Archive for the ‘Business in China’ Category
What if you had the opportunity to start planning a city in the 1970′s? How different might it look than nearly all the large cities around the world? I’ve been in Shenzhen for the past two days and have received a first hand look at how a city can be managed when it is planned for growth – and a huge population.
With 14 million people (or so it is said in some circles – I’ve found that most cities in China have many different population figures associated with them depending on the source), Shenzhen is soon to be host of the World University Games. This has resulted in seemingly perpetual construction taking place all over the city. I imagine that it is much like what was happening in Beijing proior to the 2008 Olympic Games.
I actually took the subway into China from Hong Kong. I did have to transfer 3 times and haul my bag up and down stairs a few times but I was surprised at how easy it was. The MTR subways in Hong Kong are new, clean, and of course efficient. I took the subway to the last stop in the New Territories and literally rolled into China with my bag. Customs was a breeze as was finding a taxi to take me to my hotel.
I am here in Shenzhen for the Low Carbon Business Development Forum and today spoke as a panelist in one of the sessions. There are some amazingly intelligent people participating and I admit I was a bit nervous talking about a subject (branding and marketing Chinese green technology products in the United States), that I have been getting educated on. I still have much to learn.
The Chinese continully impress me as a warm and inviting people. As my Vistage associate Gary Young wrote in his blog – ‘the Chinese people are extraordinarily honest and honorable – because as he says -they are not a nation of laws.’ I’ve seen nothing that makes me feel differently so far.
The conference in Shenzhen is in University Park – where three different universities share one giant and well equipped library. That makes a great deal of sense to me and is something rarely seen in the United States or anywhere else for that matter.
Roads are multi-laned and have been designed to accomodate the exploding growth of Shenzhen which was a mere sleelping fishing port town only 30 years. Designated a ‘Special Economic Zone’ Shenzhen is known by most people as the place where electronics like the iPad and other cool technologies are assembled and shipped from.
But I see Shenzhen as much more than that. An incubator of innovation and cradle for entrepreneurs, Shenzhen in being adjacent to Hong Kong (which is noted as the ‘Gateway to China’) is becoming the gateway to innovation and green technology.
I hope I get to see more of the city on this trip but if I don’t I’ve a feeling I am going to be back here before too long. And I look forward to that.
Happy Earth Day and Good Friday.
After a 15 ½ hour flight to Hong Kong from Newark my eyes are tired and a bit bloodshot. The efficiency of the transit system in Hong Kong (and Asia in general) is offset by the bright lights of outdoor advertising that is seemingly omnipresent.
My luggage was waiting for me on the carousel when I made it through customs (which took less than 10 minutes). Walking into the carousel there were advertisements left and right as I quickly walked to the train that was waiting to whisk me in to Central Station in HK. No Virginia, this was not LaGuardia.
Ads run on the TV’s on the train and once I arrived and took a taxi (again very easy to find and the taxi line was short) the rampant outdoor ads in Hong Kong put Times Square to shame. I don’t really know the reasons why OOH advertising is so popular in the places I’ve been in Asia – Japan, China, Singapore, and Vietnam.
Just the other day Jing Daily http://bit.ly/e00QUb out of China reported “Over the past weekend, Beijing’s much-hyped ban on outdoor advertisements that promote “hedonism, lavishness and the worship of foreign things” took effect. As Jing Daily wrote last month, the ban is ostensibly aimed at “[easing] public concerns about the country’s widening wealth gap” by ridding the city of advertisements that use words such as “luxury,” “high-class,” “supreme” and “royal” at risk of a 30,000 yuan (US$4,595) fine per infraction.”
So perhaps the OOH climate might be changing on the mainland where I am headed tomorrow but here in Hong Kong the lights are brighter than ever. I happen to like it as it brings home the hustle and bustle of 21st century Asian city life. But then I am partial to Times Square as well.
If you notice them do outdoor ads bother you?
`When I was in Hong Kong last March with my good friend Tom Eastling he offered an idea – why don’t you help Chinese companies market their goods and services into the United States? The moment he said it I was immediately smitten with the idea. After all American and western countries in general look at the rising middle class in China (300 million strong and growing) as a huge opportunity for first movers. And they’re right. Yet at the same time, China’s ‘Go-out’ policy focuses on Chinese companies selling into the United States, North America, Europe and South America.
Armed with that concept I spent a week and a half traveling to Shanghai, Beijing and Wuxi in China last September. Upon my return I quickly found a Mandarin tutor (a terrific Shanghainese woman named Grace Brennan – at least that’s what she is called here in the U.S.) with whom I have been taking lessons twice a week. I am learning the language but I am also learning more about Chinese culture.
This week I am on my way back as an invited speaker as a part of the Low Carbon Business Development Forum to be held in Shenzhen beginning this Friday. My proficiency in Mandarin leaves much to be desired but I will be giving it my best shot during my trip. Fortunately many Chinese people learn and speak English which is a great relief to me as I am traveling alone for the most part this time.
Helping Chinese companies market their products into the U.S. is becoming more prevalent as this past week Ogilvy & Mather announced they were investing in opening a unit (in New York for some reason) dedicated to helping Chinese businesses market to the U.S.. I wonder why that office was not opened in Shanghai. That’s something I’d like to do – open an office for our agency in China to help Chinese companies better understand the U.S. and European markets.
Chinese products are becoming more and more accepted in the United States. iPods, iPads and many other top quality devices are ‘Made in China’ – or at least assembled there. In fact Shenzhen is the city where many of those technology devices Americans use every day are put together. For the record I am neither blind nor insensitive to complaints about working conditions in some of the factories in China. I am also aware of the complaints about the value of Chinese currency (the Renminbi or Yuan) in relation to the U.S. dollar.
Part of the problem is the trade imbalance. Here’s a popular notion – as sales of Chinese products into the U.S. expand, the quality of the products will improve, and wages in China will increase making those products more expensive. Consequently U.S. made products will become more competitive in the process. It’s already been happening and some industries (clothing for instance) have moved out of China to other Asian countries and beyond. The role our company will play will be to facilitate the ‘Going Out’ of Chinese companies into the U.S. and beyond.
I’ve been doing a lot of reading on the Green Revolution in China – and the Chinese are working hard at leading the way in this area. Solar, Wind, and Lighting (both compact fluorescent and HB-LED) are fast growing industries within China. The automobile company BYD (owned in part by Berkshire Hathaway’s Warren Buffet) has opened an office in Los Angeles to build and sell a fully electric car. I am aware that China burns coal at distressingly high levels to power factories and municipalities. That’s what makes the greening of China all the more important.
I am excited to be going on yet another adventure into the Middle Kingdom. I will post a few times from Shenzhen (and Hong Kong). These kinds of trips really stimulate my creativity and thinking in general.
But I find that travel does that for me in general. How about you?
With Chinese President Hu Jintao in the United States this week there was much talk about the state of Sino-U.S. relations. My interest in developing our company’s Chinese business has me keeping a watchful eye for business and marketing news in China. I thought it was interesting that during a week of heightened awareness of the U.S.-China relationship, that Alibaba.com and its Chairman Jack Ma would announce they are expanding their supply network in China. http://on.wsj.com/gIPr16. Full disclosure – we’ve had a couple of meetings with Alibaba.com here in the U.S. and I find the Alibaba.com story to be remarkable http://bit.ly/2vZW75.
It’s no trifling investment either. $ 4.6 billion U.S. is a staggering amount of money. The primary benefit is said to be the ability to expand Taobao.com which is Alibaba.com’s Amazon.com-like online shopping mall. I find it interesting that Alibaba.com CEO David Wei W considers Taobao.com to be more like EBay http://bit.ly/SjMep but that is not what most people think today. What also caught my attention was what Mr. Ma was quoted as saying – “In 10 years, we hope that anywhere in China you can buy a product online, and, at the slowest, it will get to your home in eight hours” This is to be somewhat limited to areas in the north like Beijing, and Tianjin, as well as major population centers in the south (Shanghai and Nanjing for instance). The western part of China is not nearly as developed and would be more difficult to cover with an 8 hour delivery promise.
The idea that you could order something online and have it delivered in as little as 8 hours is amazing to me. Back in the mid-1990’s Amazon.com’s CEO Jeff Bezos made a decision to invest in building distribution centers around the United States. This was at the time when Amazon.com primarily sold books and compact discs. Many people questioned the idea outright and many also thought that move would lead to the downfall of Amazon.com. It turned out to be one of the smartest things Mr. Bezos has done. But Amazon has never even tried to offer something like delivering an order in 8 hours.
I think the same thing will happen with Jack Ma’s decision to have Alibaba.com follow a similar path. Yahoo.com continues to own 40% of Alibaba.com (which was founded in 1999) and I have noted before that this might be the reason Yahoo.com CEO Carol Bartz still has her job. Mr. Ma would like to buy back the interest from Yahoo but Ms. Bartz has not acceded.
For the record Alibaba.com has something close to 18,000 employees in 60 cities and regions, including China, Hong Kong, India, Japan, Korea, Taiwan, the United Kingdom, and the United States. And the company is still growing and is headquartered in beautiful Hangzhou in a Silicon Valley like campus.
You will be hearing a lot more from this rising force in the near future. My question to you is have you heard of them before and what is your opinion and impression of the company?
U.S. Treasury Secretary Tim Geithner is speaking this morning regarding China’s currency and the idea that it needs to strengthen. As many of my blog readers know, on behalf of CGSM, I have made a concerted effort to open business relationships with Chinese companies both in the U.S. and in China.
Along with two members of my team I came back last Saturday from a meeting with a prospective Chinese client’s U.S. team in California. We are working out an agreement with them to help them gain awareness and engagement with American entrepreneurs. The people we have met are really smart and have a good understanding of the American market.
Back to Mr. Geithner whose comments centered on the Renminbi (RNB) or Yuan. The first thing I have come to learn in studying the Chinese people, economy and language is:
1) The Chinese do not respond well to ultimatums. Yes the Chinese government is well aware that its policy of not allowing its currency to float offers their growing economy a chance to blossom faster than if it did not. Chinese President Hu Jintao is scheduled to come to the U.S. this week to meet with President Obama for the last time as Mr. Hu is near the end of his term. The new Chinese stealth fighter plane test this week had U.S. Defense Secretary Robert Gates meeting with President Hu – http://nyti.ms/hfcudT . It was a clever strategy for Mr. Gates to visit China since Mr. Hu would have to see him in advance of his visit to the U.S. since a snub would not be good. This is a better tactic than ultimatums.
2) The Chinese government is socialist, the people are not. The expanding Chinese economy is not completely attributable to Chinese protectionism. Chinese people are all about business and making money and they are willing to work extremely hard for less (at least for now) than other first world nations.
3) There are a large number of huge Chinese companies that Americans have never heard of. Alibaba.com actually may ring a bell to some but my guess is less than 1% of Americans have any idea of what this U.S. $ 10 billion company does. Alibaba.com Taobao site is gaining market share quickly and Alibaba.com has visions of being the Wal-mart of China to some. Ever heard of Sinopec? China Mobile Ltd.?, How about Baidu, Huawei or BYD? If you haven’t, believe me, you will soon.
4) Learning Mandarin is a good idea but most Chinese business people under 35 speak English. They have been studying it for years and some companies (Alibaba.com for example) conduct meetings in China (their HQ is in Huangzhou) in English. I have been learning Mandarin Chinese for nearly 4 months and am fascinated by the language (very different) but also by learning about their culture.
5) China will struggle with social programs as it expands its economy. One of my Chinese associates told me that while she is not exactly in love with her job as a COO of a Chinese social media company, she has to work because there is no support system for her parents or family such as social security or unemployment. They rely on her and she feels responsible to continue to help them. This will become a much bigger issue for China, its people and its government in both the near and far future.
I get the feeling that Americans have a certain fear of China. And let’s face it China has more than 1.3 billion people and that in and of itself is intimidating. But keep in mind that they put their pants on one leg at a time just as everyone else does. China has problems and issues to go along with its successes, and both go hand in hand with China’s emergence as a world power – or dare I say “the” world power in the 21st century.
And that might be the thing that bothers Americans most. The notion that the 21st century is not the American Century. That was the 20th century. We now hold the position of not being the leader in the world economy. It is understandably not easy to get used to that notion.
At least it is not easy for me.