Archive for October, 2006
October 18, 2006 at 8:06 pm · Filed under Uncategorized, Entrepreneurship & Business, Business Climate
This article about shopping malls and luxury retailers in China both confirms and counters some of the statements I made in my post entitled Business in Shenzhen. This article from the International Council of Shopping Centers, titled THE HIGH-END ROAD TO CHINA: Western luxury retailers are finding a fertile market in China’s wealthy consumers asserts that the Chinese are indeed consuming luxury goods, contrary to the article about Shenzhen:
Jewelry from Cartier is hot. So are Burberry coats, Armani suits, Prada bags and just about anything made by French luxury juggernaut LVMH. There is demand even for the flat-out frivolous: Bejeweled Vertu cell phones — at prices ranging from $5,000 to $90,000, depending on their degree of ostentation — are selling briskly. … China is now the third-largest consumer of high-end goods in the world, accounting for 12 percent of the market, says a report by Goldman Sachs. By 2015 that could rise to 29 percent, the investment bank says.
Actually neither article is necessarily wrong. The Shenzhen article talked about consumption by the middle class, whereas this passage talks about consumption of luxury goods, only those items afforded by the truly wealthy. When these distinctions are made, both are articles are indeed correct. As the article indicates, China has a class of newly rich (from tech stock and other IPOs to real estate to the selling off of government assets):
[T]he number of millionaires [is] rising fast (Merrill Lynch estimates that there were just under 400,000 of them at the end of 2004)…Ernst & Young published a report last year on the Chinese luxury market that says 13.5 percent of China’s consumers can afford luxury items. Most of these are between 20 and 40 years old and have a “spend now and worry later” attitude, the report says. The most active consumers are men.
This is indeed true. When you look into the very high end stores it is almost always a man purchasing something for a lady. Rarely does the lady shop by herself. And they are buying, not just browsing.
The nouveau riche may be into luxury purchases, including $200,000 Ferraris (according to the article), but general consumption is typically driven by having a larger middle class. But China still lacks a substantial middle class. This is why some of the more mid-range malls, including those featuring brands such as Nike and Nautica (as mentioned in the Shenzhen article), aren’t selling much. But as China’s economy continues to grow and become more modernized, it is expected that China will develop a larger middle class, will spending power equal to or greater than that of the US. Thus hundreds of global companies, from retailers to clothing brands to restaurants to beauty and health care products have entered China in full force. Those who can build a successful brand name, protect their IPR, localize themselves in the culture, develop customer loyalty, and compete in this hyper-competitive market may still be able to find profitability over the next 5-10 years on the eastern coast and 10-15 years for places farther inland.
October 18, 2006 at 12:13 am · Filed under Uncategorized, Knowledge and Experiences
As a follow-up to my blog about the Chinese people’s serious lack of interest in international relations, I’d like discuss an exception to that: Chinese people always have a very definite response to and opinion for questions about Taiwan or Japan.
Once I casually suggested my Taiwanese friend as coming from a different country than China and I was met with some serious furry from my Mainland friend who insisted the two of them were from the same country. In Mainland China its a well-known fact that Taiwan is part of China. It is not even possible to argue with a Mainlander (especially one who has never left China) that Taiwan is a separate country. But then I ask, how can Taiwan citizens and Hong Kong people and residents of Macau have different passports than those of Mainland China? (Of course, the HK & Macau situation is much different than that of Taiwan, but its still an interesting thought…) As was discussed with the confiscating of the Lonely Planet-China books, China bans any news or materials that might suggest something other than Taiwan firmly being a part of China. Because of this, it’s impossible to question a Mainlander about the country status of Taiwan. To some extent, the Chinese people have again been brainwashed into believing that Taiwan is unquestionably a part of China. It’s taught in schools, it’s reinforced through censorship and media, and it’s asserted daily through Mainlanders telling any Taiwanese they encounter, ‘No, you’re not Taiwanese. You’re Chinese. You’re one of us.’ In fact, just yesterday, I read something in English that said Taiwan is the largest island of China. If, to Mainlander’s knowledge, Taiwan were to suddenly become an independent country one day, I believe all hell would break lose. Either it would become painfully obvious to all Mainlanders the government had been lying to them for years and would seriously destabilize the government or China would move very quickly to reassert its authority over Taiwan to prevent western Chinese provinces from making moves similar to Taiwan’s. Let’s just hope this situation can all be managed smoothly without daft action on anyone’s part: Mainlanders can remain in naive nationalistc bliss and Taiwan can remain (mostly) independent.
Mention Japan to a Mainland Chinese and get ready for an earful. They’ll spout off opinions ranging from blatant hatred to uncomfortable distrust to honest admiration. The official party line is that Japan perpetuated war crimes against Chinese people (during the Second World War, for example the Rape of Nanking), but the more problematic issues are that Japan is trying to revise its history book, and (until the election of Japan’s new Prime Minister) Japan’s leaders were still visiting a war shrine erected to honor those who committed the crimes against Chinese people. This last part, of course, requires its own separate condemnation, but can the Chinese government really continue to pollute the heads of its children into thinking all Japanese are bad? How do you encourage positive relations with one of your neighbors when you are leading your children to be racist on the grounds of something that happened more than 50 years ago? Let’s consider one of the worst episodes of genocide recorded in modern Western history: that of Nazis over the Jews in Germany. You don’t see the Jews telling each other all Germans or anyone of German descent is bad, do you? You don’t seem them creating propaganda to teach hatred of an entire race of people. What about the Turks and the Armenians? Well, maybe that’s not a good example. Destructive periods of history are meant to be learned from, not carried throughout generations to continue to perpetuate hate. When, through the school system, the Chinese teach the youngest members of their society to hate, what are they hoping for? Retribution? Prejudice? Whatever the government seeks (mostly an apology and for Japanese govt officials to stop visiting the war shrine, as well as its destruction), won’t come through teaching their children hatred. Fortunately, many better educated Mainlanders have been able to see beyond their narrow-minded education; they understand the importance of tolerance, respect, and communication with their largest trading partner.
It is interesting to consider the strong feelings Chinese have toward the Japanese in light of the success of and affinity for Japanese products. Everything from electronics to cars to anime to clothing styles to Japanese food is very popular in China. Obviously, or else how would Japan be China’s biggest trading partner? However, purchasing or enjoying Japanese-made items is not without its consequences. For example, my roommate owns a Honda and some of her friends criticize her for owning a Japanese product, scowling at her for supporting the evil-doer. And in the end, they refuse to ride in the car. Although my roommate is well-educated and open-minded enough to be willing to buy Japanese products (she also has a Sony laptop), she still has no friendly comments for Japan. She understands what’s history, versus what are well-made goods but I believe she too, has been too indoctrinated in the Chinese education system, and so she does at some level still seem to hold a grudge against the Japanese. (Love you Jocelyn, nothing personal, just commenting on the education system.) It is interesting to note that if you ask anyone who has traveled outside of Mainland China, the most often visited location after Hong Kong is Japan. Many school trips travel to Japan each year. I wonder what they tell the students on the trip? Here are the savages who killed 30million Chinese during World War II?… It is also a curious fact that the 2nd most common foreign language taught in China (after English) is Japanese.
Over the weekend, I was chatting with a couple of Japanese ladies who live in Shanghai. One commented (with only a slight hint of humor) that China is a dangerous place for Japanese. And I responded that I could see that. The other Japanese lady, however, disagreed. She said that Chinese people were smart enough to know that what the Japanese government (did) does is not a reflection of Japanese individuals. Based on my conversations with Mainlanders about Japan, I would say they may be smart enough to separate the government from the people in their mind, but too much education and govt propaganda has overruled rationality.
As Japan seeks to alter its textbooks to indicate it was the true victim of World War II, there has been a Chinese out-lash against Japan. Perhaps, its just that I’ve arrived in China during a turbulent time, when tensions between the two nations are running high and emotions are readily converted into opinion, but it seems both sides are going down the wrong path. Teaching hatred in school will never turn out well, neither will paying homage to a violent past. Unfortunately, I can’t control what is taught in schools in China or in Japan, but only hope that influential leaders in both of those countries will see the error in teaching hatred or false victimization and instead teach open-mindedness so that their children can build a better, more cooperative future with their important neighbor across the Japan Straight / East China Sea.
(I wonder how long I can keep writing these types of blogs about China’s censorship and other issues before I get my website blocked in China.)
October 16, 2006 at 12:03 am · Filed under Uncategorized
As the situation with North Korea gets murkier, you have to wonder, what is China really doing? China’s usual response is, ‘China hopes for a good resolution to the matter.’ But when their own neighbor is supposedly testing nuclear weapons, can China really stick by such a non-committal answer?
When asking the average inhabitant of Shanghai, ‘what do you think of the situation with North Korea and the UN?,’ you are met with blank stares. When asked, ‘what do you think of China’s moves in the UN?,’ Shanghai inhabitants have no answer. Or ‘what role do you think China should play in peace-keeping in Asia?,’ Or ‘What role should China play in the global community?’ Or ‘How should China manage its increasing importance in world affairs?’ All are met with no response.
Why do inhabitants of Shanghai find it so difficult to even muster a response, let alone a concrete opinion? As far as I see it, there are two main reasons. First, press is–as well all know–tightly regulated. There’s not much information available about the situation. There’s no political commentary from editorial writers. There’s no difference of opinions to generate discussions. Simply put, there’s no opinion to have. For the most part, the citizens of Shanghai are happy to agree with the government’s official opinion: ‘China hopes for a good resolution to the matter.’ It’s a positive, but non-committal response that all Chinese can get behind. The second reason, as explained to me by my roommate, is that those in Shanghai only care about money. Everyone in Shanghai is primarily concerned with the economy: they all want more money, a better life, more time to shop, and further economic development. But to what extent are these actually the people’s wishes? Of course, who’s going to complain about more money or more opportunities to shop? But at some level, the people want this because the government tells them they want it, because the govt pushes for further economic development, because the govt tells the people, you are Shanghainese, you must lead the way to economic prosperity. Therefore, when considering these two reasons together, it seems that despite the fact that Shanghai is a long way from Beijing, the government, through media controls and policies, actually exerts a lot of influence on attitudes and opinions in Shanghai. Is it possible that in a city of 17million people, so few have thoughts of their own?
To continue with the North Korea (DPRK) topic and the US’s attempts to pressure Beijing into complying with the UN Resolution that they recently signed, which would require all nations to inspect cargo ships entering or exiting DPRK…The Shanghai Daily reports:
[Foreign Ministry spokesman Liu Jianchao] said China is resolutely opposed to the nuclear test by the DPRK and determined to achieve a nuclear-free Korean Peninsula peacefully through dialogue and consultation.
I’m pretty sure we did the ‘dialogue and consultation’ thing for a very long time, and no one (especially not China, nor North Korea, two very stubborn countries) could agree on anything. And yet, we find ourselves, months later, facing an even more imminent DPRK nuclear threat, while the Chinese want to wallow in their meekness, as “Liu said China hopes the resolution will peacefully solve the issue.” A resolution does not peacefully solve any issues. A resolution that includes definite sanctions that are fully enforced, may impact the situation, but a resolution itself will certainly NOT ’solve the issue.’ By comparison, at least these 2 countries aren’t spineless:
Japan and Australia promised yesterday to enforce the sanctions immediately and said they were considering harsher penalties of their own.
The China Daily, at least gives Liu and China a little bit more credibility through showing his direct language:
“China resolutely opposes the DPRK’s nuclear test, insists on the denuclearization of the Korean Peninsula, objects to nuclear proliferation and insists on the peaceful settlement of the issue through dialogue,” Liu said. […]
“We appeal to concerned parties to keep calm and be cool-headed, take a prudent and responsible attitude to jointly prevent the situation from worsening and break the stalemate, so as to resume the process of the Six-Party Talks as soon as possible,” Liu said.
Prudence is definitely a good thing, as no one wants to piss off–in the words of Luke–a bratty child, with nuclear capabilities. Nonetheless, China, through the voice of Liu, still seems very wishy-washy. And may I ask, what incentive does the DPRK have to rejoin 6-party talks if they are a nuclear power when China can’t even get the guts to screen cargo ships? I think China needs to coordinate its voice on the issue:
Liu said the resolution will solve the problem, while Wang said the sanctions are not the final move. Well it doesn’t really matter since both of them are wrong: sanctions don’t make any difference without enforcement, and even then, the effect is mild at best.
On the other hand, given the impetuous nature of North Korea, taking a mild approach perhaps is necessary, as Pak Gil Yon, North Korea’s ambassador to the UN, said ‘that if the United States increases “pressure upon the Democratic Peoples of the Republic of Korea persistently, the DPRK will continue to take physical countermeasures, considering it as a declaration of war.”‘ In light of this, the US (and other countries) may be best, at least initially, to follow the clause written into the resolution that insists that nations “refrain from any actions that might aggravate tension.”
Despite the need for caution with the irascible North Korea, China needs to get itself fully on-board with the resolution, including sanctions and enforcement, in order to present a unified front that could actually peacefully influence North Korea. Let’s just hope China is a conscious and responsible enough nation to do so, such that Condoleezza Rice’s words may be true:
“You cannot underestimate how big a blow it is to North Korea to have all of the neighbors now, including what has been its strongest supporter, China, fully united behind sanctions against its nuclear program,” Rice said.
Like China, I too, hope for a satisfatory resolution to the issue.
October 14, 2006 at 8:03 pm · Filed under Uncategorized, Business Climate
When I was looking up a new mutual fund on Morningstar yesterday, I saw this article headlined:
Although the author makes it clear that he was only there for a week and therefore is no expert, he makes some very accurate observations. For example,
Speaking of consumption, I pity the American (or European) consumer goods firm that thinks its next big growth leg is coming from hundreds of millions of Chinese consumers. I visited one reasonably upscale mall filled with name brands like 
Columbia COLM , Nike NKE , and Nautica, that was thronged with shoppers. Unfortunately, very few had bags–they all seemed to be there for the experience and the air conditioning rather than the products.
Unfortunately for those consumer goods companies, this is true in Shanghai as well. As Shanghai is generally considered the richest city in China, followed by Shenzhen, if people aren’t buying American brands in these cities, there not buying them anywhere in China. However, I believe the theory is to go into China early, even as it continues to go through the process of economic development, to start creating brand recognition and association, so that the people have something to idolize and aspire to buy. That way when the masses do have the money, they will already recognize the American (or European) brand names.
The other problem with this situation is the soon-to-be overcapacity of shopping malls in Beijing and Shanghai. Mall developers see the glitz and glam of stainless steel & glass structures as well as upscale stores and so they take cheap loans to build build build. This creates a ripple effect as people are displaced, land becomes more expensive, citizens become angry because they can’t afford new homes, and either developers are disappointed when merchants don’t sign up, or merchants are disappointed when people don’t buy. To limit this, the government has started regulating loans for real estate development, but even that can’t curb the investment and speculation. But some do still suffer the hard way: the largest mall in China, and perhaps the world, was supposed to be built in Hong Qiao (Shanghai), but the developers ran out of money, so now it stands half-built, a blight in the area. Land speculation is big business in China, but as with anywhere, and even more so in China, due diligence is necessary, especially regarding the government’s recent attitudes and regulations.
And from my previous blog, to answer the question about Shenzhen’s population (it is far less than Vietnam):
Consider that Shenzhen had about 300,000 residents in 1980 and now has around 12 million, and the local economy has seen compound growth at something like 25% to 30% annually. (For comparison, the fastest-growing city in the U.S. over the same time period was Las Vegas, which merely tripled in size from about half a million to just more than 1.5 million.)
With that kind of growth in the economy as well as population, it’s disappointing more people aren’t buying genuine brand names. But then again,
it’s a very young city–I barely saw anyone over 40 during the week I was there.
This is generally true of the eastern China boomtowns. The young and able, but often poorly educated, leave the countryside in hopes of earning just a little more in the big, fast growing cities. And any extra money they do earn is sent back home to their families. China is also one of the largest saving nations in the world, so they’ll choose the cheaper alternative whenever possible. This partly explains the next phenomenon he discusses:
[T]he commercial neighborhood I visited the next day–which had lots of small shops selling locally branded or knocked-off goods–was mobbed with people actually spending money (judging by how many had shopping bags). From fairly bad iPod nano knockoffs for $20 to pretty decent fake Patek Philippe watches for $40, it was all there. … As the availability of $20 iPods and $40 Patek Philippe watches (both of which I was offered) might indicate, there’s not much hesitation in leveraging Western brands. I saw a local restaurant chain with a logo that looked suspiciously like an Asian Colonel Sanders, and in the lobby of the state-owned hotel where I stayed, there was a store called “Gulao & Shark,” which appeared to be a copy of an apparently popular sportswear manufacturer called “Paul & Shark.”
Gotta love the readily available fakes in China and the willingness of non-sophisticated consumers to buy them ::sigh:: Where’s some IPR protection and respect for brand names when you need it?
Starbucks, on the other hand, has been very successful in China, despite the fact that,
you can buy a good lunch for $1.50, but Starbucks SBUX coffee costs more than it does in Chicago.
Of course, Starbucks is always expensive, but I would expect Starbucks to tend to price according to the living standards or the country. Maybe Starbucks is trying to go SUPER-premium in China? Well, despite outrageous prices, Starbucks certainly has a lot of shops that are nearly always full in Shanghai. Wow, the success they have had, truly amazing. But definitely, you can get a decent lunch (assuming you don’t mind the service or the atmosphere) for $1.50. Although, even this price range is becoming harder to find in Shanghai, but it still certainly exists outside of SH & SZ.
This is an astute observation, as I discussed at length in my Xanga blog:
Almost without exception, the stores I saw were overstaffed by a factor of two or three compared with what we’re used to here in the States. Enter a store and you’re swarmed with polite folks eager to help. Why have so many employees help customers to buy so little? Because they’re so cheap it doesn’t really matter. After buying some beer at Carrefour, I asked which aisle had the bottle openers, and one employee scrambled to dig a (free) promotional opener out of a box somewhere while four others supervised and offered helpful commentary.
The difference is, he actually got service. Most of the employees I encounter in Carrefour just chat with friends, play on their cell phone, or twirl their hair.
To put this whole article in perspective and to make it more universally applicable to greater China, Pat Dorsey discusses:
how Shenzhen seems to be a microcosm of China’s development path as a whole. The city was one of the first parts of China to tap foreign capital eager for access to low-cost labor, so the first couple decades’ worth of growth were fueled by labor-intensive industries with relatively low value-added content. But wages have surged in the past several years, pushing some labor-intensive businesses further into the Chinese interior where costs are much lower. So, the local authorities are doling out financial incentives to tech firms and financial-services operations that can push the local economy up the value chain.
At the end of the day, this is the same challenge facing all of China over the next few decades. While there’s still plenty of infrastructure to be built, and large portions of the country that have barely industrialized at all, the country’s long-term future lies in creating things, not just assembling them. How well Shenzhen manages this transition from a labor-based economy with cost advantages to a knowledge-based economy with skill advantages could be one interesting leading indicator for the country’s development challenges as a whole.
What has been done in Shenzhen and Shanghai, will definitely set an example for the rest of the country. Let’s just hope the govt can learn from the mistakes and make improvements on the system as the rest of the country goes through its own regional economic development.
Will China’s transition to a knowledge-based economy built on skilled labor and value-added products surpass the US’s own capabilities?
October 13, 2006 at 2:46 am · Filed under Uncategorized, Knowledge and Experiences
Often I get asked, ‘how’s life in Shanghai?’ ‘Why Shanghai?’ ‘What are you (with the implied what the heck are you, a white girl) doing in China?’ Obviously I’m not here to find myself a petite, subservient Chinese wife. Nor am I an overseas Chinese returning to my homeland. So people are all the more intrigued by my presence, and are curious to know the answer, but as with almost any question in China, the answer is long and complicated and people rarely want to stick around long enough to hear the whole answer.My standard educational history/interview answer to the why China? question is: in college, I took courses in Chinese language and history, tutored Chinese students in English, and spent 7 months in Hong Kong, so I was already familiar with Chinese culture. Then as graduation neared, I evaluated my options and found nothing intriguing Stateside, so I thought I’d follow the big opportunity that is China and go there to see what’s possible and improve my Mandarin along the way. As for the answer to the why Shanghai? question: 1) My friend Irene invited me study language at SH Jiaotong Univ, 2) I’d already spent significant time in HK and knew I didn’t want to be there, and 3) The best opportunities for business and employment with a foreign company are in SH.
These are all valid and honest and pretty good reasons (I believe), but there are also deeper issues here. I have a certain need to be surrounded by a foreign culture. I need to learn about other cultures. I need to find out how other people live. I want to learn what other societies and other governments do better, and this type of stuff can’t all be taught in an academic environment. In some ways, I am a true wanderlust. I need to be out and about, out of my familiar environment. Traveling helps me clear my head, helps me see myself and my life with a refreshed view. This concept of voluntarily leaving my own culture and familiar surroundings may sound absurd to the provincialite, but to those who know what I mean, its a common feeling. The more removed from your own culture you choose to place yourself, the more profound your life experience will be. From this perspective, China actually sounds like a reasonable choice: culturally very removed from the US, yet relatively easy to travel in, as well as already possessing some ability to communicate.
When you put the standard reasons and the deep emotional reasons together, what the heck is the white girl doing in Shanghai? makes sense. I came for adventure, opportunity, life experience, and to become fluent in Chinese (so if anyone can recommend a good Mandarin teacher, please let me know).
As to the question, ‘how’s life in Shanghai?’ or ‘how you like SH?’ What am I going to say? It sucks. I hate Shanghai. And I cry myself to sleep every night hoping that my mom will let me come home? Heck NO. Sure there are good days and bad days and SH is far from the perfect city, but that’s true for anyone, anywhere. Some days I do think, what the heck am I, a white girl, clearly in the tiny minority, doing in a city of 17 MILLION PEOPLE, where I don’t really speak the language and don’t have any family? What was I thinking when I decided to move to China? I have no purpose, no business here. What am I doing? But other days… it seems completely natural to get up and take the bus to work and meet friends for dinner or attend a networking happy hour event. I can do all the same things here I’d do in the US or any other country. I’m just as much a part of the city as any recent Chinese immigrant from the countryside. Of course I look different, and people notice and comment as I walk down the street, but that’s all part of the experience. That’s part of the adventure I came for, of the life experience I came to get.
Sure, China’s not for everyone, but with the right attitude and a deep commitment to the language, culture, and people, China’s an exciting place to be during such a dynamic and fast-paced time. Best of luck to my fellow half-pats and ex-pats! I hope you enjoy your time here, I know I am!
October 12, 2006 at 6:11 am · Filed under Uncategorized, Knowledge and Experiences, Business Climate, Traveling
Well I got up very early this morning and so don’t feel like writing much tonight and think I’d only get myself in trouble if I made too many comments on the USC-Mayor of L.A. Breakfast Meeting I went to at the Portman Ritz-Carlton this morning. So on to other randomness…
Tonight I was reading some other blogs about China and came across an interesting situation. From fiLi’s blog on Lonely Planet:
tourists going to travel in China with the latest Lonely Planet book were asked to hand in their very expensive book at the border-crossing due to its ‘political nature’ showing maps of China which color Taiwan in a different color suggesting that Taiwan is not a part of China.
This report on the ban of the LP China books was further confirmed on Marc van der Chijs’s blog:
Ever tried to buy a Lonely Planet guide for China in China? Forget it…China it is not allowed to sell the Lonely Planet guides for China, Beijing and Tibet.
In my opinion, it’s rather annoying and extremely ridiculous, but not altogether surprising, especially considering some of the other things blocked/banned by the Chinese government. For example, WordPress.org (where I got this blogging software) is presumably blocked by the Chinese government, as is en.wikipedia.org, amnesty.org (this one’s certainly not surprising), and technorati.com (don’t understand this one). In addition, Shanghaiist discussed the AP article about blocking the Jay-Z concert:
China’s Culture Ministry has nixed a concert this month by rap artist Jay-Z at Shanghai’s Hongkou Stadium, citing a need to protect local hip-hop fans from nasty lyrics
I’m going to have to agree with Shanghaiist on this one, did the Culture Ministry approve the Black Eyed Peas concert? Did they attend the concert? Maybe so…maybe that’s why the Jay-Z concert was banned. I have to admit, both Irene and I were shocked with how racy the Black Eyed Peas concert was! So sad Jay-Z’s not coming. 
Oh well. Just don’t take my Lonely Planet!
From an Asian Wall Street Journal article about development and the economy in China:
If Shanghai were a country, it would be among the 40 largest economies in the world. Its economic output last year of $114B was bigger than the Philippines or the Czech Republic. Shenzhen, Southern China, has an economy much larger than Vietnam’s.
Of course, these comparisons are impressive when looked at out of context, but when you consider Shanghai has 17million people, compared to the Czech Republic’s 10million, you’d expect the economic output of Shanghai to be greater in order for the per capita output to be on par. The Philippines, on the other hand, is just disappointing. With 89million people and the densest city in the world, Manila (yes, I was surprised it beat HK, too), its no wonder Filipinos are becoming the world’s new service workers. Vietnam, too, is in a disappointing situation like the Philippines with its 84million people. Though I don’t know how many people are in Shenzhen, I’d guarantee far less than that. So it seems that those 2 countries can and should improve their per capita economic output. In this case, perhaps China can be the model. As my mom mentioned in her comment on my previous post, indeed, the Chinese government’s focus has been on economic development. And based on this information it seems the govt has been very successful at developing the economy and attracting foreign direct investment (FDI). (Of course, I could devote multiple blog posts to this topic alone). 84 and 89 million are both certainly less than 1.3 billion, but I’d still guess there’s a market in those countries if only companies would be willing to invest (Intel already does) and those govts would provide the right incentives and mechanisms to aid their own development. Again, perhaps both Vietnam and the Philippines can look to China as a guide.
As Ceci has proudly informed me multiple times (based on her chats w/ the jewelry makers at the Pearl City), 90% of all Freshwater Pearls are in China. I keep looking at this figure and trying to come up with a way to make money off of it, say, exporting either raw pearls or finished pieces of jewelry, but it seems, someone has already beaten me to the punch. Damn those enterprising Chinese…grrr.
Though I’m not sure if the statistic is correct, I believe the Mayor of Los Angeles said that 43% of all the US’s ocean-based cargo goes through the ports of Long Beach & Los Angeles. His goal is to increase this to 70%. I was extremely skeptical of this for many reasons, but at the most basic, because the logistics of it would never work! In my opinion, in order for that to work, the US would have to seriously reduce its ocean-based international trade, which with its increasing dependence on China, India, Vietnam and others for cheap imports is never going to happen. As we increase ocean-based int’l trade, logistically those 2 ports are never going to be able to handle it all, so increasingly ships will be diverted to Oregon and other places around the Pacific as well as the Gulf of Mexico (for ships coming from other places). Well, no more comments on this as I really didn’t want to comment on the mayor’s speech.
This fact is also a bit old, but I would guess it still holds true and perhaps is even more true now than when I first heard it:
More people are learning English in China than in Great Britain.
The mayor also commented on this issue today (though perhaps only because of my excellent question). He indicated that in his official visits around China, he went to middle schools where the children greeted him in not only their native tongue, but in 3 languages, namely Mandarin (a given), Cantonese, and ENGLISH! Let me just state the obvious: if a Chinese delegation went to any place in the US, they would not be greeted by school children in 3 languages! If they went to Alhambra/Monterey Park areas in CA, they would probably hear Mandarin & English. If they went to the old Chinatown in LA, they would likely hear Cantonese & English. If they went to a Mexican immigrant barrio in LA, San Diego, Phx, or any city in the southern US, they may hear Spanish & English. Well this situation plus the US students’ poor math and science skills reflect badly on our school system. If the US’s education system doesn’t improve dramatically, there may be a day very soon when the US plays second fiddle to China in nearly everything. Let’s just hope the US can hold onto its edge in R&D and innovation and let the Chinese continue to play copy-cat. (Yes, I know this goes counter to what I said in one of my longtime-ago Xanga posts, where I hoped the Chinese could improve in R&D to produce products and services that would make the world easier and more efficient and in doing so improve IPR protection in China. While I still believe this, at heart I am a true nationalist, ie patriotic American, and I wish the US peaceful success in the global community.)
Well, I hope I have provided you with enough random facts on China & Asia for now and so at the next cocktail party you can impress people with your useless knowledge. If you have any random facts regarding China, please add them to comments as I love to impress my friends at bars with the pointless things I know about China. 
October 11, 2006 at 6:19 am · Filed under Knowledge and Experiences, Tourism, Learning through Foreign Cultures
Pictures: Singapore & Hong Kong
As early as entering the airport in Singapore (or even in Hong Kong), when coming from Mainland China, one can just sense the increased organization and civility. Let me explain what I mean by this by sharing some of my observations…
When the subway train rolls to a stop and the doors open in Singapore people can actually get off the train. This is a novel concept in China: people in Singapore wait until those getting off have done so, and then they proceed to get on. In China, those getting off feel like fish swimming upstream as they face the onslaught of people clamoring for the–often non-existent–empty seats.
In Singapore, the Chinese (94% of Singaporeans are ethnic Chinese) actually put diapers on their babies. In China, by comparison, the baby’s pants are split along the seam to allow easy access for the child’s wastes to the sidewalk. My friend Aana (a New Zealander who has been in Singapore for 5 years) told me, in Singapore they have to put diapers on the babies. Singapore is famous for being meticulously clean (generally true, except in Little India), while China is notorious for being dirty. Of course, this means you won’t find any spitting in Singapore, nor will you find the bus assistant throwing 2 days worth of trash out the window. (Note, this behavior is not characteristic of every Chinese person–I know plenty who are refined, educated, and sophisticated–but it represents the behavior of the masses.) So why, you might wonder, has Singapore been so successful at curbing the obnoxious habits of Chinese people, yet Mainland China can’t seem to do the same?
There are many reasons:
- Singapore is a much smaller place with far fewer people;
- Until 60 years ago, Singapore was a British colony;
- Singaporeans are better educated and more cosmopolitan than they average Mainlander;
- Laws in Singapore are very strict; and
- Singapore has some of the most effective public service campaigns of any country.
Singapore is well-known for its strict laws and harsh punishments. Tales abound of being lashed for chewing gum and executed for possessing drugs. And these certainly have been effective; however, laws are essentially meaningless if no one knows about them. Therefore, education, along with laws, regulations, and enforcement, are necessary. To educate the public and promote a better society and life for Singaporeans, public service campaigns are a common fact of life in Singapore.
Aana explained to me that each year the Prime Minister selects an issue of social concern that he wants to focus on. For example, I noticed on many of the food stalls, signs that said, ‘you can ask for more vegetables and less oil’ or ‘you can ask for less sugar and less cream.’ And I wondered who was so health-conscious. She explained that this was a previous public service campaign. The current public service campaign is customer service, such as is provided in hotels, restaurants, retail establishments, and hospitals. These public service campaigns are so effective partly due to their multi-faceted approach. The government uses traditional advertising mediums, such as TV, radio, outdoor signage, and presumably newspapers as well. But they also enlist businesses for support and cooperation. In the example of encouraging healthy choices of food, clearly the government exerted influence on the food stalls. For improving customer service, the government had segments as part of the traditional news program demonstrating how to improve employer-employee relations at service establishments. By working directly with businesses to promote the ideals of the public service campaigns, the government not only reaches those specific employees, but also multiplies its impact through the customers those businesses deal with. The influence of the government on Singaporean society is stunning, as is the difference between social norms in Singapore and China.
However, such heavy government influence and such successful public service campaigns come at a price. Aana suggested that the strict government rules and regulations stifle innovation, creativity and entrepreneurship. She also mentioned that freedom of speech is rather limited. Individuals can not own property (land); they can only lease it for a certain number of years. As Westerners, we consider these last 2 issues fundamental human rights: freedom of speech and the right to own property. As you can see there are definitely trade-offs to the Singaporean system. (On the other hand, Singapore is one of the best examples of a peaceful pluralistic, multi-racial, multi-religion society.)
Nonetheless, I believe China could learn from Singapore. China has various approaches to cleaning up its people’s obnoxious behaviors. However, needless to say, these have been less than successful. For example, China requires travel agents to tell their outbound tourists not to spit or litter in foreign countries. But if only 100 to 130million Chinese travel abroad each year, the other 1.2billion will never hear of this concept. As TV is the most popular form of entertainment in China, the government needs to follow Singapore’s example and reach the masses through TV campaigns. TV is further a valuable medium because it doesn’t require literacy nor travel nor individual ownership. And since the government controls all the media (namely TV) anyway, there is no reason why appropriate public service messages couldn’t be shown on television. The government should also influence businesses and public servants to set a good example. For instance, 2 of Shanghai’s taxi companies are government sponsored, so those taxi drivers should be the first to respect pedestrians and stop spitting out the window. A more committed effort on the part of the Chinese government would result in greater success than its current approach.
Though far from perfect itself, there is a lot Singapore could teach China about refinement of peoples and society, and about the effectiveness of education, laws, regulations, enforcement, and public service campaigns.
October 10, 2006 at 7:23 am · Filed under Uncategorized, Tourism, Learning through Foreign Cultures, Peace Through Tourism
Recently I returned from Singapore and Hong Kong, where I enjoyed site-seeing, shopping, dining, clubbing, etc with many friends.
Pictures wth friends mentioned below.
In Singapore, Brenda and I were able to spend time with our mutual friends: Stuart, Stanley, Melissa, and Quan. And she saw another friend from high school. I also saw Aana, as well as my very close friend from USC, Kacey. In Hong Kong, I reconnected with Teresa, Phoebe, Edmond, Raymond, Vivien, Leon, Hilton, Peter, Grace, and Joseph. It was great to see all of you again! I also enjoyed meeting other friends of Aana, Stuart, Kacey, and Joseph. Since most of us met either on out-going exchange, in-coming exchange, or through case competition of the USC Marshall School of Business, I think we all owe our thanks to Sean O’Connell for facilitating the international programs and therefore our meeting. I’m so glad to know you all and I hope the next time you will come to visit me and I can show you around. 
A special thanks to Brenda and Aana for letting me encroach on their personal space for far too long.
All of us studied business and as we chat about who we know across the globe, we come to find we are actually a fairly small global community of undergraduate business students who participated in exchange (or other international programs). This makes me wonder if in 3-7 years we’ll all be competing to get into the same MBA programs. Then we may find that those same people who were only our classmates for 1 semester in undergrad (say at USC) may become our classmates for 2 years of MBA say at INSEAD, or somewhere else completely remote from USC. Then in 15-35 years we may all find ourselves leading some of the world’s largest and most well-known firms. And we may again come to rely on each other, not as group mates for a group project, but as suppliers and customers, or consultants or financiers that help us make our next billion $$. I wish all of you the best of luck!
Its truly a wonderful thought to know that I have friends in multiple countries. When you think about it, knowing people in other countries really enhances your appreciation of those countries. Those far away and exotic places become more real, more tangible, more authentic, and more human. When we know people, and particularly have friends in other countries, we are more likely to have a favorable impression of those places and to feel they are trustworthy. In doing so, we won’t feel ill-will toward them, and also would have no reason to want to cause them harm. In its most basic form, the concept I’m referring to is Peace Through Tourism. When written like this, this seems like a very basic, straight-forward concept. But yet, in reality, it seems very difficult to put into practice. I wish that more people would have and would take the opportunity to make friends throughout the global community. In doing so each of us could individually contribute to peace on a global scale. As we create trans-border friendships, we strengthen our global bonds, interconnect our worlds, and create peace among us. I wish that everyone could have at least one good friend who is not of their birth country.
October 6, 2006 at 4:03 am · Filed under Tourism, Learning through Foreign Cultures, Traveling
Last night I left Singapore and flew to Hong Kong. I had a great trip to Singapore and Hong Kong is going well so far. However, in my trip to Singapore I learned a couple of important lessons.
Like most travelers, and particularly most backpackers, I tried to lighten my load and carry as little weight as possible. So when I was packing for Singapore and Hong Kong, I thought to myself, those are both modern clean countries and the food will be safe and healthy, so I don’t need to bring prescription pills for stomachaches or other similar afflictions. This assumption seems to make sense coming from Mainland China. However, for a day and half I was the most sick to my stomach I have ever been while traveling and have continued to be somewhat ill since then. You can bet I definitely wished I had brought those pills with me. So my first lesson is, it’s better to carry around a few extra items than to sacrifice a day of the trip to illness and to feel extremely sick. And, I guess also I shouldn’t make assumptions about quality of food and water because it is possible to get sick anywhere, anytime. So from now on I shall carry my extra medicine to ward off illnesses and other ailments.
My second lesson is about the importance of preserving and carrying along 2 very important documents associated with electronics, namely a purchase receipt and a warranty card. Panasonic, for example, has a 1-year global warranty where they’ll repair your equipment for free, whether it’s your fault or due to product malfunction, provided you can show them those documents. If all electronics companies have as valuable of repair-warranty policies as Panasonic, we may all start carrying those documents for our cameras, MP3 players, and other electronics with us while traveling. I learned my lesson to always keep the receipt and warranty card. Then I can scan them and at least have them easily accessible in electronic form, if not, in hard copy as well. And so maybe in the future I will save myself $200!
Unfortunately, these were painful (literally, in one case) lessons to learn, but if you don’t learn while traveling, what benefit is there? It’s like the commercial, ‘Live and Learn.’ In this case, I just hope you can take my advice and benefit from it since I have already learned the hard way.
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