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 …

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.

[Combined two posts into this single post as Pierre and Kyle submitted on the same topic. - Prof. Carr]

Submitted By: Pierre Michael

Traffic, you think you have it bad!? Check this out, watch the video. As the rate of car manufacturing in India steadily increases, traffic is noticeably worsening in crowded cities like Mumbai. Consequentially, motorized two-wheelers account for 80 percent of all vehicles. Is this safe?

Making it by on their meager salaries, many families purchase motorcycles or scooters instead of cars because that’s all they can afford. These two-wheelers become the family vehicle, not one that they take turns on, but one they all ride at the same time. These transportation woes have many families worried about their safety; but what are they to do?

With an average wage of $1,740 USD a year and $4,020 USD a year for white collar jobs, it’s easy to see why cars are out of reach for so many. A 2007 report said that 77% of Indians live on less than 20 rupees (50cents) a day.

Tata Motors, also known as Telco, made a promise to sell cars for 100,000 rupees or $2,500 USD making it the cheapest car in the world, half the price of the current cheapest. The promise however, may have been made a little hastily. Reminiscent to the $100 One Laptop per Child, the company is running into increasing costs of raw materials and facing heavy competition, but they are determined to hold to their original promised price.

There are 7.7 road accidents for every 1,000 vehicles and the Accident Risk Index is forecasted to increase fourfold by 2025 making injury almost inevitable on two-wheeled vehicles. The Nano that Tata is proposing, although light and seemingly fragile, provides a protective shielding that could be instrumental in saving lives. This poses lots of questions though. With poverty rates quickly decreasing and more people able to purchase automobiles what will the roads look like? What will happen when the roads saturate with cars? Will everything come to a standstill? What about the environmental risks that millions of new cars will pose, how should the companies and the country handle this? Isn’t there a better way?

Submitted By: Kyle Tripp

I recently watch a clip on YouTube about the unveiling of the world’s cheapest car. An Indian company named TATA makes it. The car goes for about $2500 USD. The goal behind this car is to appeal to India’s middle class citizens and families who as of now can only afford a motorcycle. This car has raised controversy with environmentalists, who say that this will just increase pollution and add to the crowding of India’s overcrowded streets. I can see where it would benefit lower to middle class families, but will this car just be bad news for the environment? In the clip it showed people in India on motorcycles with their little kids and no helmets. With the craziness of the streets in India that can’t be safe. While this new car is as cheap as they get TATA says that it meets or exceeds all safety and emission standards. I feel that this car will be better for the safety of the lower to middle class families that currently get around on a motorcycle. Though, is the safety of the environment in India currently a more important issue? Look at the clip and let me know what you think.

Submitted By: Catriona Banks-Orosco

“When the US sneezes, do parts of the world get sick?” That was the question posed to us in International Business as we discussed how a slowdown in the US economy might affect other nations.

Recent articles in the Wall Street Journal and Financial Times [registration is free] describe a slow down in the economies of China and India. China’s growth is expected to slow by 2%, down to 9% this year. India’s growth will slow 1%, down to 8.7%. Not exactly stagnant, but still they’re both less than the double digit growth the countries have been experiencing over the past few years.

So, is the slow down in China and India directly tied to the economic slowdown in the US or simply the natural process of a growing economy? Does it indicate a larger problem? Or opportunity?

Exports have fallen in both countries. India is likely to keep their interest rates high to attract investors and to try to tame inflation. China’s imports outpaced exports for the last three months of 2007. As the value of the US dollar falls, imports cost us more, but suddenly our exports have a larger audience that can afford our products. China exports products to many nations, but the US market is known for its mass consumption. So could our slowdown in consumption, create the space necessary for China and India to consider longer term, environmental implications in future growth plans? The World Bank is hoping for just that. A slowdown will allow China to “recalibrate growth away from heavy industry in favour of consumption and services.” This would allow China to re-balance the economy away from resource intensive industries, reducing green house gas emissions and pollution. It would also position China to eventually become the world’s largest economy, surpassing the US in consumption, and buoying the global economy. Redirecting growth away from heavy industry won’t necessarily translate to environmental protection. But a transition to services and consumption could help lift a major portion of the population out of poverty. Heavy industry has not created many jobs. A transition to services and local consumption will create jobs for more people. As the overall level of income rises, the citizens of China are likely to begin to demand more protections, for themselves and their surroundings. Of course this won’t happen overnight. But history has shown that as populations are lifted out of poverty, they expect more. The same will hopefully be true in India, where the rise in incomes of some of its people has not been spread across its vast population.

I don’t fear the common cold, I don’t like it, but I’m not afraid of it. I let my kids dig in the dirt, wear shorts in the rain and wear themselves out. The logic is that it will increase the strength of their immune systems by allowing them to be exposed to regular germs in their environment. Maybe the slowdown in the US will have the same effect on the world economy. Many nations will be adversely affected in the short term. However, it could also force the world to take a breath, and consider future paths instead of simply plowing forward. Ideally all nations will gain an understanding of how to grow economies in a sustainable manner.

How do you see the US economic slowdown affecting the rest of the world? Could it be good for the world economy?