Banks, Money, and Taxes

November 1, 2006 at 4:10 am · Filed under Uncategorized, Knowledge and Experiences, Entrepreneurship & Business, Business Climate

China is almost totally a cash-based society. This is particularly true in rural and western China where they lack the banking infrastructure to process any kind of transactions other than cash. This is slightly less true in Shanghai. As a society so heavily reliant upon cash, a number of things amuse or annoy me:

• Why do the banks have such short hours?! Yesterday I rushed from work to HSBC to try to get there by 6pm so that I could get enough money to pay my rent. However, my effort was in vain…they close at 5pm. I complained to the manager, what good does it do anyone who works a normal schedule for the bank to be open from 9-5 and NOT issue ATM cards? He told me to come at lunch. I was like, if I had that kind of flexibility in my schedule, don’t you think I would. Then he said if you’re a Premier customer we may be able to help you on the weekends. Well, I’m not. But I complained, HSBC in HK is open on weekends to all customers, why not in China. Seriously mister, this is China, you can’t be paying your staff that much money so just pay a few of them to stay an hour longer. I figured it was just an evil attempt by HSBC to keep my money a little longer until… So learning my lesson from yesterday when I needed to go get cash from my ATM (and chose the location where the ATM is only open when the bank is open) I made sure to get there before 5pm. However, this bank closes at 4:30pm and is Not open on weekends either! How do people function in an economy where they must have cash but the banks aren’t open convenient enough hours to provide it to them and where some banks don’t issue ATM cards?
• People carrying around giant wads of cash. Although I’ve seen it in Mainland China, the most poignant example I can give is when I worked in the hotel in HK. Mainland Chinese tourists would come in and pay for their rooms in cash (perhaps because they didn’t have credit cards). When a room costs about US$250 per night and someone is staying for (for example) 5 nights plus tax and service charge that comes out to about US$1500. When the largest bill in Chinese Yuan is approx US$10, that’s a lot of Yuan! To be exact, that would about 120 paper notes! I don’t know if you’ve ever held that many paper notes at one time but try simulating it with regular paper sometime to find out how thick that is. Then imagine these nouveau-riche Chinese men carrying around Louis-Vuitton men’s purses filled with stacks and stacks of Yuan in them. To go from the ridiculous to the sublime, now imagine a not very rich Chinese man (or woman) carrying around that much money in a plastic grocery sack.
• They check every single CNY50 or CNY100 for the embedded security features. As if it was worth every counterfeiter’s effort to copy approx US$6 notes, every single person (except foreigners) checks in detail–and under a blacklight, if possible–every single RMB50 or 100 note. When someone hands over the kind of cash discussed in the previous paragraph this is a very long and tedious process. As if that weren’t enough,
• They count multiple times, with machines and by hand, to check that there are indeed that many bills. When the Chinese man paid in for his JW room in cash the entire process took at least 20min because of the checking and recounting. This morning when I went to pay my rent (not only did I need my passport and I don’t know why) the woman machine-counted my 34 notes twice, then proceeded to hand-count them again as if the fact that I’d counted them, my roommate had counted them, and the machine had counted them twice was not good enough for her.

My reason for writing all of this is to point out the ridiculousness of it and to suggest maybe the Chinese government can design, print, and circulate a note larger than RMB100. It seems to me it would save everyone a lot of trouble from the counting to checking multiple bills for validity to not having to carry so dang many notes around. Or perhaps they can just extend the banking infrastructure and institute a system like Hong Kong’s Octopus Card or at least make the country more credit card friendly.

Last night as I was having dinner with some fellow USC alums, he asked me if I wanted the receipt and I responded, no, why do I care about the receipt? Rarely are you given a receipt unless you ask for it. In restaurants when you ask for a receipt it actually means you’re given scratch cards totaling the amount of your bill. You scratch the end of the paper and most of the time it says ‘Thank you;’ however, I received one in which I won RMB5 and I’ve heard of someone else receiving RMB20. You simply return this to the restaurant and they give you the money. Hey fantastic for me, free money! Someone recently explained to me the purpose behind receipts in restaurants. It’s a way for the government to actually track the restaurant’s revenue and collect taxes from it. I’m not entirely sure how the system works but in a economy so much based on cash (and to some extend evading taxes), it seems to work. The customer wants the possibility of receiving free money so they ask for the scratch receipts, the government then knows approx how much their bill was, and then the company pays taxes on that amount. It’s really an ingenious system if you ask me.

However, this is not the reason the guy last night at dinner asked me if I wanted the receipt. He was not so excited to scratch the receipt himself; he had another reason. He explained to me that as foreigners living in China (and legally employed with a work visa and residence permit) any money we spend in the country, whether for rent, food, dry cleaning, taxis, even plane tickets back to our home country (presumably bought a local travel agency) can be applied to reduce our taxable income by that amount. If you figure the average foreigner here spends at least 75-90% of their income (because really there’s not much to save and when converted back to our home currency any savings would be so little it’s just not worth the sacrifices in lifestyle we’d make here) then that spending amounts to a fairly sizeable reduction in taxable income. Hey, I thought that’s crazy but that could seriously lighten the tax burden for any expat when we start getting a percentage back for each Starbucks we drink. I’m not sure why the government does this, perhaps to encourage foreigners to spend here and support consumption in the domestic economy but also to reduce the stress on the pegged exchange rate if all the foreigners started exchanging their money.

It seems there’s no sales tax here, nor any bed tax (for example, on hotel stays in HK). Attempting to explain sales tax or a bed tax to hotel employees who’ve never left the country was definitely a challenge.

If the country could establish a more omnipresent banking system it would reduce the need for such things as the scratch receipts to track restaurants’ taxable revenue because more people would use credit cards. And of course this would apply to stores/shops as well when they start accepting credit cards. Now, even places that accept credit cards may charge the customer extra for using a credit card (especially on small purchases) because the store will not only have to pay the credit card processing fee but also tax on the revenue (because the credit card transaction is traceable by the govt).

Banking, money, and taxes in China, what a complicated situation. Just hope HSBC will give me an ATM card next year…

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Old Cars in China

October 26, 2006 at 9:23 pm · Filed under Uncategorized, Knowledge and Experiences, Business Climate

It’s very curious to look around Shanghai and marvel at the fact the cars are all old. Well to be accurate, the cars themselves aren’t actually very old. Since there weren’t many passenger cars in China before the 1970s or 1980s, there aren’t (m)any truly old cars. It’s just that the body styles are very old and the engineering is rather outdated. The body styles of cars here remind me of cars from the ’80s, with very square corners and box-like appearances. The interior/dashboard area is no newer–old radios with turn dials (unless the driver installed a new system). The only very new cars I’ve seen, I expect have been imported, such as a BMW convertible and a few Audis.

As I observed this, I thought to myself, why is this? (Can you tell I ask ‘why?’ a lot?) My reasoning is that car manufacturers don’t want to give away their newest designs. Let me back up and discuss some of the history of business in China. Prior to China’s accession to the WTO any business in China had to be part of a Joint-Venture (or a few other legal forms, but Wholly Foreign-Owned Enterprises were definitely not allowed). The government made these requirements so that during the partnerships the foreign company could transfer technology and expertise to the domestic partner. In doing so, the government hoped local companies would use the technology and knowledge to build up local expertise and eventually undercut the foreign companies. As foreign car manufacturers were trying desperately to get into China’s market they agreed to these terms. They received benefits as well: low-cost labor and knowledge of and distribution in the domestic market. However, knowing the risks, foreign car makers wrote a provision into the contract that said their local partner (in the case of VW and GM, Shanghai Automotive Corp (SAIC)) couldn’t launch its own brand within a certain period of time. (I believe the period has elapsed and SAIC plans to launch its own brand within the next 6-12months). Now, my guess is, to further protect their interests, foreign car manufacturers decided to build outdated models of cars here. So that the local partner wouldn’t rip off the newest, most advanced technology, reverse engineer it, manufacturer it, and sell it for less on the global market, the foreign car makers only brought old styles here that weren’t being sold in any developed countries anymore. This seems like a genius plan to me. ‘Let’s give them engine technology and body styles that are from the 1980s and it will still seem fantastic for the poor, backward Chinese, while protecting our newest international models.’ It would not surprise me if some manager in those foreign car companies thought exactly that. It is my understanding, though, that the foreign car companies did fix defects that were in the originally released cars from the 1980s before they brought the technology to China; this way they would not be subject to any liabilities resulting from design defects.

Now the situation gets tricky. There is new legislation that has emissions standards set at a level stricter than those in the US (though, to my understanding, not quite as strict as the EU). You’ve got to wonder, is the government finally starting to care about the environment and the pollution? Or is this a legislative attempt to get more advanced technology from the foreign car companies just as the domestic companies plan to launch their own brands and sell on the international market? I would be curious to know how the foreign car brands are reacting and what they will do. Will they bring in newer body styles as well as more advanced engine technologies when they lower emissions? Or will they make only the most minor modifications to lower emissions?

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Interviews & Employment Contracts for Foreigners in China

October 21, 2006 at 4:13 am · Filed under Uncategorized, Knowledge and Experiences, Entrepreneurship & Business, Business Climate

Today I interviewed with a Chinese company, and not just any Chinese company, a government-owned, Chinese run, 4* hotel.  As you might expect, it was not like any everyday, American-style interview.  First, a guy came found me when I was standing outside, trying to tame my hair after the rain messed it up (oops, that’s embarrassing).  Then I got a property tour (common in hotel interviews).  Then I found out this guy has nothing to do with the hiring, he’s just the greeter and a translator.  Then I met the female assistant (don’t know whose assistant).  Then I met the boss of the consulting company.  He only spoke Chinese.  He’s worked in hospitality for many years and now has been hired as a consultant by this hotel to improve their staffs’ service level and also hire foreigners so that in the next 2 years this hotel can move from a 4* hotel to a 5*.  After I drank tea and chatted with these 3 for awhile, a 4th guy showed up.  He didn’t say anything, so I didn’t know if he spoke English or Chinese or both.  Then I was called into the General Manager’s office and the 4th guy turned out to be the translator.  A GM who doesn’t speak English when over 60% of the guests are foreigners?  How does that work?

At interviews in China, where the Chinese person is interviewing a foreigner to work in a Chinese company, the foreigner is well-regarded before the interview even starts.  The interviewer typically holds foreigners in high-regard and so tends to judge them less than an interviewer would in the US.  This helps to put the interviewee at ease, initially, until the interviewee realizes s/he then has to live up to these standards.  Indeed, there seems to be greater expectations of foreign candidates than of local candidates, so foreigners are required to perform.  However, the curious thing is the interviewer talks for about 70-80% of the interview.  I don’t think I’ve ever been to an hour-long interview and talked so little.  I’m not sure if this is because of the translator, or the preoccupation of the Chinese person with himself, or simply the attempt to impress the foreigner.  I’m not basing this story solely on my experience today, but also on my previous interviews and reports from other foreigners who interviewed with Chinese companies.

For companies specializing in teaching English or other (Chinese) companies that are used to hiring foreigners, the interview process is slightly smoother, though in many ways just as curious.  Depending on the company, situation, and position, you may find your interview as casual as a meeting at Starbucks, or as formal as a full-scale presentation to the company on your strengths and where you can contribute.  In China, you’re much more likely to meet ‘the boss’ during your first interview than you would in the US.  This is because employers or ‘the boss’ usually take a very hands-on approach to management and consider each person on their staff part of their family.

So my advice for interviews in China is, don’t expect to talk much but be ready to impress and exceed even the highest expectations when you do get your chance.

As for employment contracts (of course, teaching excepted), almost all contracts in China (at least for foreigners) come with a 3 month training/probationary period.  Generally this is also true for everyone in Hong Kong, as well.  During this time, you will likely receive only a portion of your agreed salary (in my case, 80%).  After the 3 months, assuming both you and your employer are satisfied, you will continue working, but start receiving your full salary.

There’s also an interesting twist to the employment contract discussed for me today.  I have to pay 50% of 1 month’s full salary within 3days of receiving my first paycheck to the consulting company.  After asking a number of local and foreign friends they all agreed it’s rather strange for the employee to pay the consultants fee.  The consultant explained it as the compensation for him finding us the job.  But even with head-hunting firms, the employer who has signed the contract with the head-hunting firm pays the fee, not the new employee.  The employee only pays if they hire a personal consultant to help them improve their package, marketability, and select appropriate employers. I’m not sure how it works with temp agencies, but I would still doubt that the new employee pays a fee to an agency for finding them an employer.

In my current teaching contract, there’s another interesting clause which says the employer will withhold 10% of my salary until I have finished the teaching contract; therefore this accumulates each month.  This seems reasonable to me as it’s a very small percentage and it encourages you to finish the contract and not force them to change teachers partway through the teaching period. But it’s still frustrating when you expect a certain income each month and then feel shortchanged when you get 10% less.  But in the end, it turns out to feel like a nice little bonus for completing a job well done.

Anyway, in accepting employment contracts in China, beware of these clauses that may shrink your monthly salary.  Make sure you know the company will actually pay you before you start working and make sure there’s mutual trust so that issues can be resolved.  With very little employment law, and even less enforcement of contract law in China, you have no recourse should something go wrong.  Therefore, mutual trust is the only way you will get what you are owed.  (Note* This primarily applies to working for Chinese owned and managed companies, and not for MNC)

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Shopping Malls & Luxury Retailers in China

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.

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Business in Shenzhen, China

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?

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Random facts about Shanghai & China

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.

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