Submitted By: Dena Malloy

Take a look at this Wall Street Journal article and this New York Times article.

Recently in the news, there has been a firestorm of recalls of Chinese made goods. One of the companies that was forced to make a recall was Mattel. The company has recalled approximately 18 million toys in total. About 3 million of these toys were recalled due to lead paint. Lead paint is certainly not good for the health of a child, but no harm has actually been proven to have occurred. The other toys contain small magnets that pose a hazard to children that swallow more than one of them. When the child swallows the magnets at longer intervals (20min – 1 hr), the magnets can attach to each other inside the child’s intestine and become stuck, perforating the intestine. One child died in 2005 and several have required surgery to remove the magnets. Almost all of these toys were made China, but the magnet problem is a design flaw.

Was Mattel trying to throw China under the bus? The design issue with the magnets is not new. Why recall now along with the toys containing lead paint? Did they finally have a way of making someone else seem responsible? Did they get busted and have to apologize or are they strategically apologizing just to keep on the good side of their biggest supplier? Are they now going to be sued because they have admitted to a design flaw causing harm?

I personally think that Mattel was hoping consumers would blame the magnet problem on China and I think that overall it has worked. I’m sure many of you knew that Mattel recalled a large amount of Chinese made toys, but I bet fewer numbers knew that the majority of the recall was due to a design flaw. The later apology was probably planned the whole time knowing that the recall would make headlines, but the apology would barely be noticed. The Chinese government has a right to be upset. Mattel’s profit are made by producing their toys in China.

Am I too cynical? Do you agree or disagree?

I was recently contacted by Christine Lu of the China Business Network re: our MBA trip to China, our MBA program, and our MS in Industrial Technology (IT) program.

Click HERE to listen to the radio interview (5 minutes) re: our annual China trip.

Click HERE to listen to the podcast (20 minutes) about our MBA and MS in IT program.

For the record, the latter 20 minute podcast is a textbook case of how an interviewee (me) can muddle up an interview.

In my enthusiasm for what we seek to accomplish and are doing at Cal Poly I talked waaaaay too much, should have let her talk more, should have let the dialogue naturally flow. Drs. Whitaker and Beamon, who teach your Communication for Mangers course, would rightfully and justifiably take me to task for this blabbing. I would rate my own performance a “D”, at best. I am clearly rusty at giving interviews.

Listen … and learn … how not to do it. Christine Lu was very good and a gracious interviewer. I was not a very good interviewee this go-around.

My main point for this self-criticism is to actually make and educational point: More and more the soft skills are becoming the hard skills in business. 

It can be tough for some students and professionals to swallow that something without a formula, something so subjective as communication, can really knock them on their behinds.

My secondary point is that these skills can easily atrophy. They need to be nurtured and developed and refreshed throughout your career — a one time MBA class dealing with communication issues only means you are on your way, not that you are set for life in this important area of business. Don’t assume that just because you made it through your MBA communication course that you can now run back to the back room of your firm and you never have to speak or write in front of people again.

Don’t believe it? Then click HERE and HERE for these recent Wall Street Journal articles [subscription may be required] on this topic.

Ms. Lu has such an interesting background — as I understand it she moved to the US from Taiwan with her family when she was very young, grew up in the Los Angeles area in a Latino neighborhood, did her undergrad at Boston University, spent 4 or 5 years in Shanghai working with/for the Home Shopping Network seeking to make inroads into the Chinese market, and she is now back living in the San Diego area.

I have been perusing her blog. It’s great. I wish I had 1/100th of her web and technology skills. It is a wealth of information and resources. Check it out.

Please watch this three minute video before we arrive in southern China (called “Factory of the World” - features a factory in the Taishan province) by the NY Times’ Nicholas Kristoff of China Wakes fame.

Two thoughts came to mind as I watched this video.

One, the NY Times is often criticized for being “too left”, yet in this video it’s the Times making the argument that the human rights criticism of these factories is overblown.

Two, the general thrust and point of the video has been my own experience. Most of the factories I have seen and visited in China I would grade as a low “B” or high “C” on the treatment of workers issue (I define a high “C” as satisfactory).   A very, very small number I would give an “A”.  I have been in a small number of D and Fs - they do exist and they are ghastly by Western standards, but to the extent the video argues most in China are not D and Fs, that has also been my own experience.

Also be sure to check out this subsequent blog post, “In Defense of 12 Hour Days”, that Kristof made about this video in response to those who disagreed with his praise for the Chinese town of Dongguan and his comments about the woman who works 12-hour shifts seven days a week. Very insightful, in my view. But also stuff that people won’t hear or listen to if they have their mind made up.

Finally, remember … before you lecture or preach to the Chinese on labor and factory issues, and to help you put the issue of the factory working conditions we will see in China into a comparative historical context and perspective, you must read this Wall Street Journal article, Lemonade Stands? Children Used to Toil 14 Hours, Every Day.

On the flip side and for a different perspective, check out this thoughtful and interesting Washington Monthly article I came across, Confessions of a Sweatshop Inspector.  And see also this recent C-Span broadcast (click HERE to watch the interview and segment - 7.30-24.0 = the China bit); this segment is an interview of Mike Daisey, the story teller behind the well received show, “The Agony and Ecstasy of Steve Jobs“.

And back to the original question of this blog posts, “Is China the Factory of the World or Market?”

It’s both.

No debate on the first category (factory of the world).

Re: the second (market?), as an example, I recently spoke with a former Nike executive who noted that 80 percent of what Nike makes in China it in turn sells there in its domestic market.  As a second example, see this Wall Street Journal article, Vespa Looks both Ways: China, India.

This Wall Street Journal article, For Some Manufacturers, There Are Benefits to Keeping Production at Home, also does a nice job highlighting for you what type of manufacturing moves to China and what type tends to stay home here in the US. To gain a feel for how the services industry and market for foreign firms is developing and set to take off in China, see this recent China Law Blog post, China New Investment Rules ….

When we are in Guangzhou, you will meet Lonnie Hodge of One Man Bandwidth fame, and some of his students. Great guy. Smart and quick as a whip. Kind as can be.

As you will likely be taking lots of pictures in China, you may want to jump in on this China photo contest he is pulling together. This contest is part of a coffee table book that will raise funds for China charities, including the amazing yet sadly now down to the last remaining survivor, original League of Extraordinary Chinese Women.

Great idea, Lonnie!

Clarification to make sure there is no confusion:

1. On your individual blogs, each individual is supposed to have a short recap of each facility we will be visiting (noted *** in your information booklet).

2. Each team is responsible for approximately 5 “focus” firms to be ready to be the catalyst for questions when we are on the road - but nothing needs to be posted on your blogs ahead of time.

Submitted By: James Towers

So far, environmental policy has been slow to hit China and, with the population and the economy booming, comes a greater desire to own cars. Combined with the lax attitude toward the environment, ecologists across the globe are frightened of China’s future progress.

Recently, however, China has been shaking the green stick of environmentalism at car manufacturers. In only the last year, China has proposed legislation that would make emissions standards even tougher than in the United States.   ”The State Environment Protection Administration  (’SEPA’) announced in early October new standards for vehicle emissions that will reduce car pollutants by an estimated 30%. The new standards will take effect in 2007, forcing Chinese car makers to adopt technologies that are already standard in international markets. The 2007 regulations are equivalent to the Euro III standard used in the EU.” — EIU ViewsWire.

However, this bold declaration for the future essentially makes no difference because the standards for vehicle emission only work if all the fuel in China becomes cleaner.   For example, in Guangzhou they have pledged to easily meet this requirement and cut emissions in half, but the only way they can do this is with a clean supply of fuel.   “Only ten petroleum stations in the city currently supply clean enough fuel to complement the Euro-3-standard fuel-injection systems”  (EIU ViewsWire. New York: Sep 11, 2006). This means that no matter how hard the car manufacturers try to bring in the latest fuel efficient technology, because of the low grade of Chinese fuel, all the benefits are negated. “The level of vehicle emissions is not just connected to engine technology, but also to the quality of the fuel.  Although Beijing has moved to reduce sulphur content in fuel, analysts say that fuel quality in China remains low because of insufficient refining capacity.  The result is that the level of emissions can remain high despite the introduction of sophisticated engines. “Even companies which have brought in the latest vehicle technology to China complain they cannot meet the emissions standards,” says Timothy Dunne, partner at Automotive Resources Asia, an industry consultancy, in Beijing.”  – Dyer, Geoff

With all this in mind, does it appear that China is just “greenwashing” the rest of the world into thinking that it is environmentally conscious?

Or is this really just the beginning of a truly concerted effot by the Chinese to reduce, Number (1) the smog in their cities, and Number (2) greenhouse gases?

You may enjoy this You Tube video a colleague sent me with the following message:

Chris:  In four minutes this video captures some of the vision of the future I have been spouting off about since my first trip to China ten years ago. I can remember standing on a bridge in Guangzhou during that trip at rush hour and seeing more people pass by me in fifteen minutes than pass by me all day on a sidewalk in [City X].   I knew the numbers were against us.

I agree with him and the overall theme that this video seeks to convey.  And seeing some of the points made in this video first hand is one of the reasons we have put this course and trip together for you.  Perhaps more than ever, success in the future will go to those individuals, businesses and countries who best deal with and adapt to this shifting world.   Straight up:  in the future each of us will need to run even faster ….