a hotel) in Massachusetts and plan to it into a one year boarding school program (focusing mainly on ESL and culture adaptation for 60 to 100 students year) that will in turn feed the student into UMass under what I assume is an MOU between the Chinese and UMass.

UMass is in turn, I suspect, salivating over the out-of-state tuition (high!) most of these students will pay when they shift over to UMass given the especially sorry state of the Massachusetts economy right now.

Hey, desperate times call for desperate measures, and only time will tell if this experiment will result in a win for the families, kids, the boarding school, AND UMass.  

In my view, private US high schools, boarding schools and universities would be wise to closely monitor this development, as if this experiment is successful and more Chinese and/or other countries and universities follow this model, said change will result in some new winners and losers.

Oh, and my own advice to the wealthy Chinese parents asking me about the above option in Massachusetts?  

I would tell them the following:  ”Look, if your kid has some decent talent and work ethic, do this the right way … believe in yourself and earn it … and that means you timely apply to a regular quality private high school or boarding school in the US where they will get the initial support they need to succeed and pointed in the right direction (yes, you will have to pay for it and it won’t be cheap but you own factories and businesses and have lots more money than I ever will so no sympathy here!).  And let them go and start them in the 9th grade, not the 11th.  If you do this I am fully confident your kid has a very bright future in front of him/her and that he/she will in turn get into an excellent US university (in part because in doing 9th through the 12th grade in the US their English skills and college TOEFL scores will be excellent).  And the way, there are 2,000 to 3,000 universities in the US, not 10, and hundreds and hundreds of them, maybe more, are quite good.  Please pick the one that is a good fit for your kid and will engage his/her mind, which means your family will have to do your homework, work hard to learn about those differences and I recommend he/she visit the campus.  Just because it’s an Ivy (one of the 10 you and your neighbors told you about) does not mean your kid should go there, will like it there, will succeed there, and/or that they will actually learn anything there.  I beg you to stop listening to the bad and misinformed advice of your friends, neighbors, the Internet and/or the hack educational agent you hired for your kid that takes commissions from poor quality Western schools and ‘guaranteed’ you a Harvard admission yet said agent has never even been to the US, and who don’t know jack about education in the USA, and instead listen to those who know US education and how kids learn here and what it takes for them to succeed.”

We have returned to the USA!

Six cities, over 16 firms, several universities, and numerous cultural excursions in 18 days.

Below you can read about Days 1-17 of our journey. Overall the firm visits this year were excellent.

I view the trip and course as a success, but I define “success” differently than perhaps most would.

First, let me note that this was an excellent group. Collectively, the “got it”. I appreciated their effort, maturity and professionalism on the trip, including their willingness to put self aside for the greater interests of the group.  They collectively worked hard, bucked up when travel bumps appeared, they rolled up their sleeves and were proactive in their learning and the questions they asked. This group was much more active than past groups in practicing some of the simple things of business like the exchange of business cards, networking, and starting to cultivate relationships with people they met abroad. This was great to witness, as it was one of the learning goals for the course.  Collectively, they were outstanding ambassadors for our country, college and university.  I am very proud of them and their efforts.  In many instances, because of the professional way they conducted themselves, they changed the perceptions of Chinese and Indians about Americans in a positive, productive way.  I felt honored to witness such an exchange and it made me feel optimistic about the future.

Some students found they really liked China and/or India. Some discovered they did not. Some students came to see China mainly as the factory of the world; others concluded it’s a market and/or both. I think many came to realize that with respect to India, nice roads and trains do not necessarily make a country — it is the people that make a country. As an example, during their off-the-clock free time, a number of the students went to a nice night club and witnessed Hindi, Punjabi and English music and songs being seamlessly played and connected, as the crowd danced with delight. For me, this is a true symbol and metaphor of India and its strength — the Indians adapt and are self sufficient, lack of infrastructure and all, and they make it happen and succeed, and all while not making a big deal out of their success. We just don’t see this happening as much, in my view, in the West.

Some of the innovators in our student group spotted tremendous business opportunities amidst the chaos of China and India; while some of the traditionalists in the group seemed flustered, stressed and/or intimidated by the chaos one finds in China and India. This trip was a great testing ground for for both subsets.

Sometimes students found that on a trip like this the plane or bus is on time and comfortable; other times not. Some tolerated the food and some even liked it (particularly in India!). Some discovered they could thrive in the difficult physical circumstances that China and India and international business presents; others found that mountain hard to climb.

There is no doubt that throughout this trip we saw ample anecdotal evidence to support Fareed Zakaria’s hypothesis and argument in his excellent, thoughtful, and recently published best selling book, The Post American World; to wit, that it’s not that the USA is in decline so everybody needs to sit back down and stop stressing out about that myth; it’s just that other countries like China and India are on their way up and we need to learn how to deal with it and partner with them.

The health of most held up, but some did become physically ill due to a cold, fever or the food.  I was very thankful nobody was quarantined as we entered mainland China.

All seemed to develop a deeper understanding and appreciation of the sacrifices that overseas employees and their families make when a firm sends them to make headway into a new market and the unique business opportunities that can be found for a forward leaning business thinker in a place like China and India in relation to the West.

We caught a break with the weather in China - it was not as hot as usual and the pollution was not nearly as bad as usual in Beijing. In India, it was fairly hot and humid, and it pushed each of us. We were also lucky in that in Bombay (Mumbai) it did not rain that much, even though it was/is monsoon season there.

The students also picked up several best business practices from the Chinese and Indians that they can bring back with them to the West (e.g., in China and India, the guest, client, etc. are king and attention to them matters; in India, they even have a saying relating to this point - “the guest in your house is a god”). They also caught a good glimpse of the type of people they need to hire who they can send and who can thrive in the markets of China and India, particularly if/when they conclude getting on said plane ride is not for them.

Most students appeared to be humbled and impressed by China and India and their people and talent; while some may return home skeptical; and a very small minority might even return home with a mistaken Western ethnocentric belief they are somehow smarter, better looking/prettier, or superior to the average Chinese or Indian national or manager who speaks broken English (and man, oh man, is this latter minority in for a wake up call someday).  All seemed to reach a deeper understanding of why China and India and the US need to work together to solve future geopolitical, business, societal and environmental problems. Should we elect to not partner with these countries and their peoples to solve the challenges of today and tomorrow, we do so at our peril.

Some students saw China and/or India as needing the USA for some time; while others concluded that China and/or India will in time throw down its crutches of needing the US, begin to walk on its own and in time run and be true contenders on the world stage, possibly even surpassing the US in the economic and geopolitical spotlight. Others described what they found in China, a communist country, as being full of pure, raw, unfettered capitalism at its best (and sometimes its worst); while others saw more of a mixture of a system made up of government monopolies that protects certain players and industries. Comparing “communist” China with hyper-democracy India was an outstanding learning experience. Most seemed to develop an appreciation that whether one likes China and/or India or not, an educated MBA and MS in Industrial Technology needs to better understand how they fit into the global value and supply chain.

In other words, everybody who made the effort had the opportunity to test their talents, beliefs, values, biases, egos and professionalism in some way, shape or form, and the trip was a microcosm of the real world that no textbook, case study or professor in a classroom can teach.

Most of the above are also some of the very types of issues, questions and items we had hoped students would grapple and struggle with when we started to plan this trip a year ago, and I do not believe for a minute that one can teach these types of lessons sitting and staying within the confines of comfortable Cal Poly and San Luis Obispo, California or even the United States for that matter.

I also encourage the readers of this blog to check out the reflective post-trip journal entries that I require each student to make, as over the next few weeks they will load that document onto their personal trip blogs you can/will find on the right hand column of this blog. Good managers and leaders take time to reflect on what they have learned, where they have been, and where they are going. Click and read away as their post trip reflections come in. Having said that, I have learned on this trip that the true power of their learning experience will likely not fully hit them for another year, maybe two or three.

These 32 Orfalea College of Business graduate students were provided with an on-the-ground opportunity to see, ask questions, experience and witness first hand some of the pros and cons of: (1) China — the world’s biggest start-up and turnaround; and (2) India — the tiger struggling to break free from its leash and at the same time finding that it is the very leash holding the proverbial tiger back.

We also had the opportunity to develop a deeper understanding of what globalization is all about and some of the challenges that will face the business firms and governments of tomorrow. Each of us was able to confirm and test some of our preconceived notions about business, capitalism, communism, China, hyper-democratic India, and themselves, and debunk others. These students should also now have the ability to understand and analyze, at a sophisticated and nuanced level, the next front page article they read about China and India and business that appears in the Wall Street Journal, Financial Times, New York Times, Business Week, The Economist, et al. and be able to understand why it’s a front page story and be able to separate fact from global legend and urban lore. This ability to do so will set these students apart from the average American and businessperson, and even most of our politicians, who blather on and on about China or India when they know nothing about it, they have never even been there to see these places for themselves, and/or they could not find said places on the map if their lives depended on it.

Of course, how, when and whether this group of future business leaders leverage the knowledge and experience gained through this trip during the next phase of their lives is up to them. At the Cal Poly Orfalea College of Business, I can represent we have done our best in this regard. I am confident they will make the best of it. This is a talented group of young men and women. They give me great hope for the future.

A big, big shout out and thank you to all who helped us on this trip. THANK YOU! Again, our firm visits this year were top notch and incredibly engaging.

As for me, I am bone tired and jet lagged. But a nice thing about this trip for me is that I always feel a deeper love for home — meaning the USA, SLO and my house and family — each time I return.  Traveling abroad for such a long period of time also, as the saying goes, “helps me remember who I sometimes forget to be”, and I am thankful for such a crash review and reminder course.  The next few weeks I plan to get away from work and spend time with my family. I also plan to take a break from China and India and blogging for the next month and I don’t plan to make many (possibly any!) posts during that time.

Until then, thanks again to this wonderful group of 32 students.  They made us proud at Cal Poly.  And they were a lot of fun to travel with.

Team Six:

Our second day in Beijing was just as culturally packed as the first. Students found themselves with free time to discover this beautiful city and the enriching experiences it offers. Some students became explorers, hiking to the top of a garden to overlook the Forbidden City and the Beijing that surrounds it; others became master Chinese chefs, donning aprons and taking part in some friendly cooking competition; still, others tested their negotiation skills at the infamous Silk Market, searching for the best deals and developing their “no joking price.” We had an incredible day, but what appeared a day of tourism and fun, was actually a day of good old fashioned Cal Poly “learn by doing.”

While some of us chose to sleep through our alarms, others began the trek to nearby Tiananmen Square. Not only is the square a stunning piece of history, it is also a popular tourist location. The square teemed with individuals, stretching to see Mao’s grave and snapping pictures to record they were there.

Those who chose to rest up and those who chose to go to Tiananmen met together a bit later in the hotel lobby. After everyone had gathered for a story about how the Chinese had gone to the Russians for help with preserving Chairman Mao’s body, we started our first official group outing of the day with a walk to the Forbidden City (otherwise known as the Winter Palace). On the walk, it was easier to observe the architecture of the city: built in rings, Beijing’s ancient features are interlaced with modern buildings and lifestyles, contrasting with each other and revealing the beauty of both. We saw shops bustling with renovations and business next to houses with the laundry pinned up outside of the window. At the same time, people rode their bicycles and motor scooters alongside each other outside the Party buildings. During the walk, we also learned that Beijing does not have a center—or downtown—like other cities we may recognize; rather, Beijing has tall buildings dispersed throughout the city with numerous smaller “centers” surrounding them.

As we approached the Forbidden City, we saw numerous trees and flowers, decorating the landscape with pinks, purples, and deep greens. There was also a small man-made water reservoir down the middle of the path, glistening as the sun struck its surface. While only a few visitors and vendors scattered about the outside path, the inner gates were amassed with people milling about the stone courtyard. Purveyors sold lime popsicles and drumsticks, postcards and guidebooks, chopsticks and cold water to the crowds to keep them occupied, entertained, and cool on this slightly warm day. Hot and crowded, this queue of traders and tourists was a sharp and deceitful contrast to the peaceful serenity of the outdoors.

Once we entered, our group scattered to find what interested them most. Some gathered around paintings on scrolls, others journeyed to the great halls, some snapped pictures of the towers, while others sat on a bench to observe their surroundings. The paintings on scrolls included scenes or stories from the ancient Chinese Dynasties, painted with ink onto silk or regular paper. The great halls were unfortunately only viewed from extremely crowded windows, but the windows revealed a snapshot of the time when this palace flourished. The sheer numbers of visiting people were incredible; as a sharp departure from our experiences in the temples of India, there were American and European tourists in addition to Asian visitors. For locals, the palace is a popular visit – it seemed that there were seas of people all wearing the same colored hats. In fact, one of our native Chinese students remarked that going to the Forbidden City for her is like going to an Albertson’s market in the U.S.A.

After the Forbidden City, we were confronted by peddlers from every direction asking us to buy dragon figurines, water bottles, and fake Rolexes. We were free to do as we pleased from here, so some students went back to the hotel, some checked out the nearby hill park, and some went by taxi to the famous Silk Market. The cabbies right outside of the Forbidden City seemed to identify us as tourists and wanted 180 RMB to take us to our destination, but we kept looking around to find a good deal. The taxi ended up being cheaper than the rickshaws—man-powered or motor by about 15 RMB, it also held twice as many people, and it probably got to the destination faster; although riding in a rickshaw is an experience that should done at least one time.

The Silk Market is an indoor retail venue that leases space to vendors (apparently at a very high cost). It has multiple floors, including a tailor shop on the third floor. Similar merchandise can be purchased at multiple shops within the Silk Market, and bargaining is essential. Therefore, the key is to realize that an item can be found somewhere else easily (possibly cheaper), determine where the dealer’s price points are, and then try your luck at another. Many men in our group purchased tailored-to-fit suits that were made of good quality material, all at a reasonable price. Many women were not left in the cold—they could be found bargaining for silk scarves, silver bangles, pearl necklaces, crystal earrings, and a plethora of clothing items. The copyright and trademark problems of China are rampant in the Silk Market, though they don’t seem to be enforced by anyone. There are Nike workout clothes, Dolce coats, Tommy Hilfiger dress shirts, and Abercrombie T-Shirts. The guys that bought suits joked about how one of the choices they had to make was whether they wanted an Armani or Hugo Boss label sewed onto the inside of their coat. While it may seem that shopping for knock-off souvenirs doesn’t come with a valuable business lesson, this is far from the truth: actually, we can learn a lot from these Chinese business men and women. One thing learned in negotiations class in the winter is to cultivate your Best Alternative to Negotiated Agreement (BATNA), and to determine your counterpart’s, as well. This way you know when to walk away and you know how low your partner will go before walking away. Often, we were asked what our “no joking price” was. This was an attempt to determine our BATNA. We also practiced the art of highballing and lowballing price points. A good rule of thumb is to never buy anything unless it is less than 20% of the asking price. By starting low, you can concede and your opponent can concede, eventually ending up somewhere in the middle (though here, much closer to the bottom). It is our opinion, if one can handle the harsh merchants of the Silk Market, then many business negotiations will be a breeze.

After we finished our shopping, we came back to the hotel in taxis and shared stories about our bargaining prowess and beautiful accoutrements with our classmates. About twenty of us signed up for the China Hutong experience and needed to meet the group in the hotel lobby later that afternoon to leave for the next adventure. We piled four to a taxi and made our way. Two of the taxis got lost, so a few of our group mates had the pleasure of having an adventure before the actual Hutong adventure even began. Hutong is translated to mean “narrow alley” and refers to a grouping of alleys that host businesses and residential homes. Many Hutongs are threatened with demolition since they represent the “old China” rather than the age of modernity; in fact, the Hutong we visited is the last one protected by the government. In addition, the government is helping to fund the Hutongs’ up-keep, which may be why cameras are posted throughout—to help prevent their investment from being vandalized.

The Hutong experience began with a tea workshop where our host led us through the history of tea and its benefits while his partner served us several samples of tea: white, oolong, green, and lychee-infused green tea. It was interesting to learn that tea should only be steeped for a few seconds rather than minutes in order to evenly distribute the tea flavor and reduce the bitterness. Also, they reused the same tea leaves many times in order to extract different flavors from the leaves; it was a far cry from the Lipton Tea bags we were used to having back in the states.

Next, our hosts sent us in groups of two on a scavenger hunt. We were given a compass, and 5 RMB, and our task was to experience the village firsthand by shopping for produce and baked goods in different ‘wet’ markets, speaking with restaurant personnel and locals, and experiencing the village setup. Larger than we expected, the Hutong alleys led to more alleys which lead to gates with houses inside. When we finished our hunt, we were invited to enjoy one of our items on the list—a sweet and delicious sesame-seed bun filled with red bean paste.

Our food expedition then went on to having different members prepare different parts of our dinner. Some of the items were prepared for us to save time. The dinner menu included: salad, grilled lotus root and potatoes, three dumpling varieties, two spring roll varieties, quiche, garlic bread, barbequed meat on skewers, and of course dessert—peach crumble and apple cake topped with crushed espresso beans. Preparation was filled with laughter, fumbles, and good team work. Enjoying the meal together that we each helped prepare was a great way to end the Hutong experience with fellowship and fun.

The experience at the Hutong was about more than just enjoying good company with good friends, it was about getting familiar with the culture and practices of the area that you are operating in. It was about learning to adapt to new and unfamiliar circumstances, and still having the courage to do your best to come out on top. After the event, we all achieved a new found appreciation for the kinds of medical benefits Westerners and Easterners take from tea and exercise, and it gave us a better idea about why people here act the way they do. It was a very welcome respite from the extremely stressful (though practical and enjoyable) event at the Silk Market. There is no doubt that the students that had the opportunity to experience both events will endeavor to see them both again in the future.