Posts filed under 'Misc.'
A hat tip to Gary Chou for sending me the below link. I am a National Geographic subscriber, remember the below issue coming out and reading it, but I forgot to put up a post and the issue had since disappeared into the mess on my office desk at home.
Click HERE to check out these great pics on China’s Instant Cities (the photo gallery link is on the right side of the page; the commentary by Peter Hessler is top notch, as is all of his work - e.g., Two Years on the Yangtze). And reading this very good Wall Street Journal article, On the Move: Chinese Officials Want More Farmers to Migrate to the City; But They Are Also Aware That Migration Brings Problems, will put these photos into a good big picture context for you.
Finally, last month, April 2008, National Geographic published a special issue only on China called, China: Inside the Dragon. Check it out. Again, some great short pieces by Peter Hessler and the usual amazing pictures. You can also click HERE to listen to the China Business Network’s recent podcast interview of the Editor-in-Chief of National Geographic Magazine, Chris Johns, about this issue on China. I also had no idea National Geographic is read by 40 to 45 million people each month. Cha-ching. And talk about a company that has put on a clinic for others re: how to manage and build its brand ….
Enjoy.
Prof. Carr June 13, 2008 addendum: see also this related post on instant city Shenzhen I just made (Shenzhen is located in southern China).
May 18th, 2008
I am impressed and humbled by those who do non-profit work who can stretch a few dollars a long way to make a significant different in the lives of others. A good example of this is Tom Stader at The Library Project. Tom is one of the entrepreneur panelists I have lined up for you to have the opportunity to meet in China, should you elect to attend and participate in the hutong event I set up for Sunday, June 22 (see your info booklet for more information and the cost).
Click HERE to see his amazing pictures of a recent school in China where he and his team delivered and set up a library (you need to scroll down a bit to get to the pics). The joy on the faces of these kids is inspiring and beautiful.
What business questions can you think of to ask him when we meet with him?
Prof. Carr April 29, 2008 update: Click HERE to check out the latest delivery Tom and his crew made to a school in the An Hui Province in China. The kids in their band uniforms are priceless.
April 18th, 2008
Submitted By: Mark Fairman
For nearly three decades, foreign investors had reaped huge benefits from their geographic locations in the PRC. Tax Holidays in provinces along the Eastern seaboard (Shandong, Jiangsu, Fujian, and Guandong) have allowed for large imbalances in exports between regions—as well as imbalances between foreign and domestic firms.
The initial tax holiday allowed manufacturers to pay no income taxes for their first two years and taxed only half of the standard 25% for the next two. Also, duties and taxes for exports of foreign manufacturers are differed indefinitely. Along with the ridiculously cheap cost of labor, tax exemption has been a major draw for foreign investors over the past years.
This situation sounds great for companies moving operations abroad, but the Chinese government has started phasing out these exemptions (except for high-tech firms and R&D) at the beginning of 2008. They are doing this to allow a more level playing field between the eastern provinces and the central and western provinces of China, as well as an attempt to upgrade their manufacturing model by luring in more high-tech firms.
So what does this mean for a young entrepreneur thinking of doing business in the PRC? One solution to this problem might be to locate facilities in the central provinces of Chengdu and Xian, where the Tax Holidays are still in effect. Of course, with this move, there is weaker transportation network and no direct port access. Do the benefits of this move outweigh the costs? Are there business opportunities created by a shift in manufacturing locations?
For a more in-depth into the particulars of the 2008 tax reform, click here.
April 4th, 2008
Gifts are a big deal in China. It’s part of the expectation and game. One brought gifts to the Emperor as part of the expected “kowtow” Dr. Morris told us about; today, it may take a different form — in dealing with the Chinese government you bring foreign investment or technology or evidence that you are committed to China for the long term and not to rape and pillage, take your money and make a quick exit for home, etc. for its blessing and regulatory approval. And for your friends and/or business colleagues one often brings personal gifts as part of building guanxi.
You will be organized into teams and assigned to several companies (see your Information Booklet for the details). As part of the firm visit, your team will be expected to purchase, bring and present a gift to the noted manager(s) (again, see the Information Booklet for how many gifts you need to bring per firm). The FAQ document has some good information on gifts (see Question No. 68). Please go back and re-read that question. You will need to give firms something nicer/better than a Cal Poly t-shirt or polo.
If two teams have been assigned to a firm, no need for both teams to each bring and give a gift. Instead, collaborate and work it out re: who will get the gift, wrap and pack it, how you will share the cost, etc.
Several weeks ago I was in Barns and Noble. They had some killer sales on picture books. I picked up two gorgeous picture books about China and one on India for about $12.00 each.
I noticed that B & N had some very nice picture books on SLO Country Wineries, so I bought a few to hand out as gifts when I traveled there in March.
I also noticed that B & N had some other killer picture books about California, Big Sur, Yosemite, etc. Some of these picture books I noticed were on sale, some where not. (Also, perhaps El Corral Bookstore has some nice picture books about Cal Poly? — check it out. Borders bookstore in the Madonna Plaza may also have some nice picture books.)
If you divvy the cost of a company gift between four people (or eight people if two teams have been assigned to that firm), this should not break your bank. See the Information Booklet for suggested maximum budget per gift. The amount is not nearly as important as the thought and the connection to you (see below).
It is important that the gift you choose (it does not have to be a picture book!; I just note the above as an option) be an extension of you and who you are. The personal thought and touch counts. The gift can, but is not required, be tied into your home and where you live. A nice California, Big Sur, Yosemite, Cal Poly, etc. picture book might be a good idea to bring as a gift, and easier to carry and pack than other potential gifts.
Note that for a China gift, per the Information Booklet for some of the firms you need to stay away from the SLO County Winery picture book, as I already gave that to a fair number of people you will meet in China. But for India, it can/still will work nicely.
As a personal note, when I made my first foray into China years ago, I brought Central Coast wine. In my own arrogance and western ethnocentricity, I thought, “Wow, are they going to be impressed with SLO County wine — after all, it’s great stuff and we are God’s chosen people here in SLO town.” One major problem, though — wine drinking has not yet taken over China like here, so I could tell they viewed said gift with a “ho-hum, big friggin deal, what’s this?”
So, if it was me, I would stay away from wine as a gift (it’s also a pain to pack and carry, and can break and if red wine, your clothes will be trashed). But for some reason picture books, even of a winery or vineyards, they seem to like and appreciate.
Wrapping Your Gift:
This important. I REPEAT — WRAP YOUR FRIGGIN’ GIFT. How you wrap a gift, and the care you take to wrap it and the quality of its presentation is also a big deal in China. This is a part of external/outward “face” in China. Thus, you need to make it look good when you wrap it. Color of paper is important (again, see FAQ document; red is a safe color). Color, packaging and how it looks is part of the romance you are bringing and trying to offer to make yourself look attractive and sincere.
As long as your gift does not contain metal, you can wrap it and put in your suitcase and TSA will likely not make you take it out and unwrap it so they can see it (but I cannot guarantee that what the white shirted storm trooper may/may not do!).
WARNING: if you put it in your carry-on, then definitely don’t wrap it as there is a good chance TSA will make you take it out and unwrap it!!!
Another option - you might wrap your gift once we are IN China, by bringing and packing your wrapping paper and tape with you, and then you wrap it in the hotel room (I have done this a time or two). Once we get to China, finding a place to buy wrapping paper and/or tape in a quick manner is unrealistic and you likely won’t have much time to go on a gift wrapping paper and scotch tape hunt, so I would not plan on that.
Need More Info?
Tap into the expertise of your colleagues! — Simeon, Justine, Gary, etc. They can give you good ideas and suggestions. You would be remiss if you did not touch base with them on this.
For India, Dr. Singh notes the same rules and expectations noted above apply.
Again, the SLO Country Winery book will work well for India, but I have already given out a number of these to folks in China that you will meet so if you go with a picture book for the China firms, gotta pick another picture book if you go that route …
April 3rd, 2008
Submitted By: Matt Sprecher
As the Olympics near and China continues it’s push towards economic prowess, a road block has appeared in the form of inflation. In a recent New York Times article, China’s recent inflation hike is analyzed to uncover the cause for distress within the Chinese government. With the Olympics less than half a year away the eyes of the nation have switched from the games in Beijing, to the potential political backlash coming from the lower class citizens of the country:
”I’m concerned that there will be demonstrations. The government must recognize this,” said Robert Broadfoot, managing director of Political and Economic Risk Consultancy Ltd. in Hong Kong.
With all the sub par conditions that exist within the poor farm communities this inflation has created a new world of concerns. Throughout this article Chinese officials and others concerned with the situation give insight in to how this problem may be fixed. One person comments that it will stay high, in light of the recent crop troubles caused by the terrible storm of recent months. What do you feel is the way for China to get over this small speed bump? Will this all just iron itself out, or does the government have to start worrying protesting from lower class citizens? Could this be the straw that breaks the camels back human right’s wise? How will this affect the Olympics? Lots to think about, lots to discuss. Any thoughts?
April 1st, 2008
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?
March 23rd, 2008
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:
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.
March 17th, 2008
In response to my post, Corporate Strategy and the Speed of the Supply China, several people commented on their hope that said jobs might one day return to the US and/or they posited the question of why not Mexico rather than China so that goods could be moved into the US more quickly?
If only it were that simple. See this March 3, 2008 WSJ article, US Shoe Factory Finds Supplies are Achilles Heel.
This article beautifully highlights why said jobs, industry and manufacturing left the US and ain’t never coming back. The article discussed how a man with his heart in the right place tried to bring some manufacturing back to the US from China and he set up a shoe manufacturing plant in Florida, he did all that he could to make it work, yet in the end failed.
Why did he fail?
Well, at the end of the day, Chinese labor is cheaper, lots cheaper, than American (and even Mexican) labor, and many just don’t fully understand and appreciate how cheap it is in comparison to these other places. He could just not compete. Perhaps more importantly, the infrastructure needed to make a factory tick no longer exits in the US for most products and industries (and if it does not exist here, it sure does not exist in Mexico in many cases). Note that the term “infrastructure” does not just mean roads and UPS delivery — it also means parts, service professionals for machines, the willingness of a firm’s supporting suppliers to fill smaller orders, etc.
One reason China can offer a more competitive factory “infrastructure” is due to clustering, and we will discuss this in greater detail once we are in the road in China. This is where a number of firms in the same industry set up shop together, or, entire towns in China devote their existence to the production of one product (e.g., sock city, watch city, tie city, etc.). The synergies and efficiencies offered by such clustering are hard to beat.
For a number of products and manufacturing industries … gone baby, gone.
March 13th, 2008
Submitted By: Nic Dominguez
In the March/April issue of the Foreign Affairs periodical Harry Broadman, Economic Adviser for the Africa Region at the World Bank, bring us a new perspective on the relationships between China and India and the developing countries of Africa. Broadman’s article focuses on the trade and investment relationship between the two continents and how it can help develop the African economies but further insight can be found in the trends appearing in the Chinese and Indian imports. We now call China the factory of the world but it is very possible that Africa could be the factory of China 10 years from now.
Exports from Africa to China grew at a rate of 48 percent between 2000 and 2005. That is two and a half times the rate from the United States and four times that of the EU. As you might expect most of the exports are in energy and mineral related natural resources. A hefty 86% of exports are in oil, ore, metals, and raw agricultural commodities. This is expected from the poor, infrastructure barren economies of most African nations, nevertheless light manufactured goods exports are growing too. China and India’s budding middle class are looking to Africa to supply them with new household goods, processed foods, and back-office services. China now buys 10 percent of Africa’s total exports and India 3 percent. This jump in trade volume is not by accident. The Chinese and Indian governments are actively taking steps to improve the environment for trade and foreign direct investment.
Chinese/African relations have been improving dramatically over the last few years. Beijing’s “China’s African Policy” presented by Hu Jintao to 48 African leaders, describes China’s plan to double its assistance to Africa by 2009. It will “provide them with $5 billion in concessional loans and credits, establish a $5billion fund to encourage Chinese investment in Africa, and cancel the interest-free debt it was owed by 33.” The Export-Import Bank of India Focus Africa Program established in 2006 extends a line of credit totaling $558 million half of which is geared toward the development of West Africa. Although assistance is growing tariffs on trade still inhibit growth, but in 2006 Beijing eliminated tariffs on 190 commodities from the 25 least-developed countries. By 2007 this grew to 440 commodities.
This appears to be the same trend that emerged when the U.S. and European middle classes began to demand an increasing volume of consumer goods. It may do be too soon to conclude that the manufacturing heyday of China is coming to an end but recent offshoring of Chinese firms to Indonesia and Vietnam combined with increase trade with Africa could be the first signs of a fundamental change in the Chinese economy. I see India’s service oriented growth as much less susceptible to competition from underdeveloped nations in places such as Africa. The telecommunications infrastructure needed to conduct a service oriented business just hasn’t taken hold in Africa. In any case a stronger trade relationship between the two continents will make for a much more interesting and complicated business environment for future graduates looking into international trade.
If you would like to read the full article in Foreign Affairs and you live in San Luis Obispo I would be more than willing to lend out the article.
March 6th, 2008
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…
February 26th, 2008
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