Tuesday, September 21, 2010

Final Impressions

If I have on overriding feeling about the trip to China, it is that it would be a great place to live and work if it weren’t so horribly polluted. Living there is basically asking for respiratory problems at a minimum, and almost guaranteed cancer, not to mention the sheer amount of waste one would produce from all the bottled water to avoid the contaminated water there. But, the food was a amazing, the opportunities are amazing, and I find Chinese language, culture and history fascinating. It’s really too bad that they have failed to keep their natural environment sustainable for human life in the long-term – here’s to hoping they can actually turn that around.

There are a few places and things we saw in China that make me more hopeful for China’s future. Young people seem to be more concerned with sustainability and less waste, rather than embracing the insanity of Western consumer culture. Given the huge population and somewhat limited natural resources of China, they don’t have the time to waste before even more harm occurs than 30% of water being contaminated, or entire cities being evacuated due to chemical spill.

There is a lot to be worried about though. There are a lot of cars in China, and most of them are like ours, which is to say dirty polluters of both particulate matter and CO2. What’s worse is that to achieve the same percentage of GDP we do, China expends 10 times or so the energy. Every bit they grow, they exponentially increase their levels of pollution, fossil fuel usage, and resource usage. If the Earth had infinite resources, that would be just fine, but it doesn’t. So, I have to admit that China’s growth really worries me, because we can’t tell them they shouldn’t do what we did in good faith, especially since we’re not taking significant steps ourselves to reduce our own levels of pollution.

The key takeaways:
-There is a lot of opportunity in China at this moment in terms of growth and a consumer minded middle class
-China is incredibly polluted from trying to grow so fast and from having a growing consumer minded middle class of consumers
-It is really hard to be vegetarian in China

Monday, September 20, 2010

Shanghai Expo and Leavetaking

The morning of the Shanghai Expo, we left fairly late in the morning. I think many of us are, while not looking forward to the actual flight, looking forward to slowing down a bit. The weather was incredibly hot. The kind of hot that made it difficult to function in Singapore, Miami, everywhere I’ve been too far south of Seattle. I loved Alaska, though, especially when it was raining and gray… in any case, it was very, very hot.

We all split up after taking the first few group shots, and made our way around the Expo. The lines were incredibly long at some of the pavilions, and we heard that you had to have reservations for the Taiwan exhibit. Some of us eventually made our way over to the Europe pavilions, as our resident architecture expert Juli told us they were worth seeing – and she was right. The UK exhibit was like a giant metal porcupine, and the Germany exhibit was a really neat angular thing. Definitely enjoyed viewing them, but the lines…. Not gonna happen.

I wanted to see the Austria exhibit, and Claudia wanted to see the Sweden exhibit, so we continued on through the Expo park after some of the others took off. Even the Austria exhibit had an hour long line. We finally felt like we hit pay dirt when we reached the shared European pavilion that contained San Marino, Liechtenstein, Cyprus, and a few other small European countries – no lines! It was like getting free candy, but better.

The final going away dinner was the best dinner we’d had in China, which is saying a lot. The food here has been really amazing. There was an orange fish that was so perfectly cut and prepared that you could just take the breaded and sauce covered chunk directly off of the fish, no bones. Highly impressive – but not as impressive as the house specialty, their roast pork. It was a slow roast pork that just about melted off of the rib that was dipped in sweet and sour sauce, then in panko bread crumbs, and then wrapped in a piece of lettuce and eaten like a spring roll. I cannot go into enough raptures about how amazing the flavors and textures of that particular dish were.

Our evening entertainment was a karaoke parlor, Chinese style. Normally, there’s a professional running the karaoke machine, and you just submit a piece of paper and sing awkwardly in front of strangers. This was a private booth type place, where you run the machine (which is in Chinese) yourself, and then sing awkwardly in front people you actually know. Much more awkward. But, I do love to sing, so it was fun. All in all, a great ending to a great trip.

Sunday, September 19, 2010

Seattle day: Expeditors & PMI

Today is our “Seattle” day – both company visits today are to businesses headquartered in Seattle. Expeditors is a logistics solutions company, and PMI is a beverage solutions company. I find that this “solutions” term has become ubiquitous in business parlance of the past decade or two. In any case, I think these visits were the most interesting for us this trip.

The answers at Expeditors were frustratingly vague on the big questions we asked, although they were perfectly happy to answer detail questions about their operations. We were wondering if perhaps they were trying to put a perfect face on their operations. Regardless, it was very frustrating to keep asking the same questions over and over again and getting the same non-answers from the regional manager.

PMI makes the cups you see at Starbucks, in addition to other private label items. The visit to PMI was brilliant, and really my favorite company visit. We were lucky to have Qin Chen at our lunch table prior to the visit, and had a detailed discussion about the employment of expatriates in Chinese firms. He said that the kind of problem solving and managerial skills they needed when they first went to Shanghai simply didn’t exist in China in the numbers that they needed to be able to find local hires, since every other foreign company was looking for a person with the same sort of experience. He said that they’ve been able to build up a number of their employees internally, and so they have those skills now, but that it is still worthwhile to hire expatriates. This could be very concerning for a company, because that’s a huge amount of time and invested effort into these Chinese employees just to make them the kind of employee that can do the necessary work. Replacing someone would be quite difficult in those circumstances.

Friday, September 17, 2010

China Study Tour: Shanghai - Paris of the East

Our trip from Xi’an was entirely uneventful, as are the best plane trips. The airline food was minimally edible, although the Sprite was nice. We took the Maglev from the airport, and it reached 431kph, which is pretty darn fast.

From the plane upon arrival in each of the cities I’ve visited in the developing world, one could see the slums on the outskirts of the city. I think Chinese slums must look different than I’m used to, because all I saw were very cramped looking brick houses. India breaks your heart with the obvious human suffering surrounding the visitor every step, every day in India. One must eventually learn to ignore it, or else go slightly insane. Maybe China’s heartbreak is primarily rural and can’t be seen on a Study Tour encompassing only the urban centers of Beijing, Xi’an, and Shanghai.

Upon initial arrival in Shanghai, it struck me that I was reminded of Mumbai. There are so many people in the streets, there is a ripe scent to the air that I suspect is the combined odor of millions of sweaty bodies from the muggy, humid heat, and a certain late 19th/early 20th century European flair to many of the old buildings along the waterfront. However, this is where the comparison must end, as Shanghai is an amazing city, full of diverse, innovative architecture, it boasts a Maglev airport train, and is currently hosting the World Expo. No offense to Mumbai, but there really is no comparison after the initial superficial similarities are set aside.

After checking in and getting mostly settled in, we took a walk down to the river to see the Pudong and the Shanghai skyline. This resulted in much picture-taking before we settled on heading across the river to the Pearl Tower.

After a long stroll to reach the ferry, then a ferry ride (2 yuan!) and then a long stroll to the Pearl Tower, it was discovered that the cost for dinner was 280RMB, or 140 times the cost of the ferry ride. That price is completely ridiculous, so half of us settled on Subway, as we were starving, and others went to a nearby mall for other fare.

The view was mostly worth the price of admission (100RMB), although having my personal bubble invaded about every two seconds is honestly getting annoying. Having my alone time helps me get back my equilibrium to face the seas of humanity about me each day, but I have to admit it will be nice to go home, back to a place where an elevator with five occupants is considered full.

China Study Tour: Brother Machinery Co. Xi’an

Brother is a Japanese company that initially began a joint venture with a Chinese firm in Xi’an in 1993. In this location, they make low-end to high-end industrial sewing machines as well as machine parts for large machinery primarily located in the south of China.

Our presentation was made by a Japanese employee who was fluent in Chinese, and reasonably good at English, although he kept distrusting himself and switching to Mandarin and one of the Mandarin speakers in our group would translate, usually Derek. He said that there were 11 Japanese employees at the plant, and only one of them spoke Mandarin. Their upper level plant managerial staff all spoke Japanese, and workers could attend Japanese courses if they wished. We found this very interesting – this is something seen in France and Japan, I would say most, this sense of national pride and an unwillingness to compromise national culture in a multinational venture. This is in reality too broad an indictment of all Japanese and French firms. However, I do believe that firms in China will either wish to speak their own language, or expect to conduct business in English. I feel that the Chinese have not yet attained a level of status in the world that would force those who wish to do business here to learn their language. Until then, I will be pleased that my language is now the language of the world, making my life much easier when traveling.

Our presenter wasn’t actually prepared for us when we arrived. He said that Chinese people are usually 1-2 hours late, and thus he didn’t expect us to be on time (we were five minutes early). Thus, some of the charts weren’t in English, and he seemed very flustered and unsure of how to structure what he had to say.

The most surprising part of visiting Brother was in hearing how not lean the processes at the plant were. Brother is headquartered in Nagoya, the same city as Toyota, and they ascribe to lean principles and the Toyota manufacturing method, and yet the volume of work in process inventory just sitting on the factory floor was staggering. The workers also weren’t wearing hard hats or safety equipment, but that is probably beside the point. The company’s core values, dress code, and team metrics were posted in prominent places in the factory. But, I just couldn’t get over the volume of inventory lying about – it was clearly not a just in time sort of operation.

The most interesting part of the presentation to me was the discussion of profit, or lack thereof, in the operation. Brother already makes virtually no profit on their lower-end sewing machine, which retails for $300, and is primarily intended for markets such as Bangladesh. They do quite well on their high end machines, but the presenter was saying that wage increases and logistics difficulties in transporting parts and finished goods were seriously eating into the potential profits of the business.

I really appreciate the time that Brother gave us in Xi’an. This was a real business tour, not a sanitized version for public consumption. We got a real picture into difficulties running an outsourced manufacturing business in China, something China is famous for in business worldwide, and the ways in which it wasn’t a successful venture, and the ways in which it was.

China Study Tour: Starfish Foster Home

Website: http://www.thestarfishfosterhome.org/index.aspx
China Contact Information
Starfish Foster Home
Attn: Amanda de Lange
Maple Leaf New City, Area C, Block B-502
Ke Ji Road, Gao Xin
Xian 710075
86.29.88044168 (Cell);
86.29.88390648 (Home)

Tuesday morning, we had the privilege to have Amanda de Lange, founder of Starfish Foster Home, give us a talk on non-profit work in China.

Amanda’s story for being in this line of work seems to be similar to many people who saw others in suffering and decided to do something about it – not generally a particularly clearly thought out plan initially – and took it upon themselves to make something happen. Amanda takes in babies with special needs who would otherwise likely die in the orphanages that they had been living in due to their special requirements. These babies can range from having problems like cleft palate, spina bifida, hemangioma, or congenital heart defects. All of these are treatable, but many parents in rural China don’t know where to go to help their child, or don’t have the money with which to do so, and so they are abandoned.

To illustrate the severity of the problem: children born with cleft palate in the United States (which happens at a much lower rate than in China, probably due to maternal malnourishment in the developing world) will have surgery to fix the deformity and will live the rest of their lives with a scar, but little else will be different for them. If a cleft palate baby goes to an orphanage here, the mortality rate is around 80%, according to Amanda, based upon the lack of available care to make sure that the baby gets the food they need to grow.

Any non-profit faces problems working in China. For one, it is very difficult for NGOs to enter or work in China, and Amanda said that none have been approved to work in China for the past ten years. For another, the legal framework doesn’t exist as it does in other countries to reward donors for giving to a charity, and the charity has problems setting up as a not-for-profit entity. For that reason, Starfish Foster Home is set up as a 501(c)(3) non-profit in the U.S., rather than in China.

Some of the management problems that Amanda faces are due to Chinese culture, and some are due to her own managerial style. She has faced numerous problems with her staff not being able to anticipate problems, or respond sluggishly when there is a serious problem, such as a stove broken for two days, meaning no warm milk for the babies. She also works way too many hours in the day, because she doesn’t have a capable administrative staff to take some of the load off of her shoulders. In addition, Amanda’s style is passionate – not business process oriented. Her love for her babies is more than apparent, but she admitted herself that she has flown by the seat of her pants for the past five years and more or less has approached her growth and non-profit business development in a very ad hoc way. If she had more specific and detailed processes for her staff to follow when inventory was low, something was broken, even in the form of a decision tree, she wouldn’t have to spend nearly as much time thinking for them, and could spend more of her time on fundraising and networking with the people who can help the children most.

Some of the organizations and people Amanda has worked with:
Smile Train
Operation Smile
Lisa Buckmiller (University of Arkansas Children’s Medical Center)

One of the things I found most admirable about Amanda is that even in the face of serious adversity, such as her rooms being torn down and needing to find new lodging for her nannies and her babies, and in the face of an uncertain future for her foster home based on the political climate in China, she still is passionate and giving of herself and has spent her life savings on this project, even when it probably would have seemed prudent to leave the work to someone else. I deeply respect and admire anyone who can take their reaction to the pain and suffering of others and build something to respond to that need. It is unknown to me how many babies Amanda has saved through her work, but even one baby would have made her effort worth it.

China Study Tour: Xi’an Hi-Tech Park

Our visit to the Xi’an Hi-Tech Park was another public tour style view into Chinese business. While they had A/C, they did not have the candor of say, VanceInfo, or the usefulness of the U.S. Embassy presentation. What they provide most of all is a view into how China wants others from the outside to see itself, and how it chooses to present itself.

The layout of the demonstration area that is in a building, which is apparently dedicated entirely to the purpose of attracting businesses to Xi’an if the building directory can be believed, was similar to ENN’s in that it told the great and wonderful history of the Xi’an Hi-Tech Park. I’m sure there is some value to always painting a rosy picture to outsiders looking in, but it is to be hoped that they are at least honest amongst themselves in their own planning sessions about what challenges they actually face.

The primary focus of the presentation was about how Xi’an’s infrastructure was being improved to the point that it was just as desirable as a coastal city, while still having much lower costs and much lower turnover rates, especially as compared with a place like Shenzhen. The speaker was very much speaking the party line, and it reminded me of the professor from the University. The only reason the government has so much control and influence in these ventures is that people really seem to believe it’s working, despite the immense environmental degradation that rapid economic growth has wrought, as well as the clear disparity between the haves and the have-nots in society. What the government has done is provide them hope for the future – and any government who manages to keep the populace hopeful for future prospects does not have to worry about losing power.

Another thing that I found interesting, both in this visit and throughout the trip, is the focus that the Chinese are putting on high-value added services and goods. I have read some executives’ words in interviews saying that we’re only sending low-end goods abroad, and that the U.S. will continue to be a global center for innovation and high-tech goods. While I do not doubt this is partially true, since that is something we have experience with and are good at, this is precisely the area that we should realize China wants. The space station, the work on aerospace technology to build large places, micro-processing plant – if anyone still really believes that the U.S. can continue to be world leader and innovator in high-tech products and happily continue to dump only low-value added work to the developing world, they’re very much mistaken. Many of these countries have the hope of truly competing, and gaining for themselves the kind of respect and admiration we have garnered in our businesses in the past century, and it shouldn’t be at all surprising that this is so.

Another interesting note from the presentation was the volume of government sponsored educational institutions. While I’m sure they’re doing very good work in training the populace for gainful employment, I can’t imagine the professors enjoy any sort of actual freedom to teach as they like, when I can’t even access my own blog from here.

A rather shocking moment occurred partway through the Q&A with our hostess. She answered her phone in the middle of our professor’s question, and proceeded to speak for a good 30-40 seconds on her phone. That would be the height of rudeness in the U.S. We have spent a lot of time learning about Chinese business culture and what is acceptable or unacceptable and how to give and receive business cards properly – hopefully Chinese businesspeople do the same thing and realize that cutting someone off in the middle of a question and treating them as though their question is a far less importance than a phone call would be a serious faux pas to make.

China Study Tour: Northwest University Visit

Our visit to Northwest University was intended as a comparison with the Beijing International MBA visit in Beijing. It ended up being a valuable experience, in terms of learning the kinds of students who chose Northwest University, and also the faculty.

The first speaker required our tour guide, Peter, to translate (and Peter did an excellent job), but I found it interesting as this is the first official person we’ve run into so far who has not chosen to speak English. Our second speaker was another professor who had recently returned from a Fulbright scholarship in the U.S., in Los Angeles. Her English was excellent, and she did a great job attempting to sell us on Xi’an.

Two thins became obvious to me fairly quickly during the presentations and subsequent Q&A. People from Xi’an are very proud of their city and what the government is doing to improve it, and the Northwest University students were much more willing to engage and listen to what we had to say.

To address Xi’an and governmental influence in greater depth: Chinese people we’ve met here are universally pleased with how the government is improving infrastructure and job opportunities in Xi’an. I expect that we would likely find a lot more discontent were we to meet people not benefitting from this deliberate investment. However, it is indisputably true that companies are moving to China, and that the Chinese economy is growing at a very fast clip, and the average wages of both rural and urban residents has increased significantly in recent decades, even if there is still a huge gap between them.

I still am undecided as to the wisdom of their method, given that the growth here still seems very artificial to me, being that it is forced almost entirely by government action and intervention. That, to me, is not sustainable business. However, another piece of the sustainability puzzle is infrastructure, and the United States is faced with an aging infrastructure system that is too heavily dependent upon roads for transportation of goods and people, and an electricity grid incapable of truly harnessing the power that exists in the U.S. for national use. This lack of investment in needed infrastructure will hamper growth in cities that do not make it possible for employees to get to work, and transportation hubs that cost companies time and money, rather than providing a seamless transportation network.

During out lunch, our hostess at the University treated us to a beautiful Chinese love song. As with Jackie’s singing on the bus, I could detect neither embarrassment nor vanity in their actions, merely a love of singing and true talent. It reminds me of what we read in China Road about the importance of singing in a culture where so little is spoken openly. We are still planning to get Jared to sing, but perhaps there are too few evenings left to make it happen.

Tuesday, September 14, 2010

China Study Tour: City Wall of Xi’an

This morning, we took a leisurely Sunday morning bike ride along the old city wall of Xi’an. Xi’an was the capital of 13 dynasties throughout China’s history, and this particular city wall was built during the Ming dynasty (corresponding with Europe’s High Middle Ages).

The wall is made of large bricks, which can make riding a bit bumpy. Add in the rusty nature and dubious quality of the bicycles we rented, and it was quite an adventuresome excursion.

Seu-jan had decided to go to Huashan instead of come with us biking, as that seemed much more interesting to her. Honestly, it sounded more interesting to me too, but maybe if the temperature had been cooler, I might have gone. Heat and me don’t get along. She said when she got back that the best part of her trip was the view and the clarity of the air.

After getting back from the bike ride, we were to head off to a Sechuan restaurant. Unfortunately, we couldn’t get taxis, and we really couldn’t make it in time walking (our guide in Xi’an, Jackie, was kind of lame about some things) so we ended up splitting off, the vegetarians and company going to Pizza Hut, and the rest going for Muslim food, which is very meat-heavy.

Speaking of Jackie, our cultural tour guide here in Xi’an, he offered a “laundry service” on the bus, and it was at 30% of hotel prices. Hotel prices are, to give you some idea, a $1.75 to wash a pair of underwear. Unfortunately, I did not hear the price, and sent off my laundry happily, to be stuck with a 210RMB bill when it came back. It is beyond ridiculous to pay $30 for laundry. He informed me that if I had not used his “friend’s” service, then I would have had to hang up my clothes in my room perhaps, to which I replied, “That’s exactly what I would have done!” Bilking your tourists is not a good way to be a successful tour guide. To top it all off, my clothes were still damp when they arrived.

For the afternoon, we all went our separate ways to enjoy our last free afternoon of our trip in China. For the rest of our time here, we have daily obligations. I plan to enjoy my day doing very little, maybe reading a book, or lazing about. It sounds truly heavenly.

China Study Tour: Dumplings, Dumplings, and more Dumplings

For our evening meal, we were able to enjoy an 18-course dumpling meal. In China, however, there is no tradition of vegetarianism, and thus all of the dumplings, other than perhaps dessert dumplings, were likely to have meat in them.

Madhu asked specifically for vegetarian dumplings, and the four vegetarians seated at our table were provided with one dumpling. This was not the veritable feast that the carnivores were planning to enjoy. After explaining again the situation, the kitchen sent out more vegetarian dumplings, some bowls and about five steamer baskets. Then, everything started to break down when they brought out meat dumplings with them. The ultimate bad joke – the vegetarians won’t eat meat, and can’t tell which dumpling has none, and the omnivores would prefer to get the meat dumplings but keep randomly getting a dumpling stuffed with broccoli instead.

Somehow, we all managed to survive dinner craziness, and ventured out to explore Xi’an. Some of us went for 50¥ massages (7RMB to the dollar), and some went up the Drum Tower or walked around in the evening air.

Xi’an has the feel of a city that is lived in. Beijing is very nice and quite impressive, but the parts of it that we saw were sanitized and perfect. It was nice to see people eating dinner on the sidewalk outside their apartments, seeing two chickens in the street, and an actual pile of bricks for an unfinished sidewalk project. Madhu, Shefali, Amit and myself agree that Xi’an feels much more like an Indian city, while Beijing feels much more modern. I just feel that the atmosphere here is much more open and friendly and much more of a busy, working city, where people take the time to enjoy each other’s company over dinner on the sidewalk.

China Study Tour: September 11 in Xi’an

One of the things I enjoyed about being in China at this time of year, and in India last year is that I was not in the country on 9/11. I have not been in the country four times now in the past nine years, and that’s the way I like it. It was such a transformative day, both in terms of the American psyche and the American spirit, and in terms of what it represents to me, given the events that occurred as a result of those deaths and the destruction of the towers.

Last year, we were in Mumbai on September 11, and we were visiting the Times of India. They had lost employees and friends during the terrorist attacks there, and it was in some way comforting to share a moment of silence with them. I feel that 9/11 has become so politicized in our country that it is impossible for me to watch news coverage of its anniversary. It is also too painful to see the footage that is played incessantly of people dying. I do not wish to see their deaths as some form of news entertainment for the sake of ratings. They are more valuable than that.

I believe that the best we can do for those who died is honor what it means to be American – what the terrorists were trying to obliterate, and what they have succeeded in obliterating for some portions of the population. The complaints about our actions throughout the world during the past 50-60 years in the name of “capitalism” and “democracy” are in a number of cases reprehensible. But we also are a representation of what it means to be intellectually and politically free people, and that is what I want to remember on 9/11.

Saturday, September 11, 2010

China Study Tour: Here Lies Ozymandias, King of Kings

In 1974, a few Chinese peasants discovered the Terra Cotta warriors while digging a well in a field. The Terra Cotta Warriors are the warriors meant to accompany the First Emperor of Qin (Qin Shi Huang Di) into the afterlife – so that he could conquer it too, presumably. They are comprised of infantry, archers, cavalry, and charioteers. The Emperor Qin had them built in the latter half of his time as emperor, and they were smashed up shortly after his death in the peasant rebellions.

Percy Bysshe Shelley wrote a poem called Ozymandias:

I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip, and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.

This is the terra cotta warriors. There is no historical record of them, they had simply been forgotten about. It must be one of the most mentally damaging occurrences in the world to believe that you are something on the level of a divine being. But if there is an afterlife, and if he could still see this one, how grating it would be to watch everything you believed defined you to disappear into the sands of time.

China Study Tour: The night train to Xi’an

Our berths for the night train were four to a compartment, but because we’d not booked as soon as the tickets were available, all of our berths were upper bunks. For most of us, this posed no problem, as we’d had the experience before, but I can see how it would be disconcerting to sleep so closely to strangers if you haven’t done so before.

Since it was P.J.’s birthday, we had a celebration with yummy cake in the dining car. I honestly think there’s not much more fun than traveling by train, although traveling by train with typical luggage is not my idea of fun. If I’d fully realized – oh, train! – I would have brought my backpack and done the usual hiking pack on the pack, small pack on the front Euro tour sort of method of transporting luggage.

Our bunk mates had a friend in the compartment next to us, so Tami and Katie suggested a switch, but apparently the top bunks are not desirable. Personally, I feel more comfortable in the top bunk. It takes a lot of effort to get up there, and once you are, it’s hard for anyone else to get up there. They were very gracious about my large bag that had to go between them, because it wouldn’t fit under the seat.

One of the things I love about sleeping on a train is that it’s basically a noisy rocking chair, all night long. This means better and longer sleep (if you’re the kind of person comforted by the movement of a train). I awoke refreshed, with an amazing head of bed hair. I ventured to the breakfast car to find other amazing heads of bed head.

Upon arrival at the Grand Noble Hotel in Xi’an, everyone got some food, then everyone took showers. Night trains are all well and good, but our stink radius was reaching 2-3 feet by that point.

China Study Tour: Hot weather, hot taxis, and getting some real answers

It’s Friday morning and our last day in Beijing. We arrived this Sunday, and have had a very full week so far. Today, we will go to the Forbidden City in the morning, and we are all splitting off in the afternoon before meeting at the hotel lobby at 7:20pm and catching our train to Xi’an. Just a side note about this hotel – it is not impressive. There is no room service menu, the rooms were by turns dirty, and our TV didn’t work, not as though we actually had time to watch it. But still not my idea of 5-star. Okay, rant over.

The Forbidden City is much more enormous of a complex then I originally expected it to be. We were late arriving, and late getting in – Peter said that it was quite possibly the fastest tour he’d ever done, rushing through the Forbidden City in an hour. I have to say that the renovated parts just look new and cheap. While it’s still beautiful, it doesn’t have the patina of age, and thus isn’t as impressive as the parts that haven’t yet been renovated. However, knowing the Chinese government, I’m sure there’s plans in the works to cover the entire complex with new paint. By the time I got through the Forbidden City, I was soaked in sweat, and hoping that my sunscreen-less skin could successful handle the bright sun.

Peter and I took one auto-rickshaw and Rubina and Suna took the other back to the hotel, while others in our group walked back. By the time we reached the hotel, my pants were sticking to my legs. It is astounding how much one sweats.

I left to go shopping after we checked out, and sweated some more while getting ripped off buying cheap Chinese goods. I’m perfectly happy with what I paid, but I know it was way too much. Still cheaper than buying at home. Plus, I got a great deck of cards with Mao as the Joker. That, I think, is brilliant.

I caught a taxi to take the “15 minute” ride to Ocean International Center to meet my colleague Jing at the Amazon.cn/Joyo building. This turned into an hour long taxi ride in the heat because the taxi driver thought he was lost, even though he initially took me to the correct building. I was ridiculously sweaty again by the time I finally arrived, a half hour late. I did enjoy the taxi driver’s musical choice though: “If My Heart Had Wings” – some sort of American country song.

I had a wonderful chat with Jing. I asked her a few questions about things that had been bothering me.

Q: Where are all the homeless people?
A: If the police find any homeless people, they will check who they are, notify their family and ask them to come and get them. If the family can’t come and get the homeless person, they will be sent back to the village, ticket paid by the government.

Q: What are housing prices like?
A: For a 100 sq meter apartment building, it could cost 30,000-40,000RMB per square meter, meaning that an apartment the size of my first studio in Seattle would run about 3,000,000-4,000,000RMB to buy (at approximately 7RMB to the dollar).

Q: What was the deal with the ENN presentation?
A: I (Jing) went to such a place in Mongolia, showcasing milk production. The cows were outside in the grass, and the machines were clean and lined up. But, these are the public versions of the facilities.

Q: Why were you taking a tour of a milk production facility?
A: In China, anyone can take these sorts of tours as a tourist destination. I was in Mongolia on vacation with my family to see the grasslands and desert, and thought it would be interesting.

On my way back to the hotel, it took 15 minutes to catch a taxi, and when I said Beijing Hotel, the taxi driver said, bu yao, bu yao! Which means, No, I don’t want to. However, I was already in the taxi, so he took me for awhile. But, traffic was really slow, so he suggested that I take the subway, and dumped me off on an offramp, at which point I had to jog down the offramp, then cross four lanes of traffic to get to the sidewalk that led to the subway. Ridiculous. However, I made it…. With five minutes to spare.

China Study Tour: Beijing as a tourist

One of the things that struck me most in India, and is also very clear in China is how very aspirational most of the population is. On the road to ENN, there were many nice vehicles – but there was also a massive traffic jam that delayed our arrival well over a half hour. The traffic in Beijing is atrocious. It’s the kind of traffic that makes you want to poke your eyes out – but only want, as you do eventually get to where you’re going.

Fashions here are really quite funny. On Thursday night, we went to Coco Banana, an aspirational club in Bar street. I say aspirational because most of the people who were there didn’t seem to be there because they were anyone special, but it was definitely a see and be seen sort of place. Tami said that she hadn’t had so much fun people watching in quite some time. My favorite was the guy wearing a leather vest – only the vest – with a slicked back low curly ponytail, white belt, and tight club hipster pants. Runner-up was the Chinese hipster hick – big aviator sunglasses, white beater rolled up at the waist, and a baseball cap.

Before going to the club and giggling at the patrons, some of us went to the Olympic stadium park to see the Water Cube and the Bird’s Nest. Those are some truly amazing buildings. I very much enjoyed being able to see them up close and not just on TV watching Michael Phelps kick everyone else’s butt. Go Michael Phelps! Anyway, the architecture is definitely a theme here – the CCTV building is also an amazing and interesting structure.

There is significant anecdotal evidence of European influence in the area. I saw a number of cargo containers on the highway for Merck or Hamburg-Süd, and I keep hearing German and French from other foreigners walking around the city. I haven’t actually seen all that many Americans, compared to the numbers of Europeans I’ve seen so far. Maybe I’m not looking in the right places.

China Study Tour: U.S. Embassy

As much as I like to complain about my country, I am, like many Americans, very patriotic. There would be no sense in complaining unless I actually cared about the place that I live. So, it was really fun to see and visit the U.S. Embassy in Beijing for that reason only – seeing the Great Seal of the United States of America. It took awhile to get inside, though, due to security measures. Since my name was submitted with my old name, it was confusing to the officers. Three of us in the group have different names, due to marriage, and apparently this completely threw a monkey wrench into their well-oiled security machine. In all seriousness, though, the security was quite good just to get inside to see the Marine military guard. The doors are strong, and there are multiple doors to get through before you’re inside. It makes me feel happier about the level of security that our diplomats and local staff enjoy when working at the Embassy.

The presentation by Rosemary Gallant of the U.S. Chamber of Commerce was the most candid and realistic picture of doing business in China that we’d seen or heard . She was very clear about what the U.S. government could and couldn’t do in terms of facilitating trade, advising companies, and working to improve the balance of trade. Being there made me want to apply for the Foreign Service again.

Some of the most interesting things she told us:
- 30% of the water supply is contaminated
- 20 new nuclear sites are under construction (none have been approved in the U.S. since Three Mile Island)
- There are 53 open positions in Rosemary’s team, but she has only 40 employees due to the hiring freeze
- 70% of healthcare costs are incurred by urban population, but 70% of the population is rural
- All Americans visiting China should assume that they are being watched, and their goods are subject to snooping at any time

Overall, the visit to the Embassy painted the clearest picture so far of what American businesses would really need to deal with when doing business in China. Also, the bathrooms were standard American bathrooms – it was heavenly.

And I didn’t see any pictures of children or butterflies anywhere.

China Study Tour: ENN – Butterflies and Children

The visit to ENN was interesting for a number of reasons, not the least of which was that it was very clearly a marketing presentation. The first place we went into was a very expensively decorated room, with TV screens and interactive display. The history of energy usage was told in the “progress” perspective, and was concluded with a presentation on “clean coal.” After the visit, I discussed with some of the others on the trip that there really isn’t any such thing as clean coal – just potentially less dirty coal. I understand they’re using “clean” to refer to the burning of the coal, but I think that any “clean” energy technology needs to be viewed in aggregate before saying that it is, in fact, clean. Upon leaving the first building, we saw a video of children laughing and butterflies.

The second manufacturing site we visited was for solar energy. This was actually quite fascinating, as I didn’t realize that solar panel technology has changed so much in the past decade. No longer is a clunky large silicon based panel necessary; thin-film technology fits between two sheets of glass. Potentially, an entire high rise could be powered only by its windows. Even here, though, in such a high-tech area – and there were a lot of machines, this was not a labor heavy manufacturing center – there was a leaky roof, and a sketchy walkway that made people in the group feel slightly uncomfortable walking on it.

The last area we visited was the algae facility. This was merely a demonstration facility, the real gas production from algae facility is in Inner Mongolia. The machines looked a lot like flash pasteurization machines that I saw at Beecher’s cheese in Seattle.

Overall, the work they’re doing is very interesting, and it’s good to see that China is so concerned with green energy and green technology. I simply found it rather suspicious how impressive and developed the presentation was – and there were five other groups that day other than us – and it makes me wonder what exactly they aren’t saying.

China Study Tour: Joint Session with Beijing International MBA students

Wednesday afternoon, we had lunch and a joint session with the “cream of the crop” of the Chinese education system for business. The lunch was absolutely delicious, and for me was much better than the spread last year in India at Christ University, because by the time we’d gotten to Bangalore, I was thoroughly sick of Indian food. I’m still quite happy to munch on Chinese food, so this lunch was lovely.

There were probably a two-thirds/one-third mix of Chinese to international students in the International MBA program. In the Indian joint class, there were thirty plus students, only two women, and all Indian. The gender balance was fairly even in this program. In our group, we had two Chinese men and a Spanish woman. I felt they could have been more prepared and didn’t seem to me to be any more special than we were in terms of our analysis, and yet the expectations had been driven very high for this group of students.

We continued to discuss VanceInfo, and the group came to the conclusion that while VanceInfo didn’t really have the ability, from an internal management expertise level or from an experience level to do so, they needed to move up the IT services value chain in order to service long term. This is especially important due to both of their reasons for competitive advantage. As a Chinese company with whom to form a long-term strategic partnership, a company would want to potentially get more out of the relationship than low-level testing services. Further, as the yuan appreciates against the dollar, the cost advantage enjoyed by China will be usurped by Vietnam and other lower-cost competitors.

Overall, I thought the students were well-spoken, but their English was about a 7 on a scale of 1-10. Most of the English we’ve encountered in China so far has been at this level.

In addition to the joint session with the students, we had a talk from the Chinese entrepreneur running out tour, Jennifer Pan. She has an undergraduate degree in Chemistry, a graduate degree in computer science, an MBA, and is now working for herself setting up tours for business schools in China. Her talk focused on the importance of knowing yourself and following your passion. She said that getting up every day for work in the U.S., and being part of the rat race actually takes more courage than what she is doing because you have to force yourself to do something you hate in order to make the life you want to live. While I partially disagree, in that I don’t really mind my little part of the cube farm (and I have a window), it is true that in the pursuit of so much stuff – the American “dream” of ownership, almost indiscriminate ownership of things, it sometimes seems – we lose track of what it really means to be human.

China Study Tour: Bring me a pig! – The Red Queen

This morning, we are going to the Summer Palace before having a joint class with BiMBA students regarding the VanceInfo case. It was built by the Empress Cixi who had much in common with the Red Queen from Alice in Wonderland, that I could see. If any other monarch was less concerned about her subjects and more concerned about herself, I don’t know if you could find her or him easily. There are probably a lot that are unconcerned with their subjects and more concerned with themselves; however ,this particular level of unconcern led to China having no defenses when the English and French chose to forcibly open China in the 19th century.

The Summer Palace is a beautiful place, located on a man-made lake. It is a very large lake. Cixi was carried around the complex on sedan chair (of course). It has one of the longest promenades in the world. It was probably one of the most peaceful, restful places we’ve been so far on the trip.

One of the things I found highly ironic about the whole thing is that at the end of Alice in Wonderland, Alice decides to send her father’s shipping venture to China. So, in both cases, the Red Queen loses.

China Study Tour: “I am not for the nunnery”

This evening, we were treated to two excerpts of Chinese opera, a selection from the Cantonese opera “The Scholar and the Maid” and a Beijing style martial arts opera, “The Monkey King.” “The Scholar and the Maid” tells the story of a young girl from a nunnery who decides that she needs to follow her heart and pursues the scholar Pan, her one true love. It’s a comedic play, with the facial expressions and tones of the music telling the story. “The Monkey King” excerpt was the section where the Monkey King fights twelve fighters. This was interesting for about ten minutes, but not much longer than that. Give me a smart, well-performed comedy any time.

Overall, I have been struck by the very clear differences between China and India. The roads in Beijing are very good, no potholes and traffic moves most of the day, albeit slowly at times. There are virtually no homeless people in the city, and very few beggars even. There is some truly amazing architecture here as well, partly for the Summer Olympics in 2008, but also it seems for regular commercial buildings.  In all, from an initial view perspective, Beijing is much more developed looking than New Delhi.

China Study Tour: VanceInfo

Our first impression of the VanceInfo offices was that they were very unprepossessing. One of the ways that I like to judge the overall wealth and success of a business in a developing country is the quality of the bathrooms, particularly the women’s bathrooms. A newer, lower-revenue company will have squat toilets only, whereas a newer, more expensive building will typically have western-style toilets. VanceInfo had poorly appointed squat toilets.

We were ushered into a very sad little room with tan crepe-ish drapes on the sides. It was incredibly hot. Our speaker was a soft-spoken American named Ken Schulz, who had been living and working in China for a number of years after getting laid off by HP after the first dot.com bubble burst and outsourcing was ramped up in earnest around 2000-2001. He gave us a marketing style presentation demonstrating VanceInfo’s phenomenal growth, and expansions of graphs for the case we studied prior to visiting the location.

The most interesting business aspects of VanceInfo are its growth, and its status as a Chinese-owned company on the NYSE. Just two years ago, when the Stanford case we read was written, there were only 5,000 employees at VanceInfo. When we went on Tuesday afternoon, Ken said that there were nearly 11,000. Entirely aside from the daunting HR challenges that would pose, this sort of growth is virtually unheard of outside of a developing country. The jobs for unskilled labor aren’t coming back to our economy, they are going to developing countries and are likely to stay there. However, VanceInfo does have offices in Seattle, San Diego, and somewhere else in the U.S., so perhaps growing Chinese and Indian outsourcing companies will start hiring locally in the U.S. as prices continue to rise in the home countries. The second important aspect of VanceInfo is its status as a NYSE traded firm. This allows it to offer stock based incentives to employees, and provides an important source of pride for the Chinese government. It is my opinion that this status will help it immensely in the coming years.

By the end of Ken’s presentation, no one was listening because it was so hot. There was no A/C, as apparently it was considered unnecessary, but if there isn’t to be A/C, there at least needs to be a fan. We took a tour of their other building, which was also A/C free, but at least had more airflow. I think by the time we left, no one was able to pay attention to the value of the information we were receiving because they were too overwhelmed by the volume of sweat stuck to the backs of their legs and the small of the back.

Also, apparently a “low voltage area” is a “weak electricity room.” I will never tire of reading amusing English translations.

Our case debrief in the bus focused on VanceInfo’s future prospects, as they offer a very low-end, not much value-added service to their partners. This is work that virtually anyone could do, so what is the reason VanceInfo would be chosen above anyone else? To be honest, there isn’t any reason other than that they are Chinese. They are low cost, certainly, but there are other low cost locations globally. VanceInfo is first and foremost a Chinese company, and this is the value they will add over a long-term partnership, which is the proper way to approach setting up a business relationship in China.

China Study Tour: Microsoft

Tuesday morning we went to Microsoft’s R&D Center at the Sigma building. We received a presentation from Yongdong Wang, General Manager of Search Technology Center Asia, meaning that he was responsible for the development and growth of the Bing search engine for China, Japan and Korea.

The presentation was very tech/future focused, as might be expected from an R&D facility. He focused on three screens connectivity, client and cloud functionality, natural user interface, Green IT and more.  The center currently holds 300 engineers, and their new campus will hold 5,000.

Yongdong showed us a chart of R&D spending by country for BRICs. It was interesting that while China outspent them all, nearly outspent them all combined, China doesn’t have the reputation that India does, and I would say that sending a job to China wouldn’t be any more guaranteed than sending it to Brazil, India or Russia – and yet, they have invested much more heavily in R&D and infrastructure. Perhaps this investment will pay more dividends in the future, but for now, they seem to be spending quite a lot for a minimal return on investment.

When asked about piracy and data privacy issues facing Microsoft in China, Yongdong stated that Hotmail’s servers are located outside of China, as is sensitive cloud data. He also said that if Microsoft were actually paid for the volume of Microsoft products in China, they would probably quadruple their current income easily.

After his presentation, we were presented multiple promotional videos by a young Chinese woman wearing hipter 80’s glasses. These videos ranged from 1-3 years old, so we questioned the “cutting edge” aspect of the work. Overall, I think it will be interesting to see what Microsoft comes up with in the next few years, as they have the cash to invest heavily in R&D in a variety of markets.

Monday, September 06, 2010

China Study Tour: Jinshanling

Normally, Madhu takes the group to the Simatai portion of the Great Wall, but it’s currently closed for renovations, so we have gone to Jinshanling. The trip there is to take between 3.5 to 4 hours, depending on traffic out of Beijing. We had been warned from the first Saturday class of the steepness of Simatai, the need to train, and so on, and provided pictures demonstrating the point. We were told by our study tour guide, Peter, that Jinshanling would not disappoint as a replacement.

Before heading up the wall, we had a traditional Chinese lunch. It was pretty much the same as anything one could get in my favorite Chinese restaurant at home, Shanghai Gardens, making me think that it’s more authentic than I thought. We had noodles, various types of veggies, sweet & sour pork, cashew chicken, egg drop soup, corn fritters, and watermelon to finish off. My favorite was the garlic bok choy. My favorite dish in Singapore was bok choy with oyster sauce or garlic bok choy, and it has been one of the things I’ve been looking forward to most, culinary-wise, as I’ve never been quite able to replicate the flavor or texture in stir fry at home. The spread is reassuringly familiar and there is virtually no spice. This will be a much easier trip for my stomach than last year’s sojourn to India. I still can’t even look at red chili without my stomach clenching in remembrance of red curry. Stir fry bok choy sounds wonderful to me.

These sorts of groups are apparently one of the only ways for farmers in the region to make money, so they attach themselves to one tourist each on their trip along the Great Wall. My guy’s name was Zhou, and he was from north of the wall, and he is ethnically Mongolian.

Just the walk to get onto the wall was quite steep, and we’d driven very close on the bus. Actually being on the Great Wall was amazing. You could see all of the nearby peaks and could view dozens of guard towers before the wall disappeared into the gray-blue sky. We were there the same day as a cooperative marathon between Chinese and other nationalities. From what I could tell, mostly Germans were participating, and these folks were running a marathon along the Great Wall in sweltering heat. I commend them. Many of the non-Marathon tourists were also German, although I noticed a few French and Americans not with our group. I will use this as anecdotal evidence that Germany is recovering from the recession faster than everyone else, and will not listen to any protestations that that is completely anecdotal and can’t really be relied upon. All of the Germans, and speaking to a couple of them, made me a little homesick for Austria. I haven’t been back since May 2008, and it is my second-favorite place in the world, outside of Seattle.

Madhu wanted to make it to the thirteenth tower along the wall from the Jinshanling. However, from what I heard, Tami and Seu-jin decided to run the wall instead, and they went further, thus necessitating that Madhu go further as well. I did not participate in this portion of the Great Wall entertainment, having been nursing a particularly nasty travel migraine all day. Rubina’ and Zhou helped me get to the third tower, at which point I had to decide between my pride and my body, and my body won out. Still and all, I made it to the third tower, got some amazing pictures, and have gained a new appreciation for the sheer scale of what was accomplished when this wall was built without the benefit of any modern machinery.

China Study Tour: First Impressions

The road from the airport provides a marked contrast to the road from the New Delhi airport in India. For that trip, we shared the road with all manner of conveyances, including oxen, multiple combinations of bicycle usage, pedestrians, and hand-drawn carts. This was a proper highway, with a wide variety of cars.

From the bus windows, I could confirm what I had viewed from the plane, the widespread communist influence in architecture and city design. This is something seen frequently in Eastern Europe: exactly the same ugly high rise apartment building five times in a row. Occasionally, one could also see an exceptionally ugly concrete structure that could only have been built during China’s more austere days. For the most part, though, China reminds me most of Eastern Europe than any other place I’ve been. They seem to be working as hard as they can to shed their Communist aesthetic and embrace the new cars, bright paint, and shining lights of the typically Western cityscape.

On the way to the Beijing Hotel, I learned that Buick is apparently a prestige brand in China, I saw a number of brands of vehicle, from Peugeot to Audi, to Ford, Jeep, Hyundai, Volkswagen – one could probably find nearly every brand of car imaginable on the highway from the Beijing Airport.

When we arrived at the hotel, we passed Raffles Beijing Hotel, which gave me a momentary pang of remembrance for Singapore. The only place I’d truly felt comfortable and happy there was reading a book in the courtyard of Raffles Hotel, a stately European style hotel named after the Raffles that half the downtown seems to be named after. This Raffles is also stately and European in styling, although not nearly as beautiful or inviting as the Singapore Raffles in terms of the foliage and location of the hotel. The interior of our hotel reminds me of an old lady who has put on a lot of jewels to try to hide that she has gotten old. The rooms increased my opinion that this was, in fact the case. The windows are double paned windows of the style that were in my 100-year-old Austrian apartment building, and the styling is also older. The beds are incredibly firm, and nearly everyone has had problems with a lack of cleanliness in their rooms. Relatively speaking, they’re clean, but a 5-star hotel in the States or Europe would not have flecks on the toilet upon arrival, or questionable still-sticky stains on the carpets. It’s a classic hotel, but not quite as nice as the similarly appointed hotels we stayed at in India.

We took an evening walk to Tian’anmen Square to stay up a little longer and perhaps put off worse affects of jet lag. There are very few street people in Beijing compared to any city in India, even compared to Seattle. All of the street people we did see were selling cheap knick-knacks or playing music, there were no outright beggars that I saw on the way there and back. As I am sure there are many homeless and destitute in Beijing, I conclude that they must have been moved elsewhere.

 After our walk, the group splits up, some to experience the Night Market and see scorpions on a stick, and some decide it’s time to give in and get some sleep. Tomorrow, we travel to the Great Wall.

China Study Tour: 1 confiscated water bottle, 2 packs of M&Ms, 21 fellow study tour participants, getting through security with a box-cutter: priceless

I hate airport security. When I arrived for my flight on Hainan Airways, the check-in staff seemed apologetic that I had to wait even the five minutes that I did, and there was a literal red carpet for the business class travelers. They were polite, efficient, and fast. Security was also fast, but polite and efficient is definitely stretching the definitions of the terms. I got an admittedly cheap water bottle on my recent trip to Sitka, Alaska. However, it was my water bottle, and it was my souvenir, and it posed no terrorist threat whatsoever. I find that airport security makes me feel angry, harassed, and not at all safer, especially once I discovered that while my cheap water bottle had been confiscated, the box cutter in my purse apparently wasn’t an issue at all.

After submitting my pre-departure paper from the gate waiting area (Madhu only said before we fly out…), I grabbed some snacks at Hudson News along with a neck pillow. I found on the plane, however, that while the peanut butter M&Ms were as yummy as they always are, the neck pillow was not a brilliant investment. Hainan Airways has quite possibly the tiniest seat dimensions of any airline I’ve ever flown on. When I, a 5’5” female feel scrunched and uncomfortable, I can’t imagine how the taller guys in our group are feeling.

Customs and Immigration in China provided a marked counterpart to American security. In fact, the customs folks even had satisfaction buttons at their stations. I could express my pleasure or displeasure at the quality of customs arrival! I want one of those for security at home.
The first place everyone in the group noticed upon arrival was the KFC and Starbucks. While no one went for the KFC, Starbucks provided an allure that was nigh irresistible – cool, delicious coffee drinks. Somehow, even though I ordered a caramel frappuccino, I got a caramel cream frappuccino, which is more like an iced blended milkshake than a coffee drink… so there were some communication issues, but a cream frappuccino is still refreshing after a non-stop Seattle to Beijing flight. Everyone else got the coffee they wanted, and apparently the only difference is the taste in soymilk.

Somehow, our second professor Rubina’ was stopped in Customs, we are assuming because her passport is in Urdu. So, while we waited, we observed all the people around us. My favorite was a young  Chinese guy dressed like the Situation from Jersey Shore. There was also a sign for “Familie Kuh” – Family Cow in German – which made me giggle. When Rubina’ finally arrived, there was much cheering and imaginary champagne toasts. We had all arrived safely in China.

My name is Rachel Greer, and I’m writing the student blog on behalf of the China Study Tour 2010 for the Albers School of Business at Seattle University. This blog will include the group activities and experiences on our trip, as well as my personal reflections and impressions. I hope you enjoy learning about China through our first-hand experiences.