Over the course of a three-week trek through the cultural and business environment of China one begins to pick up common themes and learn that there are some truths that echo across firms and the country. The importance of planning to success, the need for good people, and the we can do it will power of the Chinese people and entrepreneurs. When we first landed in Guangzhou I am sure that all of us were awed by the size of our first stop. I know personally, I grew up in a town of 10,000 people and to be in a city of 10 million is a bit of a shock, no matter what you have read. Beyond the initial shock of the scale of many of the fantastic cities we visited I was more than awed by the devotion to hard work and hopeful nature of the Chinese people that you see instantly.
However, as driven as China and its people are they are not without their challenges. One of the most important impressions of this trip upon me is the realization that China has many faces, I’d heard this but not seen, and seeing is believing. The country is a very delicate juxtaposition that seems to balance upon idealism. To me this represented one of the largest challenges that China faces in coming years. Not only must the central government deal with the unique natures of the many different people living in the many regions of China’s vast landscape but they most also ensure that the rampant wealth that seems to benefiting such a small proportion of the population can somehow trickle down to the larger masses, and further support the ideals of the Communist party.
I was also very impressed by the lengths the Chinese government has gone to in order to welcome foreign investment. My best example is the Suzhou Industrial Park (SIP). It seems very much like Deng Xiaoping saw a tremendous opportunity for economic growth and foreign investment then seized it with both hands. Through a strategic partnership with Hong Kong, China built one of the most successful special economic regions in the world, and seemingly moved mountains to make the deal happen. Anything it took, if business needs it, the Park will provide it. From logistics to security, and from tax benefits, to supports of company employees, SIP has created an area that embraces China’s ideals while allowing business to thrive. It seems that with the pro-business philosophies of places like SIP and the various other municipalities in China taking foreign investment very seriously
I also noticed that much of the media seems to place China in a light that seems contrary to the reality. From this trip and what I have read, both for this trip and recreationally, China is making leaps and bounds in regulation and is beginning to take many things more seriously; resource management, food safety (though that seems a bit forced, especially lately), and pollution control. It seemed that every major company we went to was attempting in some way to respect their resources and minimize their impact on the environment. It is as of yet unclear though if these sentiments will be sustained over a long period or if this is just the latest craze, either way it seems the implications are positive for the nation as a whole.
I was very surprised also to see the investment being made in private education. It seems that the nation that built the Great Wall is looking to regain it’s place a top the heap and they very much understand the necessity of quality education to the nation after the cheap labor jobs have moved on.
Personally I found China to be a very exciting place, the new Wild West. It was interesting to meet ex pats who left prosperous jobs just to be a part of the environment and it was interesting to see the hope that China’s performance has seemed to instill in it’s people. Overall this trip was an amazing experience for me. China is obviously going to be a very vital part of the world in the future; the questions unanswered though are large and lingering. How will a vast central government with limited regional authority regulate land rights, how will the government and industry react to the cries for increased IP protection and food safety regulation from many of the nation’s trade partners, and how will China deal with it’s natural resources and climate change. Each of these will be vital to the country’s success on the global stage and each will be a very interesting business opportunity for the courageous and willing.
Monday, July 30, 2007
Monday, June 18, 2007
Company Summaries
Company Summaries: Guangzhou
Winglok Textile Factory
The Winglok Textile Factory produces collared t-shirts in various patterns and colors. From the appearance of the website the factory makes many of the same style t-shirts that one would see on the golf course. The majority of the site is in Mandarin which tells me that a majority of their business is kept within the Chinese border, possibly in that they assemble t-shirts that they ship to other retailers who are connected to foreign markets. Their site also has a yet non-functioning option to translate the entire site into English.
1. Which clothing retailers does Winglox textile factory currently produce for?
2. With the option to translate the site into English does this suggest that Winglok will be transitioning to allow on-line ordering of products from U.S. retailers?
3. Are their any plans for the factory to specialize in t-shirts for specific designers?
4. Does Winglok have any plans of expanding their product line beyond t-shirts?
VTREK Audio and Video Products Factory
VTREK makes a variety of home/car audio and video equipment. From the appearance of their product line they produce many different solutions for home audio/video surround sound systems. They also produce many portable products for the home or office. In addition to a long line of video playback products VTREK also produces Hi-Definition digital video recorders.
1. What proportion of sales does car audio equipment represent?
2. How does the company see itself competing with larger names in this industry such as Pioneer, Sony, Kenwood, Panasonic, and JL Audio?
3. Noticing that the company does not yet export products into the United States, is there currently a plan to break into that market?
Company Summaries: Macau
Macau Polytechnic Institute
Macau Polytechnic Institute was established in 1991, and offers a variety of majors in areas of study including business, health sciences, public administration, physical education and languages and translation. Since 2001 the university has ventured outside of their local territory to extend the diversity of their 2700 students. The university has made collaboration with industry an important part of their mission as well as encouraging the roles of research and teaching at the university.
1. Has the university found that foreign companies attempting to establish gaming facilities in the Macau area are supportive of the universities mission through collaboration and donation?
2. Being a polytechnic institute what role does hands-on learning play in the education process?
3. Does the university receive any sort of monetary support or subsidy from the government or are they entirely dependent upon tuition and fundraising?
4. Has there been an increase in the number of students in the e-commmerce program in recent years?
Sands Casino
The Sands Casino in Macau was the first Casino in Macau to be supported by international financiers. The Sands has been open since 2004 and encompasses over 900,000 square feet of entertainment and gaming space. The Sands offers three distinct areas for guests to gamble and claims to be the finest and most opulent gaming experience in Macau. The Sands seems to offer a Las Vegas like experience within the PRC, without the luxury of a hotel on site.
1. What really makes the experience at the Sands Macau so different from the experience at the Sands in Atlantic City, New Jersey or in Reno, Nevada?
2. Does not having a hotel on site change the behavior of the guests to the Casino?
3. Does the casino have an events center and have they explored the possibilities for entertainment (prize fights, large concerts, athletic events) that these venues bring for guests?
4. Where do the typical casino guests hail from? (PRC, Europe, Russia, Hong Kong, Taiwan)
Wynn Casino Macau
The Wynn in Macau is a true luxury hotel and casino. The Wynn offers a multitude of dining experiences for its guest as well as what one can assume is some of the finest shopping in all of Macau. Luxury is the word at the Wynn, and it exemplifies this from its golden tower to fountains and décor. The Wynn also offers four distinct types of rooms all with their own flavor and luxurious amenities.
1. Being a luxury destination does the casino have the sense that their success will be dependent upon travelers to the PRC and ex pats or are a large share of guests citizens of the PRC?
2. Is the focus of the resort entertainment through shows and performers or is it more based around dining, gambling, and relaxation?
3. How important are promotional events to the marketing of the Wynn experience?
4. Have you found that the needs of the Chinese guest are vastly different to that of the American visitor?
New Century Casino
The New Century Casino and Hotel in Macau offers it’s guests a wide range of facilities to suit their needs. The casino offers multiple accommodations including several suites and serviced apartments for their long term guests. It utilizes its location overlooking the Pearl River to help to set it apart as a fantastic luxury experience. The hotel also offers its guests a variety of gaming options all open 24 hours a day. The hotel’s website does not provide near the amount of information that their rival casinos the Sands and Wynn offer.
1. How has the entrance of more casinos into your area affected business for the New Century? Has overall tourism and travel in the area increased, or are they just now more fish in the same pond?
2. How many of your guests come to the resort for gambling only and how many come for a more long term vacation?
3. Have you seen that the tastes for cuisine have changed over time as more travelers and tourists enter the region? Has this affected the tastes of the locals?
Lisboa Hotel Casino/Hotel
The Lisboa is certainly a fine establishment. Offering a hotel, casino, and 15 different restaurants the Lisboa has taken service to a grand scale. The Lisboa maintains the trend of utterly luxurious Macau hotels. However this seems to be very comparable to Las Vegas’ Venetian as far accommodations and quality go.
1. Does the Lisboa plan to expand its offerings to guests in the near future with the entrance of many more resorts in Macau?
2. When visiting the Lisboa are guests most concerned with the accommodations or the gaming experience?
3. Are their plans to diversify the forms of entertainment offered at the casino in an attempt to expose guests to greater international influences?
International Game Technology
IGT is an international company specializing in gaming systems for casinos worldwide. Their main office is in Reno, Nevada and their company has about 80% of US gaming market share. The company has a presence in every legal gaming environment around the world and provides their customers with all aspects of gaming software and hardware from research, to build, to service/maintenance.
1. How important is the Chinese market to the future success of the company?
2. In entering the market in Macau was the strategy to partner with American firms, or familiar firms, or to build relationships and take risks with new partners?
3. Did you encounter any large legal differences when entering the Chinese market as compared to other markets you participate in?
Company Summaries: Shenzhen
Wal-Mart Global Procurement Center
Wal-Mart’s Global Procurement centers have been established for the purpose of building stronger relationships with suppliers within specific regions of the world. These locations exist for the sole purpose of sourcing products that are sold in Wal-Marts worldwide. They are located in 23 different countries and employ greater than 1600 Wal-Mart associates. These procurement centers are part of a larger philosophy at Wal-Mart which is to deliver maximum value to their customers and stay ahead of the global trade curve. Being located around the world obviously helps to strengthen Wal-Mart’s presence but also serves to keep all suppliers close to Bentonville.
1. How important is a specialized education for the upper management within one these procurement centers, specifically to international law?
2. With regard to super centers how does Wal-Mart weigh the trade-offs of food suppliers, between local supply, cost, food safety, and reliability of delivery?
3. How would an individual small business begin a partnership with Wal-Mart amidst such a large network of suppliers?
Yantian Seaport and Logistics Center
The Yantian seaport is the second largest deep water seaport in China, second only to the Yangshan Seaport in Shanghai. Presumably all shipments entering the Shenzhen region are handled through the Yantian port. Most interesting to me will be to see the shear magnitude of the port. I also read in industry information that this particular port is noticing a slowing growth rate in business and other sea ports in the area have been picking up the slack, per se.
1. Being the second largest deep water port in China, how does one think about growth? Is growth a product of natural demand, or does a seaport seek to market its services?
2. How does a logistics manager handle such volume, how important is technology and computerized management and how important is the knowledge and experience of the employee?
3. What percentage of imports into the port is coming from the US, and how much from California?
4. Is management of the port an internal task or is the port managed by an outside firm?
Company Summaries: Shanghai
Shanghai Urban Planning Exhibition Hall
The Shanghai Urban Planning Exhibition Hall is an ode to central planning the Hall shows the projected future of Shanghai from a city and regional planning perspective. The main draw at this location is 1:2000 scale model of the potential future skyline of Shanghai. The exhibition hall adopts the latest in exhibition technology to show visitors the bright future for one of China’s largest cities.
1. How important is politics in the design and construct of new buildings and business in the Shanghai area?
2. Is the future of urban planning to become more business and residence centered or more public service building centered?
3. Being that Shanghai is centrally planned, how often is the plan reviewed, and who reviews it, committee, specific officials, or is it a factor of changing needs and demands on the part of the needs of the Shanghai citizens?
KPMG
KPMG is a truly global firm and represents one of the big four accounting firms. KPMG member firms provide clients with tax, audit, and advisory services within specific industries. KPMG employs more than 113,000 people worldwide in 148 countries. Within China KPMG’s presence is large with 10 offices and 5,400 employees. KPMG has been serving business in China since 1945 and has a reputation such that they have been employed by some of the largest and most successful firms in China. KPMG seems to be positioned in China to supply business with a wealth of experience and knowledge when dealing with Chinese policy and international law and policy.
1. What precautionary or proactive steps should a small business take when attempting to enter the Chinese market, or is it even advisable?
2. Is financial reporting within the PRC so different from that of the United States that one would need to become an expert in each in order to compare performance of firms and industries from each country?
3. What specific industries within China are considered growing, and which are considered receding? Is there room for American agricultural enterprises in the Chinese market?
Starbucks
Starbucks represents a marketing giant. Starbucks is an international company specializing in the brewing and serving of coffee, tea, and other refreshments. Starbucks can almost be found in any major city worldwide. Starbucks has made a concerted effort to train the Chinese population, which does not traditionally drink coffee, to not only consume coffee but to do so regularly and for varying reasons. Starbucks’ journey through the Chinese marketplace will truly be a benchmark for many others who seek to enter the Chinese marketplace with traditionally expensive and non-Chinese products.
1. Being a company who does not specialize in food service how does Starbucks plan to provide this service to customers who hold food in such high regard?
2. How does Starbucks go about finding their franchisee partners as well as their partner suppliers?
3. Does Starbucks plan to do more in the way of integrating tea and tea based drinks into their offerings since tea is such a vital part of the Chinese basket of typical goods?
Callison Architecture
Callison Architecture is a large architecture firm that has worked for many of the largest businesses around the world. They have a very distinguished work portfolio and have done much within the People’s Republic of China. As an architecture firm Callison has specialized in retail space, mixed use residential space, corporate offices, and public use buildings. Based in Seattle, Washington Callison offers design and advisory services to companies and clients worldwide.
1. How does operating, in an environment where most real estate development is centrally planned, really work, is a majority of work negotiated through public commissions or through private entities?
2. How long does it take to start a project within the PRC?
3. How often can Callison apply lessons learned in architecture and design to the Chinese market and how many times do you have to throw out the playbook and start fresh?
CF Racing
CF Racing is a service based organization that seems to be analogous to the United States’ own NHRA or on a more micro level companies like the Richard Petty Driving Experience or Skip Barber Racing School that allow ordinary people to experience the thrill of racing and of speed. Through partnership with international and domestic companies CF Racing is able to offer experiences for professional drivers and amateurs alike.
1. How does CF Racing fund its service, is it purely fee based or is it partially subsidized through sponsorships?
2. What is the role of the average thrill seeker in CF’s business?
3. What kind of liability planning and mitigation must be taken to protect the company?
Augmentum
A software company that is an IBM spin-off, Augmentum offers varying software solutions for businesses. The company provides software solutions that are used by many of the world’s leading software companies. They also provide IT solutions for many companies who either do not have the staffing or have chosen to prioritize their resources differently, so as to require outsourcing of IT services.
1. Being a technology service does Augmentum find that it’s main customer is smaller businesses looking for a good first step into IT and information management?
2. Do larger customers like Palm require the software teams at Augmentum to design customized software that cannot be reused for other customers?
3. How much time is Augmentum able to devote to individual clients, and how much do they need to?
Company Summaries: Hangzhou/Suzhou
Suzhou Industrial Park
The Suzhou Industrial Park is the result of a partnership between the government of Singapore and Suzhou’s regional leadership along with Chinese President Deng Xiaoping. Construction on the industrial park began in 1994 and since it’s completion the park has strived be a haven for foreign investors and new business. The centre represents a vision of master planning and cooperation between governmental entities.
1. How does the SIPAC find new potential developers or do they come to Suzhou?
2. What levels of planning and lead time are required for any individual firm looking to be housed in the Industrial Park?
3. What proportion of square footage and rental space is devoted to residential housing and how much to office and retail space?
4. Are residents of the park typically professionals looking to be close to their work, or do they commute to other locations because of the convenience of being surrounded by their living needs?
Carrefour
Carrefour is an international retailer and is the second largest of its type, behind only Wal-Mart. Originating in Paris, France the retail giant has over 12,500 stores worldwide mostly concentrated in Europe and Asia. Their retail strategies include offering their customers with a variety of different location designs to allow brand awareness to dominate the purchasing decision, anywhere they have a customer they have a store that can service their customer’s needs.
1. What locations have worked best for Carrefour within China?
2. Is Carrefour looking to attempt an expansion into North America even though expansion into Mexico was not as successful as planned?
3. How does the group effectively differentiate its brand from other like stores, is this more a factor of providing different products or simply better service?
Company Summaries: Beijing
21 Manager
21 Manager is a site hat allows the free exchange of information between managers of companies, potential employees, advertisers, services and future customers. The site offers various services for companies from HR to IT and seems to be a very informative website for Chinese firms. In much the same way applications like MySpace and Facebook have allowed for the free share and communication of between college students 21 Manager allows mangers o companies to converse, share notes, and meet each other’s needs.
1. Does your connection with companies ever result in service contracts for advertising, HR, or IT for your own firm?
2. Is their a commission associated with listing information on the sight?
3. What other forms of information sharing like this are available in your area?
Center for International Business and Ethics
The Center for International Business and Ethics is a cooperative program between the Dongfang University in Beijing and the Markkula Center for Applied Ethics at Santa Clara University. CIBE is an international non-profit that seeks to raise awareness in the areas of business ethics in China. The organization holds seminars and distributes publications in order to fulfill its mission and to support the growth of the Chinese economy through good business practice.
1. How many firms have been willing to partner with CIBE to help build case studies or other educational materials?
2. Does CIBE see a possibility to expand their lessons and material to possibly support a degree in business ethics or in general business and corporate law?
3. Does the point for the import of business ethics and education in it transcend into social and governmental ethics in the eyes of CIBE?
Thomson
Thomson is an international French corporation with large holdings spanning several different industries. Thomson offers a variety of business services focused on information management and integration. They also serve multiple industries including education, healthcare, financial institutions and legal firms.
1. Are the China operations opening the door to support Chinese businesses and industries with the same services the offer through the world?
2. What does Thomson see as potential growth areas in the Chinese market for many of their chief products like DVD’s?
3. With legal management products being such an important part of Thomson’s business is Thomson attempting to grow that service industry in China?
Lenovo
Lenovo is an international computing firm that has gained steam since the acquisition of IBM’s personal computing division. Lenovo is the incarnation of a small Chinese based firm and in a short amount of time has become a serious player in the personal computing and communications market. Originally founded in 1984, Lenovo is poised to bring personal computing technologies to the masses in China.
1. With communications becoming such a large part of computing technologies, what do you see as the role of companies like AT&T, Sprint, and Verizon in helping Lenovo to expand this portion of their business?
2. Being as computers are high dollar items, what is Lenovo doing to help reach the areas of China outside of the major cities that could use these technologies in an educational setting?
3. How does the upcoming Olympics play in to Lenovo marketing plans and is this an opportunity for sponsorship or other non-direct advertising?
Beijing University
Beijing University, also referred to as Peking University, is the premier higher education institution in all of China, with the intention of becoming one of the premier learning institutions in the world. Beijing University is a comprehensive university offering Bachelor’s, Master’s, and PhD programs in multiple fields of study. The university was established in 1898 and has been educating the brightest of China since.
1. How important are international students to the growth of the University?
2. Like we have seen in California is their a loss of interest in the STEM majors at Peking University?
3. Does the university offer engineering and technical majors outside of computers and electronics?
Winglok Textile Factory
The Winglok Textile Factory produces collared t-shirts in various patterns and colors. From the appearance of the website the factory makes many of the same style t-shirts that one would see on the golf course. The majority of the site is in Mandarin which tells me that a majority of their business is kept within the Chinese border, possibly in that they assemble t-shirts that they ship to other retailers who are connected to foreign markets. Their site also has a yet non-functioning option to translate the entire site into English.
1. Which clothing retailers does Winglox textile factory currently produce for?
2. With the option to translate the site into English does this suggest that Winglok will be transitioning to allow on-line ordering of products from U.S. retailers?
3. Are their any plans for the factory to specialize in t-shirts for specific designers?
4. Does Winglok have any plans of expanding their product line beyond t-shirts?
VTREK Audio and Video Products Factory
VTREK makes a variety of home/car audio and video equipment. From the appearance of their product line they produce many different solutions for home audio/video surround sound systems. They also produce many portable products for the home or office. In addition to a long line of video playback products VTREK also produces Hi-Definition digital video recorders.
1. What proportion of sales does car audio equipment represent?
2. How does the company see itself competing with larger names in this industry such as Pioneer, Sony, Kenwood, Panasonic, and JL Audio?
3. Noticing that the company does not yet export products into the United States, is there currently a plan to break into that market?
Company Summaries: Macau
Macau Polytechnic Institute
Macau Polytechnic Institute was established in 1991, and offers a variety of majors in areas of study including business, health sciences, public administration, physical education and languages and translation. Since 2001 the university has ventured outside of their local territory to extend the diversity of their 2700 students. The university has made collaboration with industry an important part of their mission as well as encouraging the roles of research and teaching at the university.
1. Has the university found that foreign companies attempting to establish gaming facilities in the Macau area are supportive of the universities mission through collaboration and donation?
2. Being a polytechnic institute what role does hands-on learning play in the education process?
3. Does the university receive any sort of monetary support or subsidy from the government or are they entirely dependent upon tuition and fundraising?
4. Has there been an increase in the number of students in the e-commmerce program in recent years?
Sands Casino
The Sands Casino in Macau was the first Casino in Macau to be supported by international financiers. The Sands has been open since 2004 and encompasses over 900,000 square feet of entertainment and gaming space. The Sands offers three distinct areas for guests to gamble and claims to be the finest and most opulent gaming experience in Macau. The Sands seems to offer a Las Vegas like experience within the PRC, without the luxury of a hotel on site.
1. What really makes the experience at the Sands Macau so different from the experience at the Sands in Atlantic City, New Jersey or in Reno, Nevada?
2. Does not having a hotel on site change the behavior of the guests to the Casino?
3. Does the casino have an events center and have they explored the possibilities for entertainment (prize fights, large concerts, athletic events) that these venues bring for guests?
4. Where do the typical casino guests hail from? (PRC, Europe, Russia, Hong Kong, Taiwan)
Wynn Casino Macau
The Wynn in Macau is a true luxury hotel and casino. The Wynn offers a multitude of dining experiences for its guest as well as what one can assume is some of the finest shopping in all of Macau. Luxury is the word at the Wynn, and it exemplifies this from its golden tower to fountains and décor. The Wynn also offers four distinct types of rooms all with their own flavor and luxurious amenities.
1. Being a luxury destination does the casino have the sense that their success will be dependent upon travelers to the PRC and ex pats or are a large share of guests citizens of the PRC?
2. Is the focus of the resort entertainment through shows and performers or is it more based around dining, gambling, and relaxation?
3. How important are promotional events to the marketing of the Wynn experience?
4. Have you found that the needs of the Chinese guest are vastly different to that of the American visitor?
New Century Casino
The New Century Casino and Hotel in Macau offers it’s guests a wide range of facilities to suit their needs. The casino offers multiple accommodations including several suites and serviced apartments for their long term guests. It utilizes its location overlooking the Pearl River to help to set it apart as a fantastic luxury experience. The hotel also offers its guests a variety of gaming options all open 24 hours a day. The hotel’s website does not provide near the amount of information that their rival casinos the Sands and Wynn offer.
1. How has the entrance of more casinos into your area affected business for the New Century? Has overall tourism and travel in the area increased, or are they just now more fish in the same pond?
2. How many of your guests come to the resort for gambling only and how many come for a more long term vacation?
3. Have you seen that the tastes for cuisine have changed over time as more travelers and tourists enter the region? Has this affected the tastes of the locals?
Lisboa Hotel Casino/Hotel
The Lisboa is certainly a fine establishment. Offering a hotel, casino, and 15 different restaurants the Lisboa has taken service to a grand scale. The Lisboa maintains the trend of utterly luxurious Macau hotels. However this seems to be very comparable to Las Vegas’ Venetian as far accommodations and quality go.
1. Does the Lisboa plan to expand its offerings to guests in the near future with the entrance of many more resorts in Macau?
2. When visiting the Lisboa are guests most concerned with the accommodations or the gaming experience?
3. Are their plans to diversify the forms of entertainment offered at the casino in an attempt to expose guests to greater international influences?
International Game Technology
IGT is an international company specializing in gaming systems for casinos worldwide. Their main office is in Reno, Nevada and their company has about 80% of US gaming market share. The company has a presence in every legal gaming environment around the world and provides their customers with all aspects of gaming software and hardware from research, to build, to service/maintenance.
1. How important is the Chinese market to the future success of the company?
2. In entering the market in Macau was the strategy to partner with American firms, or familiar firms, or to build relationships and take risks with new partners?
3. Did you encounter any large legal differences when entering the Chinese market as compared to other markets you participate in?
Company Summaries: Shenzhen
Wal-Mart Global Procurement Center
Wal-Mart’s Global Procurement centers have been established for the purpose of building stronger relationships with suppliers within specific regions of the world. These locations exist for the sole purpose of sourcing products that are sold in Wal-Marts worldwide. They are located in 23 different countries and employ greater than 1600 Wal-Mart associates. These procurement centers are part of a larger philosophy at Wal-Mart which is to deliver maximum value to their customers and stay ahead of the global trade curve. Being located around the world obviously helps to strengthen Wal-Mart’s presence but also serves to keep all suppliers close to Bentonville.
1. How important is a specialized education for the upper management within one these procurement centers, specifically to international law?
2. With regard to super centers how does Wal-Mart weigh the trade-offs of food suppliers, between local supply, cost, food safety, and reliability of delivery?
3. How would an individual small business begin a partnership with Wal-Mart amidst such a large network of suppliers?
Yantian Seaport and Logistics Center
The Yantian seaport is the second largest deep water seaport in China, second only to the Yangshan Seaport in Shanghai. Presumably all shipments entering the Shenzhen region are handled through the Yantian port. Most interesting to me will be to see the shear magnitude of the port. I also read in industry information that this particular port is noticing a slowing growth rate in business and other sea ports in the area have been picking up the slack, per se.
1. Being the second largest deep water port in China, how does one think about growth? Is growth a product of natural demand, or does a seaport seek to market its services?
2. How does a logistics manager handle such volume, how important is technology and computerized management and how important is the knowledge and experience of the employee?
3. What percentage of imports into the port is coming from the US, and how much from California?
4. Is management of the port an internal task or is the port managed by an outside firm?
Company Summaries: Shanghai
Shanghai Urban Planning Exhibition Hall
The Shanghai Urban Planning Exhibition Hall is an ode to central planning the Hall shows the projected future of Shanghai from a city and regional planning perspective. The main draw at this location is 1:2000 scale model of the potential future skyline of Shanghai. The exhibition hall adopts the latest in exhibition technology to show visitors the bright future for one of China’s largest cities.
1. How important is politics in the design and construct of new buildings and business in the Shanghai area?
2. Is the future of urban planning to become more business and residence centered or more public service building centered?
3. Being that Shanghai is centrally planned, how often is the plan reviewed, and who reviews it, committee, specific officials, or is it a factor of changing needs and demands on the part of the needs of the Shanghai citizens?
KPMG
KPMG is a truly global firm and represents one of the big four accounting firms. KPMG member firms provide clients with tax, audit, and advisory services within specific industries. KPMG employs more than 113,000 people worldwide in 148 countries. Within China KPMG’s presence is large with 10 offices and 5,400 employees. KPMG has been serving business in China since 1945 and has a reputation such that they have been employed by some of the largest and most successful firms in China. KPMG seems to be positioned in China to supply business with a wealth of experience and knowledge when dealing with Chinese policy and international law and policy.
1. What precautionary or proactive steps should a small business take when attempting to enter the Chinese market, or is it even advisable?
2. Is financial reporting within the PRC so different from that of the United States that one would need to become an expert in each in order to compare performance of firms and industries from each country?
3. What specific industries within China are considered growing, and which are considered receding? Is there room for American agricultural enterprises in the Chinese market?
Starbucks
Starbucks represents a marketing giant. Starbucks is an international company specializing in the brewing and serving of coffee, tea, and other refreshments. Starbucks can almost be found in any major city worldwide. Starbucks has made a concerted effort to train the Chinese population, which does not traditionally drink coffee, to not only consume coffee but to do so regularly and for varying reasons. Starbucks’ journey through the Chinese marketplace will truly be a benchmark for many others who seek to enter the Chinese marketplace with traditionally expensive and non-Chinese products.
1. Being a company who does not specialize in food service how does Starbucks plan to provide this service to customers who hold food in such high regard?
2. How does Starbucks go about finding their franchisee partners as well as their partner suppliers?
3. Does Starbucks plan to do more in the way of integrating tea and tea based drinks into their offerings since tea is such a vital part of the Chinese basket of typical goods?
Callison Architecture
Callison Architecture is a large architecture firm that has worked for many of the largest businesses around the world. They have a very distinguished work portfolio and have done much within the People’s Republic of China. As an architecture firm Callison has specialized in retail space, mixed use residential space, corporate offices, and public use buildings. Based in Seattle, Washington Callison offers design and advisory services to companies and clients worldwide.
1. How does operating, in an environment where most real estate development is centrally planned, really work, is a majority of work negotiated through public commissions or through private entities?
2. How long does it take to start a project within the PRC?
3. How often can Callison apply lessons learned in architecture and design to the Chinese market and how many times do you have to throw out the playbook and start fresh?
CF Racing
CF Racing is a service based organization that seems to be analogous to the United States’ own NHRA or on a more micro level companies like the Richard Petty Driving Experience or Skip Barber Racing School that allow ordinary people to experience the thrill of racing and of speed. Through partnership with international and domestic companies CF Racing is able to offer experiences for professional drivers and amateurs alike.
1. How does CF Racing fund its service, is it purely fee based or is it partially subsidized through sponsorships?
2. What is the role of the average thrill seeker in CF’s business?
3. What kind of liability planning and mitigation must be taken to protect the company?
Augmentum
A software company that is an IBM spin-off, Augmentum offers varying software solutions for businesses. The company provides software solutions that are used by many of the world’s leading software companies. They also provide IT solutions for many companies who either do not have the staffing or have chosen to prioritize their resources differently, so as to require outsourcing of IT services.
1. Being a technology service does Augmentum find that it’s main customer is smaller businesses looking for a good first step into IT and information management?
2. Do larger customers like Palm require the software teams at Augmentum to design customized software that cannot be reused for other customers?
3. How much time is Augmentum able to devote to individual clients, and how much do they need to?
Company Summaries: Hangzhou/Suzhou
Suzhou Industrial Park
The Suzhou Industrial Park is the result of a partnership between the government of Singapore and Suzhou’s regional leadership along with Chinese President Deng Xiaoping. Construction on the industrial park began in 1994 and since it’s completion the park has strived be a haven for foreign investors and new business. The centre represents a vision of master planning and cooperation between governmental entities.
1. How does the SIPAC find new potential developers or do they come to Suzhou?
2. What levels of planning and lead time are required for any individual firm looking to be housed in the Industrial Park?
3. What proportion of square footage and rental space is devoted to residential housing and how much to office and retail space?
4. Are residents of the park typically professionals looking to be close to their work, or do they commute to other locations because of the convenience of being surrounded by their living needs?
Carrefour
Carrefour is an international retailer and is the second largest of its type, behind only Wal-Mart. Originating in Paris, France the retail giant has over 12,500 stores worldwide mostly concentrated in Europe and Asia. Their retail strategies include offering their customers with a variety of different location designs to allow brand awareness to dominate the purchasing decision, anywhere they have a customer they have a store that can service their customer’s needs.
1. What locations have worked best for Carrefour within China?
2. Is Carrefour looking to attempt an expansion into North America even though expansion into Mexico was not as successful as planned?
3. How does the group effectively differentiate its brand from other like stores, is this more a factor of providing different products or simply better service?
Company Summaries: Beijing
21 Manager
21 Manager is a site hat allows the free exchange of information between managers of companies, potential employees, advertisers, services and future customers. The site offers various services for companies from HR to IT and seems to be a very informative website for Chinese firms. In much the same way applications like MySpace and Facebook have allowed for the free share and communication of between college students 21 Manager allows mangers o companies to converse, share notes, and meet each other’s needs.
1. Does your connection with companies ever result in service contracts for advertising, HR, or IT for your own firm?
2. Is their a commission associated with listing information on the sight?
3. What other forms of information sharing like this are available in your area?
Center for International Business and Ethics
The Center for International Business and Ethics is a cooperative program between the Dongfang University in Beijing and the Markkula Center for Applied Ethics at Santa Clara University. CIBE is an international non-profit that seeks to raise awareness in the areas of business ethics in China. The organization holds seminars and distributes publications in order to fulfill its mission and to support the growth of the Chinese economy through good business practice.
1. How many firms have been willing to partner with CIBE to help build case studies or other educational materials?
2. Does CIBE see a possibility to expand their lessons and material to possibly support a degree in business ethics or in general business and corporate law?
3. Does the point for the import of business ethics and education in it transcend into social and governmental ethics in the eyes of CIBE?
Thomson
Thomson is an international French corporation with large holdings spanning several different industries. Thomson offers a variety of business services focused on information management and integration. They also serve multiple industries including education, healthcare, financial institutions and legal firms.
1. Are the China operations opening the door to support Chinese businesses and industries with the same services the offer through the world?
2. What does Thomson see as potential growth areas in the Chinese market for many of their chief products like DVD’s?
3. With legal management products being such an important part of Thomson’s business is Thomson attempting to grow that service industry in China?
Lenovo
Lenovo is an international computing firm that has gained steam since the acquisition of IBM’s personal computing division. Lenovo is the incarnation of a small Chinese based firm and in a short amount of time has become a serious player in the personal computing and communications market. Originally founded in 1984, Lenovo is poised to bring personal computing technologies to the masses in China.
1. With communications becoming such a large part of computing technologies, what do you see as the role of companies like AT&T, Sprint, and Verizon in helping Lenovo to expand this portion of their business?
2. Being as computers are high dollar items, what is Lenovo doing to help reach the areas of China outside of the major cities that could use these technologies in an educational setting?
3. How does the upcoming Olympics play in to Lenovo marketing plans and is this an opportunity for sponsorship or other non-direct advertising?
Beijing University
Beijing University, also referred to as Peking University, is the premier higher education institution in all of China, with the intention of becoming one of the premier learning institutions in the world. Beijing University is a comprehensive university offering Bachelor’s, Master’s, and PhD programs in multiple fields of study. The university was established in 1898 and has been educating the brightest of China since.
1. How important are international students to the growth of the University?
2. Like we have seen in California is their a loss of interest in the STEM majors at Peking University?
3. Does the university offer engineering and technical majors outside of computers and electronics?
Friday, June 15, 2007
Chinese Business Etiquette Review
Chinese Business Etiquette
Scott D. Seligman
In reading this book I realized something. I know nothing about China, not for lack of trying, but attempting to grasp the societal and cultural history and norms of one of the world’s oldest and most prosperous civilizations is not easy. In fact, it is near impossible. However, in reading this I learned that there are many small things that I as a foreigner can know or do that will increase my personal standing as well as prevent offense.
It seems to me as a reader that Mr. Seligman did an amazing job of presenting a wealth of information in a very neat and simple package. It is also apparent that to be a traveler to China for either business or pleasure and not have this book as at least a reference for common questions is like a carpenter without a hammer. This book, though short and simple, provides profound insight that seems that it would be very helpful in at least easing the mind of the foreign visitor.
It was comforting for me to learn as a result of this book that not only as a foreigner am I not expected to know everything but that my simple attempts are typically well received. Most importantly, though I found it helpful to receive the “China for dummies” tips that help to make personal and professional interaction more beneficial to all. Some simple examples are meeting structure. As someone who has attended and presided over meetings large and small I really enjoyed learning about the dynamics of sitting around a table as well as timeliness. Early, for example, is as bad as late often times, because of the importance of hosts being in attendance, prepared, and seated before guests arrive.
I also particularly enjoyed the author’s use of personal experience and the experiences of his colleagues. Though the notes at the end of each chapter provide good insights, the knowledge conveyed through experiences is not only helpful but comforting. One of the most important ideas covered in this book is the realization that not only is it impossible to know everything or always act in the perfectly proper manner but that relationships; business and personal, can continue and prosper after slight faux pas, but not after big mistakes.
The chapter on guanxi I found extremely interesting. Though it seems fairly commonplace in all societies that it really isn’t what you know it’s who you know and who does who you know know, the concept that this can be so regimented into the day to day and in all relations is very interesting. It also seems like the system, though obviously vital to success within China can be an extreme tripping block for those entities that either don’t understand the system or have no comparative standing. Guanxi is so important that it even has power within the judicial system when one is a foreign company attempting to prosecute or sue a local firm one recounting pointed out. It was also very interesting to learn of the role of distant friends. Simply knowing someone of influence and with a wide guanxiwang (network of connections) tends to bind you to both the benefits and rules of this system. Learning how important reciprocation is, but also some of the pitfalls for asking for too much seems to be one of the single most important things that one could learn of when entering the PRC to do business.
This text is one that is a must have, not necessarily a must read, but for those traveling or engaging in business with the Chinese this text is much like the dictionary, you have to have one if only for reference. The availability of key points at the end of each chapter allow this book to be used quite easily as a reference tool, and would be very useful for quick answers or if you encountered a situation you were unfamiliar with. It is important to note though that this book does not have all of the answers and, like dealing with any group of people all individuals need to be treated uniquely, though some standards always remain.
Scott D. Seligman
In reading this book I realized something. I know nothing about China, not for lack of trying, but attempting to grasp the societal and cultural history and norms of one of the world’s oldest and most prosperous civilizations is not easy. In fact, it is near impossible. However, in reading this I learned that there are many small things that I as a foreigner can know or do that will increase my personal standing as well as prevent offense.
It seems to me as a reader that Mr. Seligman did an amazing job of presenting a wealth of information in a very neat and simple package. It is also apparent that to be a traveler to China for either business or pleasure and not have this book as at least a reference for common questions is like a carpenter without a hammer. This book, though short and simple, provides profound insight that seems that it would be very helpful in at least easing the mind of the foreign visitor.
It was comforting for me to learn as a result of this book that not only as a foreigner am I not expected to know everything but that my simple attempts are typically well received. Most importantly, though I found it helpful to receive the “China for dummies” tips that help to make personal and professional interaction more beneficial to all. Some simple examples are meeting structure. As someone who has attended and presided over meetings large and small I really enjoyed learning about the dynamics of sitting around a table as well as timeliness. Early, for example, is as bad as late often times, because of the importance of hosts being in attendance, prepared, and seated before guests arrive.
I also particularly enjoyed the author’s use of personal experience and the experiences of his colleagues. Though the notes at the end of each chapter provide good insights, the knowledge conveyed through experiences is not only helpful but comforting. One of the most important ideas covered in this book is the realization that not only is it impossible to know everything or always act in the perfectly proper manner but that relationships; business and personal, can continue and prosper after slight faux pas, but not after big mistakes.
The chapter on guanxi I found extremely interesting. Though it seems fairly commonplace in all societies that it really isn’t what you know it’s who you know and who does who you know know, the concept that this can be so regimented into the day to day and in all relations is very interesting. It also seems like the system, though obviously vital to success within China can be an extreme tripping block for those entities that either don’t understand the system or have no comparative standing. Guanxi is so important that it even has power within the judicial system when one is a foreign company attempting to prosecute or sue a local firm one recounting pointed out. It was also very interesting to learn of the role of distant friends. Simply knowing someone of influence and with a wide guanxiwang (network of connections) tends to bind you to both the benefits and rules of this system. Learning how important reciprocation is, but also some of the pitfalls for asking for too much seems to be one of the single most important things that one could learn of when entering the PRC to do business.
This text is one that is a must have, not necessarily a must read, but for those traveling or engaging in business with the Chinese this text is much like the dictionary, you have to have one if only for reference. The availability of key points at the end of each chapter allow this book to be used quite easily as a reference tool, and would be very useful for quick answers or if you encountered a situation you were unfamiliar with. It is important to note though that this book does not have all of the answers and, like dealing with any group of people all individuals need to be treated uniquely, though some standards always remain.
Friday, March 23, 2007
Travels of a T-Shirt on the Global Economy
The Travels of a T-Shirt in the Global Economy
Pietra Rivoli PhD
Overview
Pietra Rivoli is an associate professor at Georgetown University’s McDonough School of Business, specializing in international business, finance, and social issues in business. Dr. Rivoli earned both her bachelors of science and PhD from the University of Florida, where her doctoral work was in Finance and International Economics. Dr. Rivoli’s expertise lies in international finance as well as in ethical and social issues concerning business. Given the main focus of the book I would say that her experience and work in the fields of social issues and ethics make her a fantastic commentator on the globalized world of business and the economies that are succeeding on the new playing field.
A brief overview of the book is best served through a timeline of events that are discussed. “T-Shirt” follows the value chain of American cotton from seed, to string, to shirt, to grease rag, and describes the production and political issues related to each stop and locale in a T-Shirts life and death. Some of the most interesting discussion in the book is not that concerning foreign powers but the historical context that is given in relation to our own country. Throughout history the political lobbies are the most powerful people in our country, especially when they represent billion dollar industries. The detail and depth given to the political arena in this book is astounding, especially when the main topic is not a political history.
“T-Shirt” also takes a very hard look at the topic of globalization and analyzes the game, the players, and the critics with careful scrutiny. Most important Dr. Rivoli takes very few positions throughout and leaves much of the decision making to the reader. In essence along with “The World is Flat” this is an essential read for folks with an opinion on the globalization topic.
Significance
“T-Shirt” begins with a look at Lubbock Texas, “the cottonest city in the world”, a key notch in the American Cotton Belt and how cotton has remained at the forefront of the American economy for so long. In fact in the United States has dominated the cotton industry for over 200 years, since the 1790’s. The invention of Eli Whitney’s cotton gin spurred this country’s economic boom and creativity on the part of cotton farmers and lots of support from our government have kept us in the lead in the cotton fields. We also have had a few other advantages that other countries have never been able to duplicate until recently.
Cotton production in our country boomed as a result of British demand, before this cotton producing nations were all about even. As the British middle class grew exponentially in the late 1700’s so did their appetite for comfortable yet stylish clothing, cotton was the answer. Immediately following the invention of the cotton gin the Americans, because of our capitalist nature, seized the opportunity to clothe the British. Seize the market we did, and we have never looked back.
The more interesting story is how we stayed on top, Dr. Rivoli credits “creativity”, and a network of knowledge unrivaled in world history at the time. United States agriculture has been the beneficiary of higher education for a very long time. Because of our capitalist nature we were always willing to find a new system for production that we could sell to someone else and through land grant universities across the country we had cheap researchers to run trials.
As the timeline progresses we see a much darker reality, our industries have also always survived because of a captive labor force, technology and restrictions to free trade. Regardless of our public statement our country is not the biggest fan of free trade. One would think that overtime and as our country’s economy became less industrial and more service based that cotton production would be outsourced. However, because of powerful political allies, like Strom Thurmond, American cotton has always had a home in America. Through multiple farm bills the American cotton farmer has been able to extract as much from the government as possible. Making the government truly work for its people though is no easy task. Through millions of dollars in lobbyist salary the cotton industry has been able to levy high tariffs on imported cotton, garner government money for research in how to use every part of the cotton plant from seed to lint to leaf, and has even received a hearty subsidy check on top of it all. As Senator Hammond said before the Civil War, “Cotton is King”.
From the protected borders of the United States cotton makes its way to China where it is processed. Here Dr. Rivoli paints a portrait of globalization that seems contrary to typical belief. The relationship between the American cotton farmer and he Chinese clothier has made a lot of money for a lot of people, and though the relationship changes the quantity always grows. Since opening up trade with China the American consumer has desired more and more Chinese T-shirts while the Chinese have desired more and more American cotton.
Since 1980 Chinese apparel exports have increased 10 fold, now at over 30% of the world export market, indeed the global marketplace has been good to the Chinese. More interestingly though is the picture of the Chinese factory worker. Dr. Rivoli who specializes in international business ethics takes a surprising stance on the life of the factory worker. She quotes one worker as saying, and I am paraphrasing, that at lest in the factory you get shade and a chair. It seems that for most factory workers the alternative is not much alternative at all. If they did not work in factories they would live in the countryside where there is little governmental support and even less opportunity. Poverty is rampant and for many a factory job is a step in the right direction.
From China the T-shirt returns to the States where, in its finished form, it is only beginning its life. After a short life on the back of an American the T-shirts often find their way into the most competitive and few truly free markets in the value chain, the used clothing market. Dr. Rivoli introduces us here to Ed Stubin, owner of Trans-America’s Trading Company, which specializes in used apparel. After the Salvation Army bin and the thrift store shelves clothing ends up in a place like Trans-America. Here we meet a nimble and intelligent entrepreneur who manages his supply chain closely and understands the needs of his customers. Mr. Stubin’s chief customers are developing and least developed countries like Tanzania.
In Tanzania the used clothing market is one of the largest industries providing great opportunities for entrepreneurs who enjoy high risk and a challenge. Bales of used clothing finds its way to docks where it is purchased by a retailer and sold at the American equivalent of a flea market, a one-stop shop for townspeople where the consumer is as savvy as any American. The mitumba (used clothing) shopper in Tanzania is quite demanding and they know what they want and what they are willing to pay. Retailers embark in an unregulated free market bidding for goods that could only be likened to an American auction, and then only loosely.
Reaction
It is interesting in a book about economics to find that the only free markets are the ones found at the end of the value chain. I found it extremely intriguing to learn how much of each cotton boll is used and how many people are affected by an industry that is for the most part taken for granted by folks who are not involved in it.
The most astounding part of the book in my opinion though was Part III where Dr. Rivoli provides the reader with a history lesson in American economic policy and how free trade becomes such a protectionist mess. I found the topics covered in “T-Shirt” to be both enlightening and inspiring at times. It was very interesting to see how a hard working spirit put into action in a place with so much opportunity like Tanzania can bring great successes to those who want the work. The historical context provided I found both in depth and accurate and was at no point dry in my opinion. Then again I am kind of a history nerd.
The Travels of a T-Shirt in the Global Economy left me very convinced that in the end globalization is a good thing. Although, sometimes good intentions may become skewed or convoluted through politics the end result is an economy that yields many benefits for many people. I would echo what I said earlier concerning policy and globalization, if you have an interest this is certainly a read for you.
Pietra Rivoli PhD
Overview
Pietra Rivoli is an associate professor at Georgetown University’s McDonough School of Business, specializing in international business, finance, and social issues in business. Dr. Rivoli earned both her bachelors of science and PhD from the University of Florida, where her doctoral work was in Finance and International Economics. Dr. Rivoli’s expertise lies in international finance as well as in ethical and social issues concerning business. Given the main focus of the book I would say that her experience and work in the fields of social issues and ethics make her a fantastic commentator on the globalized world of business and the economies that are succeeding on the new playing field.
A brief overview of the book is best served through a timeline of events that are discussed. “T-Shirt” follows the value chain of American cotton from seed, to string, to shirt, to grease rag, and describes the production and political issues related to each stop and locale in a T-Shirts life and death. Some of the most interesting discussion in the book is not that concerning foreign powers but the historical context that is given in relation to our own country. Throughout history the political lobbies are the most powerful people in our country, especially when they represent billion dollar industries. The detail and depth given to the political arena in this book is astounding, especially when the main topic is not a political history.
“T-Shirt” also takes a very hard look at the topic of globalization and analyzes the game, the players, and the critics with careful scrutiny. Most important Dr. Rivoli takes very few positions throughout and leaves much of the decision making to the reader. In essence along with “The World is Flat” this is an essential read for folks with an opinion on the globalization topic.
Significance
“T-Shirt” begins with a look at Lubbock Texas, “the cottonest city in the world”, a key notch in the American Cotton Belt and how cotton has remained at the forefront of the American economy for so long. In fact in the United States has dominated the cotton industry for over 200 years, since the 1790’s. The invention of Eli Whitney’s cotton gin spurred this country’s economic boom and creativity on the part of cotton farmers and lots of support from our government have kept us in the lead in the cotton fields. We also have had a few other advantages that other countries have never been able to duplicate until recently.
Cotton production in our country boomed as a result of British demand, before this cotton producing nations were all about even. As the British middle class grew exponentially in the late 1700’s so did their appetite for comfortable yet stylish clothing, cotton was the answer. Immediately following the invention of the cotton gin the Americans, because of our capitalist nature, seized the opportunity to clothe the British. Seize the market we did, and we have never looked back.
The more interesting story is how we stayed on top, Dr. Rivoli credits “creativity”, and a network of knowledge unrivaled in world history at the time. United States agriculture has been the beneficiary of higher education for a very long time. Because of our capitalist nature we were always willing to find a new system for production that we could sell to someone else and through land grant universities across the country we had cheap researchers to run trials.
As the timeline progresses we see a much darker reality, our industries have also always survived because of a captive labor force, technology and restrictions to free trade. Regardless of our public statement our country is not the biggest fan of free trade. One would think that overtime and as our country’s economy became less industrial and more service based that cotton production would be outsourced. However, because of powerful political allies, like Strom Thurmond, American cotton has always had a home in America. Through multiple farm bills the American cotton farmer has been able to extract as much from the government as possible. Making the government truly work for its people though is no easy task. Through millions of dollars in lobbyist salary the cotton industry has been able to levy high tariffs on imported cotton, garner government money for research in how to use every part of the cotton plant from seed to lint to leaf, and has even received a hearty subsidy check on top of it all. As Senator Hammond said before the Civil War, “Cotton is King”.
From the protected borders of the United States cotton makes its way to China where it is processed. Here Dr. Rivoli paints a portrait of globalization that seems contrary to typical belief. The relationship between the American cotton farmer and he Chinese clothier has made a lot of money for a lot of people, and though the relationship changes the quantity always grows. Since opening up trade with China the American consumer has desired more and more Chinese T-shirts while the Chinese have desired more and more American cotton.
Since 1980 Chinese apparel exports have increased 10 fold, now at over 30% of the world export market, indeed the global marketplace has been good to the Chinese. More interestingly though is the picture of the Chinese factory worker. Dr. Rivoli who specializes in international business ethics takes a surprising stance on the life of the factory worker. She quotes one worker as saying, and I am paraphrasing, that at lest in the factory you get shade and a chair. It seems that for most factory workers the alternative is not much alternative at all. If they did not work in factories they would live in the countryside where there is little governmental support and even less opportunity. Poverty is rampant and for many a factory job is a step in the right direction.
From China the T-shirt returns to the States where, in its finished form, it is only beginning its life. After a short life on the back of an American the T-shirts often find their way into the most competitive and few truly free markets in the value chain, the used clothing market. Dr. Rivoli introduces us here to Ed Stubin, owner of Trans-America’s Trading Company, which specializes in used apparel. After the Salvation Army bin and the thrift store shelves clothing ends up in a place like Trans-America. Here we meet a nimble and intelligent entrepreneur who manages his supply chain closely and understands the needs of his customers. Mr. Stubin’s chief customers are developing and least developed countries like Tanzania.
In Tanzania the used clothing market is one of the largest industries providing great opportunities for entrepreneurs who enjoy high risk and a challenge. Bales of used clothing finds its way to docks where it is purchased by a retailer and sold at the American equivalent of a flea market, a one-stop shop for townspeople where the consumer is as savvy as any American. The mitumba (used clothing) shopper in Tanzania is quite demanding and they know what they want and what they are willing to pay. Retailers embark in an unregulated free market bidding for goods that could only be likened to an American auction, and then only loosely.
Reaction
It is interesting in a book about economics to find that the only free markets are the ones found at the end of the value chain. I found it extremely intriguing to learn how much of each cotton boll is used and how many people are affected by an industry that is for the most part taken for granted by folks who are not involved in it.
The most astounding part of the book in my opinion though was Part III where Dr. Rivoli provides the reader with a history lesson in American economic policy and how free trade becomes such a protectionist mess. I found the topics covered in “T-Shirt” to be both enlightening and inspiring at times. It was very interesting to see how a hard working spirit put into action in a place with so much opportunity like Tanzania can bring great successes to those who want the work. The historical context provided I found both in depth and accurate and was at no point dry in my opinion. Then again I am kind of a history nerd.
The Travels of a T-Shirt in the Global Economy left me very convinced that in the end globalization is a good thing. Although, sometimes good intentions may become skewed or convoluted through politics the end result is an economy that yields many benefits for many people. I would echo what I said earlier concerning policy and globalization, if you have an interest this is certainly a read for you.
Friday, December 15, 2006
The Chinese Century Book Review
Overview
Oded Shenkar holds a Ph.D. from Columbia University as well as degrees in Sociology and East-Asian Studies. This fact combined with his 30 years of Chinese study make him a credible observer of the past, present and future of one of the world’s proudest societies. Dr. Shenkar takes a critical look at many aspects of the modern history of China and paints a portrait of a nation that is too proud to falter in its assent to global superpower.
Dr. Shenkar also addresses the economic relationship between a rising China, a floundering dollar, and a trade liberal United States trading with conservative partners. These topics lead to the conclusion that a new geo-political landscape is on the horizon and China will be a, if not the, major player. The further conclusion is that many of the analogies used to describe the economic growth of China in manufacturing and technology paired with the slow retreat of US domestic manufacturing firms and enterprises are simply misstating the reality. There is a claim in the US that our transition from a manufacturing/industrial economy to a service based economy is natural and really the same as our shift from agricultural to industrial over a century ago. This book outlines reasons why this assertion should be scrutinized and why the United States, and its enterprises, must be much more cautious during this current shift.
Significance
Dr. Shenkar does a fantastic job of tying the current economic growth of China to its rich history. One of the most important analyses in this book is the three points of modern history that Shenkar asserts are most affecting China’s current psyche. He points out that the legacy of the Imperial Heritage of the region has a very powerful effect on the country’s view of its place in the world even today. The Chinese leadership is ever mindful of the fact that China is one of the first real civilizations and for better than 2,000 years during the Imperial rule was the leading civilization on the planet. The current leadership and many of the citizens believe that their current actions are bringing them closer to their rightful place atop the food chain. The Imperial past also lends us insight into why the Chinese model of bureaucratically controlled economics is still working. Quite simply, it is because that is how China has been governed for the majority of its life and individuals and firms understand this. Because of the central planning model all are attempting to gain support from the leadership. This creates much of the infighting that is observed between regions. Imperial rule also shows us why the Chinese are so ambivalent to corruption, there is much that can be gotten away with when the powers that be are many miles away and preoccupied, this philosophy still permeates today and is a serious concern to large foreign businesses operating anywhere in the world.
The next important historical footprint was the humiliation of the country in the early 20th century at the hands of the west. Understanding the offense created by a prosperous Japan with lots of Western support helps us to understand the distaste that this nation has for the West and many other Asian nations. The third extremely important period was the rise of Communism, and the period just following the initial rise of the Party. To many Chinese industry and scholarly leaders this period represented lost time and a hitch in the giddy-up so to speak. An entire generation of managers and employees were negatively affected by the transition, and we are now seeing the next generation be substantially better equipped to compete on the global stage.
All of these aspects of the psyche, tradition, and common understanding in China are neatly packaged and easily digested by the reader. These historical periods really are markers of the progress of a great nation and can be used to help predict future progress.
The final point I will make in summary is the importance of Intellectual Property rights that is being overlooked by the multinationals clambering to break into the Chinese marketplace. Dr. Shenkar makes a very strong case here for why companies need to take this much more seriously and why the Chinese government is very slow to act in curbing counterfeiting, piracy and intellectual property infringement. After reading this book it is my belief that much of the footing in the future economy will be gained or lost as a response to what is done in the realm of Intellectual Property rights in China.
Reaction
Overall the brief history and assertions presented in this book were extremely important for anyone who is attempting to grasp the importance of China and why they are the way they are. The depth of the analysis presented in such a small and manageable package is extremely impressive. This book covered topics from Imperial rule, to education, to American outsourcing, to IP, and how they all affect the American economy, the American workforce, and the future of the globalized economy. This is a very good read for people interested in the forces behind the disparity between Chinese regulation and practice in comparison to U.S. regulation and practice.
The assertions made by Dr. Shenkar on the economic forces at work in the region are extremely powerful but certainly less optimistic than other opinions on the situation. This book takes a hard look at the business of producing or selling in China or anywhere. There is a strong case for IP rights reform presented here and a surprising take on who can make the changes. Though an older text this is still a very powerful package because it makes factual determination and admits that there is no way of predicting the outcome of the Chinese economic assent. However, the final chapter certainly provides for a very insightful look at possible future roles for the two major players in the next century, China and the United States.
Oded Shenkar holds a Ph.D. from Columbia University as well as degrees in Sociology and East-Asian Studies. This fact combined with his 30 years of Chinese study make him a credible observer of the past, present and future of one of the world’s proudest societies. Dr. Shenkar takes a critical look at many aspects of the modern history of China and paints a portrait of a nation that is too proud to falter in its assent to global superpower.
Dr. Shenkar also addresses the economic relationship between a rising China, a floundering dollar, and a trade liberal United States trading with conservative partners. These topics lead to the conclusion that a new geo-political landscape is on the horizon and China will be a, if not the, major player. The further conclusion is that many of the analogies used to describe the economic growth of China in manufacturing and technology paired with the slow retreat of US domestic manufacturing firms and enterprises are simply misstating the reality. There is a claim in the US that our transition from a manufacturing/industrial economy to a service based economy is natural and really the same as our shift from agricultural to industrial over a century ago. This book outlines reasons why this assertion should be scrutinized and why the United States, and its enterprises, must be much more cautious during this current shift.
Significance
Dr. Shenkar does a fantastic job of tying the current economic growth of China to its rich history. One of the most important analyses in this book is the three points of modern history that Shenkar asserts are most affecting China’s current psyche. He points out that the legacy of the Imperial Heritage of the region has a very powerful effect on the country’s view of its place in the world even today. The Chinese leadership is ever mindful of the fact that China is one of the first real civilizations and for better than 2,000 years during the Imperial rule was the leading civilization on the planet. The current leadership and many of the citizens believe that their current actions are bringing them closer to their rightful place atop the food chain. The Imperial past also lends us insight into why the Chinese model of bureaucratically controlled economics is still working. Quite simply, it is because that is how China has been governed for the majority of its life and individuals and firms understand this. Because of the central planning model all are attempting to gain support from the leadership. This creates much of the infighting that is observed between regions. Imperial rule also shows us why the Chinese are so ambivalent to corruption, there is much that can be gotten away with when the powers that be are many miles away and preoccupied, this philosophy still permeates today and is a serious concern to large foreign businesses operating anywhere in the world.
The next important historical footprint was the humiliation of the country in the early 20th century at the hands of the west. Understanding the offense created by a prosperous Japan with lots of Western support helps us to understand the distaste that this nation has for the West and many other Asian nations. The third extremely important period was the rise of Communism, and the period just following the initial rise of the Party. To many Chinese industry and scholarly leaders this period represented lost time and a hitch in the giddy-up so to speak. An entire generation of managers and employees were negatively affected by the transition, and we are now seeing the next generation be substantially better equipped to compete on the global stage.
All of these aspects of the psyche, tradition, and common understanding in China are neatly packaged and easily digested by the reader. These historical periods really are markers of the progress of a great nation and can be used to help predict future progress.
The final point I will make in summary is the importance of Intellectual Property rights that is being overlooked by the multinationals clambering to break into the Chinese marketplace. Dr. Shenkar makes a very strong case here for why companies need to take this much more seriously and why the Chinese government is very slow to act in curbing counterfeiting, piracy and intellectual property infringement. After reading this book it is my belief that much of the footing in the future economy will be gained or lost as a response to what is done in the realm of Intellectual Property rights in China.
Reaction
Overall the brief history and assertions presented in this book were extremely important for anyone who is attempting to grasp the importance of China and why they are the way they are. The depth of the analysis presented in such a small and manageable package is extremely impressive. This book covered topics from Imperial rule, to education, to American outsourcing, to IP, and how they all affect the American economy, the American workforce, and the future of the globalized economy. This is a very good read for people interested in the forces behind the disparity between Chinese regulation and practice in comparison to U.S. regulation and practice.
The assertions made by Dr. Shenkar on the economic forces at work in the region are extremely powerful but certainly less optimistic than other opinions on the situation. This book takes a hard look at the business of producing or selling in China or anywhere. There is a strong case for IP rights reform presented here and a surprising take on who can make the changes. Though an older text this is still a very powerful package because it makes factual determination and admits that there is no way of predicting the outcome of the Chinese economic assent. However, the final chapter certainly provides for a very insightful look at possible future roles for the two major players in the next century, China and the United States.
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