This is China! BLOG

When the Student Becomes the Teacher

I recently received news from the States that a former ESL (English as a Second Language) student of mine, Magdalene Mok, passed away. Natural causes. She must have been in her seventies by then; in her sixties when she was a student of mine in Boston Chinatown. That was in the 1990s, when after work as a hotshot Big 5 consultant I would head to the local Chinatown Catholic Church a couple nights a week to teach more than twenty Chinese students at a time how to speak English. I’m not Catholic, but it was something I wanted to do. The couple years of teaching were amongst the most rewarding in my life.

Magdalene Mok was one of a dozen core students. They all hung with me for the two years, from the first class to the last. They were middle-aged and elderly housewives, for the most part. From Hong Kong, Guangdong and Fujian. I was single at the time. They all became my mothers. Chinese mothers hate to see their children single. And hungry.

Magdalene started two trends. She would bring me a Styrofoam carton of fried noodles or buns stuffed with pork for me to take home after the night-class. Then another student would make sure I had fresh tea to drink at the start of class. Eventually, the competitions began to see who could get to class first with the most food to bring teacher. I finally had to tell them all to stop bringing me food; I had to lie I’d already eaten dinner before the night class – I wasn’t hungry, I insisted.

She was also the first to call me “Bill Teacher,” which other students caught onto and seemed to enjoy repeating just for the sheer oddness of the title. Secretly, I was both tickled and touched by the mantle.

Magdalene was a devout Catholic. I helped her moved house once, to an apartment complex near Chinatown for the elderly subsidized by the Boston government. I remember all the crosses and Jesus photos neatly packed in a box, ready to be positioned in sacred places throughout their new home.

I never thought of the heavy-set woman as old, really. Maybe it was her Beetles haircut that framed her thick, owlish eyeglasses. Clad in her uniform - baggy T-shirt, jeans and white sneakers - she was always active, always moving. In the few years we knew each other, she was always organizing events, always involved in the Chinatown community. Once, she came into our night class in earnest bearing a placard and wearing a banner across her ample chest. She apologized for being a little late to class; she had been protesting the development of a new high rise in Chinatown.

Magdalene had six children; all but one was still in Hong Kong. The two daughters notified me Magdalene had passed on. I am deeply grateful to them for letting me know. I met a couple of the other “children” in Hong Kong, adults all. I met her husband in Hong Kong, too; a spry elderly man who looked twenty years his junior who liked playing Mahjong.

Magdalene set out in the States to make her own life; she had given so much of herself to her family in Hong Kong. In Boston, it was time to devote herself to God; and to good works; and to her friends and neighbors. And to her English teacher, who learned so much from her about how to be a good person. Which isn’t as easy as it sounds.

Posted in China Development Trends | 1 Comment »

Qingdao Sewing Up the Textile Industry

China Briefing posted an article a few days ago on the dramatic drop in export activity in Guangdong Province.

I asked a Dutch friend what his impression of the transition was. I written about conversations with him before: he’s the fellow who hates Dongguan and figures off the top of his head at least 6,000 factories had closed down in and around Guangzhou alone.

In our latest conversation about his industry – textile exports – he explained to me just how dramatically the industry had shifted in South China. His company takes orders for clothing in Europe and farms assembly out to Chinese manufacturers. “In the old days,” he said, “textile companies would outsource parts of garments to smaller companies; essentially, the big companies were assembly shops. Now, with the loss of the smaller companies, the larger companies are once again becoming vertically-integrated, raising their costs of doing business.” And as the large companies are the last men standing after the industry and regional shake-out, they can be choosier, picking higher-margin orders, with profits they might not have dreamed of before.

“And let me tell you, it is a pain to have to start all over again,” he said. “We have to find new suppliers and start working with them for the first time.” I asked him if there was a problem with the quality of the goods they were producing. “No, not really,” he answered, “the quality of new manufacturers is so-so; but not like it was with those they had spent years cultivating.”

My friend said the family business has lost the priority they once had in getting orders done, to specification. “For example, with one supplier in Guangdong, we could communicate directly with the owner to get the time and attention we needed for orders. Over fifteen years, now, and we’ve made that owner very rich. Now his son – who was educated in the States - gives us a hard time on cost. So, we sometimes have to call the father to get the terms we need.

“We can’t even do that with new vendors, especially in a new region.”

I asked him what region was taking over from Guangdong in the textile industry. Without hesitation he answered, “Qingdao.” “Their costs are lower than what you’ll find in Guangdong; but we have to build those relationships all over again.”

At least, he’ll be able to enjoy a cold beer while he waits for his orders.

Posted in Qingdao, China Development Trends | No Comments »

Graphic China: Global City Comparison

I mentioned this before in a previous article, but I still crack up when I think of what an Indian friend of mine said to me recently. We were talking about how fast China has been developing its industries when he wise-cracked: “India could do with twenty years of no democracy; then just put it back in place when everything is done.” He’s been the General Manager of a British factory here in China for a couple years now, so he has some sense of what the Chinese government is on about with its economic development planning.

An IDC forecast bears out his tongue-in-cheek rumination:

“IDC forecasts that Chinese cities will overtake Indian cities by 2011 due to massive investments made ( e.g. infrastructure, English language, Internet connections, technical skills, etc) which are favorable towards offshoring.”

Here’s a snapshot from the IDC website of city standings globally:

Posted in China Graphs, China BPO, China IT Outsourcing, Dalian, China Development Trends | 1 Comment »

BaBa’s Got a Brand New Brand in China

Alibaba, the most famous B2B product-supplier directory in China, is also the tenth most popular search engine in the world, according to Comscore. But B2B hosts know time is running out for their traditional roles as information brokers for China manufacturers. “The Chinese government wants to develop its services industries,” Franziska Gloeckner recently told me.” Ms Gloeckner is Vice General Manager of Made-in-China. She’s a German national who has been with the Chinese company for more than four years. Made-in China holds the number two position in the China supplier internet portal business. “That means that in five or ten years time there may be fewer manufacturing companies in China.”

The Chinese government at national and local levels has mandated in the most well-developed regions in China that industries become less polluting, close up or move on. Governments are meting the same mandates to labor-intensive industries, which typically are low-value manufacturers with low capital requirements. At the same time, China is promoting the development of tertiary industries in its more prosperous regions. Tertiary industries include semiconductor, avionics and shipbuidng; and in services such as IT, financial and professional.

The result of the changes as policies are applied westward in the country is that the membership bases of China suppliers will erode over time, affecting advertising, membership and any achievable revenues from transactions. B2B market leaders like Alibaba are already shifting to a service model, with its companion directory Alimama.com. And with Alisoft, Alibaba will support suppliers in their backoffice through SAAS (Software as a Service) applications to run operations. Much like the American product Salesforce.com, suppliers will be able to download support applications that will be hosted in remote locations.

Made in China will have a completely new ring to it in five to ten year’s time.

Posted in China Development Trends | No Comments »

Ningbo: Mayberry RFD It Ain’t

Betty, a European friend of mine who is a real estate agent here in Suzhou told me about some of her forays into other markets in China. The Suzhou-based service provider has been interested in expanding into other markets. Betty has been the person to travel round to some of these places to get a feel for the markets.

Her observations about the Ningbo real estate market made me laugh. She posed as a Westerner whose husband was going to relocate to the area. She acted as though she did not speak Chinese language – which she does, and rather fluently, as well as reading and writing. The agents she met in Ningbo were completely unfamiliar with the locations of most of the units to which they were supposed to be introducing her. In one instance, when they had finally found the location and looked at the rental, the husband and wife that were represented had not beforehand settled on a rate at which to rent the flat. They began arguing vociferously in front of my friend to sort out how much money they could actually leech from the Westerner.

The Ningbo story puts me in mind of another instance of the Ningbo real estate industry not quite up to international standards. Dick, an American friend who was the manager of a mid-sized, family-owned American company traveled to Ningbo to investigate the market for commercial real estate market; in particular, the company wanted to open a representative office in the city.

One of the agents among others he used in the city was from Century 21, the American multi-national agency. “She was worse than useless,” my friend explained, “she didn’t know where any of the properties were. In a couple instances we had to walk and walk to find the office building. Finally, we drove into the city, where she assured me just round the next corner was the property she was looking for. This went on for nearly a half-hour. Finally, she told me to let her out at a street corner. She would go looking for the property on-foot. She told me to wait for her in the car, at the corner. When she got out, I drove off. An hour later I got a phone call from her; she had found the property and was waiting for me at the corner. I told her she had wasted my time and didn’t know what she was doing. Another hour later, and her boss called me: I told the boss the same.”

Livability for Westerners in second- and third-tier cities in China is really more than just whether there’s a Starbucks in town (Ningbo has at least two); most of it has as much to do with the delivery of the service as the presentation. Westerners are not expecting a Mayberry R.F.D. down-home, neighborly sense of hospitality when they come to new cities in China, but they do hope they’ll work with service staff who cares – and know what the hell they’re doing.

Posted in China Development Trends, Expat Life | 1 Comment »

Everybody Was Jive Talking

Paul Denlinger posted a an article on his blog this month about that gave me a perspective on the subprime mess I hadn’t thought of before.

“So, while Chinese factories have on occasion exported defective products, the US has exported defective financial products. And the US government participated because Treasury sold T-bills which were backed by these defective financial instruments.”

In other words, Denlinger makes the point, if the “quality fade” of Chinese suppliers ultimately resulted in the execution of a high-ranking government official - and the suicide of a company owner in China to boot - who is too be held criminally liable in the cases of financial “products” exported from the States:

“No one yet knows the size of the credit bubble, but I have heard numbers from $15 billion to $45 billion bandied about. Mind you, the US economy is a US$12 trillion a year economy, so we are basically talking about anywhere from 1 year to four years of economic output disappearing.”

Steve Clemons in The Washington Note in his aptly named article America Exported Poisoned Financial Productsmakes the analogy all too clearly. Paul Krugman’s article, to which Clemons refers, talks about a “shadow banking system” that was the source of the poisoned financial products. Interestingly, China has a great deal of experience with its own shadow banking systems, having shut down several of them in the last couple years and putting the shadow bankers beyond bars if not to death.

To paraphrase what one China official said about the issues facing the Chinese banking system, compared with the problems confronting the American sector: we’re just not sophisticated enough to make mistakes that big.

Maybe the BeeGees got it right after all.

Posted in China Society | 2 Comments »

Who Wears the Pants in Shanghai?

The British Director of a marketing firm in Shanghai shook his head when I asked him about human resource issues in the metropolis. He said, “Most of the staff in my office are women. From Shanghai. The men are absolute shite. Lazy, unfocused, but wanting more money and a title that would take 10 years in the UK to get to – not the year-and-a-half deadline these guys have.”

I related to him a story I had read in the blogosphere (I think it was in the Shanghaiist), a street scene someone had witnessed in Shanghai. A husband and wife were arguing on the sidewalk. They were clearly coming home from the grocery: the husband was carrying the bags. For those who have been in China long enough, it is common knowledge that in few other places in China do the men carry the shopping bags for there wives: Shanghai men are famous in that way.

The husband suddenly threw down the bags and stormed off. The wife glared at his back. Perhaps twenty meters out, seeing that his wife was unmoved by his temper tantrum, he returned to the scene of the crime. He picked up the bags. Head hung low, he followed his wife the rest of the way home.

The British Director and I laughed at the telling. “So true, so true,” he said. “In the office the Shanghai women are formidable. They work hard, they are focused, they learn quickly.

Shanghai men for the last hundred years or so have had a reputation in China for being the most gentlemanly of Chinese: considerate of their wives, helpful around the house, supportive of their spouses’ feelings. Chinese say that is because of the influence of the Western colonialists that lived in Shanghai from the mid-1800s. Also, many of the Chinese that traveled abroad for studies in Europe and in America were from Shanghai, importing foreign ways when they returned to home.

Beijing men, on the other hand, figure Shanghai men are effeminate sissies. But then again, I’ve seen Beijing men – and women – start punch-ups in the middle of the day with the slightest provocation.

And as for the Shanghai woman, my friend concluded: “It’s pretty clear who wears the pants at home.”

Posted in China Society | No Comments »

Sanding the Rust from China’s Northeast

Reuters recently reported:

China’s Northeast region, once the crown jewel of a centrally planned economy but now its rust belt, fell on hard times at the turn of the century as its monolithic state companies adapted slowly to a rapidly opening economy.

Now, years of painful reforms and an industrial overhaul have allowed the region to regain some of its former glory.

Unemployment has dipped to manageable levels. State firms like Bank of Dalian pursue stock listings. The region is vying with Shanghai to become a global shipbuilding nexus, led by the country’s largest shipyard, Dalian Shipbuilding.

The region is will become more the focus of foreign direct investment as its economy develops and its costs remain lower than that of the Pearl and Yangtze River Delta’s:

“The Northeast has transformed in the right direction,” argued Zheng Yanchao, an economist in Guangzhou. “But its market growth momentum has not fully picked up yet and it probably can’t regain its leading position, at least not in the near future.”

Posted in Dalian, Qingdao, China Development Trends | 1 Comment »

Taiwan’s Army of One

I recently spoke in Shanghai at an Executive MBA program. I had been invited to kick-off the week-long program for young American managers with a talk on China’s Culture, History, Economics and Business Environment (specifically for Western companies). EMBAs received the hour-and-a-half long talk well, adding at the end some rather insightful questions, which I attempted best I could to answer.

After one of the Program Director’s passed me the honorary College pen-and-pencil set to thank me for my time, he inserted as a final question: what would I recommend to budding entrepreneurs in the audience who would want to do business in China. I thought a moment, then answered, “Do your due diligence; develop your network of contacts deeply; and if a Chinese says you absolutely need him in order to do business in China, run the other way, because in today’s China you don’t need a Chinese partner [unless, of course, you plan to operate in certain sectors where a JV is required by fiat].

“I’m offended!” a reedy voice from the audience spluttered. It took me a moment to focus on the source of the discontent with my words of wisdom. He was a small, skinny Chinese fellow, late twenties – perhaps even early thirties - white-button down shirt with dark blue tie. “All I’ve been hearing all morning is about ‘The Chinese Way’ and how bad it is, and you’re bad mouthing Chinese people. I am Chinese…”

A voice from the back of the room injected insightfully, “He’s Taiwanese.” I got the impression he wasn’t universally supported by his classmates.

“Ah,” I said sagely, “Taiwanese. That’s different, you know.” I knew from his tone and spoken English he hadn’t any experience living or working in the Mainland. I wouldn’t be arguing with him – if I so chose – I would be arguing with his ideas of the way things are in the Mainland, his impression of his status in the Mainland, perhaps with the media in the States and certainly with the mythologies he grew up with in Taiwan and with his parents. In other words, it would have been a waste of my time to engage him. At least, until he had had real experience with how Mainland Chinese perceive Taiwanese businesspeople; and with how Taiwanese businesspeople actually behave in quixotic China.

“Well,” he back-pedaled, “I have some friends from the Mainland. And if they were here, they would be unhappy as well.” He looked around for his posse; he knew if they were there he could definitely gang-bang me.

“Yeah,” a small voice piped up in the front, a young American-born Chinese woman, definitely in her twenties.

“Well,” I said smoothly, “let’s take this off-line. I’ll be happy to address any questions you have about the talk.”

“I am Chinese. I am offended,” he continued on. His peanut-head swiveled on bony shoulders, back and forth, looking for the crowd to swell up in defense of his honor. No one rose to the occasion.

“Well, after the talk, I’ll be happy to meet you in the back of the room and you can beat me all you like.” I was determined to finish the answer. I said, “Normally, when I give such kinds of talks, I preface the talk with ‘This is not going to be a Politically Correct talk in the American sense. Culture is sensitive to people, especially for those who identify themselves fully with their culture, like this gentleman. However, in China, it is very difficult to separate culture from business. And with 4,000 years of history, doing business in China is not at all a straight-forward affair. Thank you.” Round of applause. Nearly twenty minutes of additional questions from audience members who came up to the podium.

And afterward, my leetle [sic] friend: I never saw him again - the first Taiwanese I had ever met to lump himself in with Mainlanders. I was curious, somewhat, about his impressions; but not so much so I was willing to serve as his psychotherapist.

The lobby outside the hotel ballroom was heaving with people. I wasn’t in a social mood, so I simply made my own way out. Call it whatever you like – call it, even, The Starbucks Factor – but I needed an espresso and bit of time to myself before returning to the office - to manage The Chinese Way.

Posted in China Society | 3 Comments »

And Finally … Safety First!

A friend building a factory in the deep interior of China recently called me with tragic news. One of his Chinese operators had been killed in the machine the worker was tending. It seemed it all happened within ten minutes: the victim’s work partner had gone off to get some materials; when the partner returned the machine had eaten the operator’s shirt, and strangled the operator; twelve minutes later, they were in the hospital, doctors in attendance, but the operator could not be saved.

My friend could not understand how the accident had happened. In the twenty years the machine had been in use in the West, there had not been one accident, leave alone a fatality.

In the May 2008 issue of Eurobiz Magazine I’ll be talking more about safety issues in the China production facilities Westerners manage. Write in now with some of your safety stories and company policies.

Who knows, some of your wisdom just may save someone’s life.

Posted in China Society, China Labor Issues | No Comments »