China Study Tour 2010
Wednesday, September 15, 2010
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
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
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
Wednesday, September 15, 2010
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
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.
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.
Wednesday, September 15, 2010
China Contact Information
Starfish Foster Home
Attn: Amanda de Lange
Maple Leaf New City, Area C, Block B-502
Ke Ji Road, Gao Xin
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
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
Lisa Buckmiller (University of Arkansas Children’s
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.
Wednesday, September 15, 2010
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
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.
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.
Wednesday, September 15, 2010
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 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
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.
Monday, September 13, 2010
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
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
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
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.
Monday, September 13, 2010
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.
Monday, September 13, 2010
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
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.
Saturday, September 11, 2010
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.
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.
Saturday, September 11, 2010
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
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.
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.
Saturday, September 11, 2010
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
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.
Saturday, September 11, 2010
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 after being surrounded by China,
Chinese characters, and the Chinese language.
It took awhile to get inside, though, due to security
measures. Since my name was submitted to security 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
And I didn’t see any pictures
of children or butterflies anywhere.
Saturday, September 11, 2010
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.
Saturday, September 11, 2010
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.
Saturday, September 11, 2010
This morning, we went 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
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.
Saturday, September 11, 2010
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.
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
Saturday, September 11, 2010
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
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
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.
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.
**Update: Ken relied to this post with the following comment, for which I am both impressed and appreciative that he took the time to do so.
"I highly enjoyed your visit to our headquarters in Beijing.
Unfortunately, as I explained, we had to use a room that we would not
normally use, due to our primary executive meeting rooms coincidentally
being booked for other executive meetings. So I apologize again for the
weak A/C system in that room.
Regarding the question about why
VanceInfo might be chosen, other than the fact that it is a Chinese
company that can assist with China market penetration, please view the
video linked to our homepage http://www.vanceinfo.com It speaks about, from a customer's perspective, why VanceInfo was chosen. Thanks again and hope to keep in touch!"
Saturday, September 11, 2010
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
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. This, I think, is probably
understating the case.
After his presentation, we were presented multiple
promotional videos by a young Chinese woman wearing hipster 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
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.
Monday, September 06, 2010
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.
Monday, September 06, 2010
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
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
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.