A hat tip to Dan Harris and the China Law Blog for this lead ….

Here is a really, really interesting power point presentation by advertising giant Ogilvy on consumers in China’s Tier II and III cities. Some great stuff in here that will relate to what you are studying or will study in your MBA marketing class this winter quarter (e.g., branding, market segmentation, packaging, impulse buying, distribution channels, price sensitivity, who makes the family buying decisions, etc. anyone?). This material also highlights why so many foreign firms are trying to get into the market there — the consumer class and their spending power in these lower tier cities are on the upswing. This presentation is worth spending a few minutes to click through and study. Doing so, via this compare and contrast measure, also helped me better understand the marketing of products here in the US. Once in China, as you walk in and out of stores, and as you bus from A to B and look out the window, you need to think back to this material and connect some of the dots as related to your coursework ….

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.

Check out this wonderful video that Erik Slayter has noted. This is one reason I agree with Henry Lane, who spoke to us earlier in the year, that it’s only a matter of time before China becomes an economic, political, military and geopolitical force to be reckoned with. They just have too many people like the amazing young woman that’s the subject of this video portrait who are willing to buck up, sacrifice and just get it done ….

Chris — I recently came across this website. This site is a project where they interview regular people from all over the world on a handful of topics such as “love, tears, happiness, childhood, etc.”. It is a very compelling site if you enjoy watching people.

Also, of particular interest to us is an interview with an 18 year old Chinese girl who has just moved to Shenzhen to start working. To get to her interview, once you’ve gone to the “English” page, click on the little link called “portraits”. Once you get videos playing, you can scroll down to “China”.

She talks about her family, her country, her work, etc. I found it to be very interesting to listen to her talk.

Go check it out…it might even be better than watching people at the airport.

Also, 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 simply must read this Wall Street Journal article, Lemonade Stands? Children Used to Toil 14 Hours, Every Day.

Professor Carr October 15, 2008 update:  See also this thoughtful Newsweek article on factory girls in China, Assembly Required.   An interesting piece that comes at this controversial topic from a different angle that most I have seen.   The book highlighted in the article might also be a good one to select for your Spring quarter book review.

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 ….

Submitted By: Kerry Huang

See this Wall Street Journal article (Chinese Investors Crunching Numbers Are Glad to See 8s).

In the US and most developed nations, investors carefully study companies before making investments. Financial institutions with seasoned analysts account for a bulk of the transactions on the stock exchanges. However, in China many of the investors are unexperienced individuals who base their decisions on “lucky numbers”;  specifically, the number eight, which signifies “wealth” in Chinese.  According to the article, investors will buy a company’s stock if the number eight
is in it.

Many will find this practice laughable but the Chinese take lucky numbers very seriously.  For example, as we ride the elevators in China one will notice that the buttons for floors 14 (”want death”), and 24 (”easy death”) do not exist.  With 60% -80% of China’s trades being made by inexperienced investors, one wonders what will happen to the stock market? Will these superstitious investors crash the market? How will the government regulate such trades?

Side note:  Even Chinese American’s who grew up with superstitious parents are affected by lucky numbers. My normally rational friend freaks out every time she looks at the clock and it reads 4:44, which is “death death death.”

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: Steven Feng

Speaking Mandarin or Cantonese would enhance the experience of the trip. We could interact with more people if we could speak the dialects. Unfortunately, it takes years of practice, and we have less than six months before the trip. Still, we should make an attempt to learn some basic words and phrases or to practice the language for those that already speak one dialect.

I am proposing we have an informal discussion/practice once a week for an hour during the spring quarter. If you are interested, please leave a comment. Include in your comment:

• The language, Mandarin or Cantonese, you would prefer to speak

• The weekday and time you prefer to meet (I figure the following times would be most appropriate, but you could suggest an alternative:  Tuesday 11-12 and Thursday 11-12 on the days we are not in a China lecture)

I will count up the votes, and majority to set the time and language. I looked on the internet for books and the least expensive is about $15 with a CD.

Submitted By: Erik Slayter

I recently received an email from Grant Thornton (a large, global accounting firm) describing to me what they call their “Interest” program. It is interesting to me that they are rolling out this program focusing specifically on the Chinese market. We have several accountants in the MBA program…is this enticing to you?

Under phase 1 of this program, Grant Thornton (GT) works with Chinese Nationals from the People’s Republic of China. Through this program, these accounting professionals are sponsored by GT for a 2-3 year work visa and work in a GT US office. Interest participants have a compensation package similar to that of other professionals at their same level in the US. Additionally, participants receive the same firm training as their colleagues and are provided a coach to assist in their skills development.

At the end of their 2-3 year stint in the US, they return to China for a position with the Grant Thornton International firm in China.

GT states that their program is different than a traditional exchange program offered by other firms because they have a larger dedication to their participants. Interest professionals meet annually with the firm’s national and international leadership to learn about specific Chinese initiatives. Biannually they participate in a videoconference link to the Shanghai or Beijing office to receive an general business update by a partner in the Chinese member firm. Finally, an annual visit home provides the Interest participant to meet with other Chinese professionals to develop relationships they can build on upon their return.

Americans like to think of themselves as entreprenuers and builders.  Okay, fair enough, we are.  No need for false humility.  But so are others, particularly in China. 

My hot cup of jo’ this morning tasted particularly good due to how much enjoyment I received while reading this front page Wall Street Journal article, Tools of a Minster To Modern Seamen: Cash, Phone Cards.  Now THIS dude can teach an MBA student, a business prof and business schools a thing or two about being an entreprenuer; only he does it for Providence and not cash (okay maybe he has his weak spots re: profitability, but even entreprenuers are entitled to be do-gooders).  But give this man (of God) credit — he can flat our spot a niche market in Hong Kong and serve it in a way that others are not, and talk about a poster child for the marketing precept of “knowing your customer”!

PS — as a follow up to Professor Ramezani’s talk and your econ courses, see this very relevant China Law Blog post of earlier today, “Why China Grows So Fast.”

You know those big blue bins you roll our to your curb each week in SLO? Ever give pause to consider where all that plastic and paper you put in them goes? Try … China.

One of your classmates in the MBA program works for a local firm that helps process these materials at Cold Canyon Landfill just outside town. As I understand it, your plastic and paper/cardboard is culled out then shipped (by truck or train) down to Los Angeles, where the middleman sells it to a Chinese firm who then loads in onto a cargo ship bound for China. What happens to it next? Check out this wonderful NY Times article about one of the richest ladies in China and her recycling business and firm, Blazing a Paper Trail.

What I love about this article is that it highlights yet another example of how their are some really, really, smart people out there who are very entrepreneurial making a lot of money doing things like this that some snobs in business would consider to be too lowbrow for them. Also, what a great article highlighting good sustainability practices. … paper/plastic used in the US, put on a ship to China, recycled, then used for packaging for products that come right back to California, and then the cycle starts all over again.

Check out my earlier related post relating to plastics/MBA Polymers and this NY Times article Venture Capital Nation: A Light Bulb Goes On, and China Starts Thinking ‘Alternative Energy’.

What opportunities can YOU spot to jump in on to make a living and make the world a better place as capital, labor and investment moves around the world, as these businesspeople have done?