Historic Chinese Government Envoy Set to Visit Taiwan October 31, 2008
Posted by jasonbarber in China, Taiwan.add a comment
On the surface this may not seem like big news, but this is HUGE news. I go with my wife and other business associates on “Envoy’s” to Taiwan all the time, but I am not part of the Communist Chinese Government.
A really quick, simplified background to lay the ground work of why this is so important:
In 1949 after a bitter civil war (kind of) that spanned the greater part of the previous two decades the nationalist Party lead by Zhang kai Shek ran off to Taiwan and Mao and his buddies took the role of governing power of China. Where things get ugly is because for the next 30 years, Zhang and his cronies over in Taiwan maintained that they were the “true” government of all of China. At the same time Mao and his communist government over on the mainland maintained that they were the “true” government of China including Taiwan. To make things even more uncomfortable was that until the 1980’s the international community incredulously viewed the Taiwanese based “Chinese” government as the real Chinese government, giving the 300 million communists across the pond on the mainland no status as a legitimate government at all.
To make things worse, the Taiwanese were a part of the three country trifecta (Korea, Malaysia and Taiwan) that totally kicked-butt from an economic standpoint for the past couple decades, which I think somewhat embarrassed the mainland, or at least made them envious. The situation is obviously a little different now. Taiwan no longer maintains that they rule China, China still maintains that Taiwan is a province of theirs, and both sides kind of look down on each other.
Two paragraphs cannot do the Taiwan-China issue justice, but to make a long story short the two sides are not really friendly. Even though they are both “Chinese” and are way more similar than they would like to admit.
It will be interesting to see how Taiwanese react to this truly historic event. (Oh yeah, Taiwanese love to protest, so don’t be surprised.) I personally think that the two nations need to get along. But I would love to hear from any Chinese or Taiwanese folks who have an opinion on the subject. (I am pretty sure most all do.)
It’s Going To Be a Red Christmas For China Factories October 29, 2008
Posted by jasonbarber in China.add a comment
For imagery sake I would say that Chinese factories will be seeing blood, or maybe “red in the face,” but the red that they are really going to be seeing is on the balance sheet!
According to this Forbes.com article Chinese officials expect up to 20% of factories in cities such as Dongguan, Shenzhen and Guangzhou will be closed by the Chinese new year. (End of January)
That is approximately 9,000 factories. That is a big number. Made in Chinese goods are in less demand around the world, and this is putting the hurt on Chinese factories.
“Rising raw materials and labor costs, the appreciation of the yuan and a rising product-safety bar for their products has crushed small manufacturers in the Pearl River Delta since last year. The slowdown in export markets on the back of the credit crunch has escalated the rate of closures.”
China’s economy is still booming, but the boom is a little smaller than it has been in the past. I wonder what these mass factory closures are going to do to the already decelerating economy? Many predict (and I tend to agree) that this is going to accelerate the shift from low-tech manufacturing to high-tech products and services faster than planned. Which is good for China, eventually.
Greenpeace: China’s coal use cost it $248B October 28, 2008
Posted by jasonbarber in China.add a comment
BEIJING, China (AP) — China’s reliance on cheap coal to fuel its economy cost a hidden $248 billion last year through damage to the environment, strain on the health care system and manipulation of the commodity’s price, according to a report released Monday by Greenpeace.
I have to admit that my initial reaction to the above headline was, “hmm, that is like another Olympics every year.” That is more than 7% of China’s GDP, and accounts for 70% of their energy. I can also say, before you jump all over China for burning mountains of coal, remember they are doing the same thing the US and Europe did as well in the past. hey, the US STILL does is.
What really caught my attention was a little statistic of at the bottom of the CNN.com post: 12 people die every day in Chinese mines. And that is only the ones that are reported. Many are assumed to not be reported becasue they are illegal operations.
Here in Utah, 6 people died in a mine collapse over a year ago and the community has yet to get over the trajedy. It was national news. People do die in US mines, but when it happens it is a BIG DEAL. We are talking about human life here, it should be a big deal. This is clearly a problem.
One last note, the report noted in CNN.com’s article was presented by Greenpeace, for whatever that is worth. I honestly don’t know what to think about Greenpeace, but that is another post for another time.
Chinese Vow to Improve Food Safety October 27, 2008
Posted by jasonbarber in Uncategorized.add a comment
China Premier Wen Jia Bao spoke at the 43-nation Asia-Europe Meeting summit in an attempt to ease the fears of the world concerning the latest China product issue, with melamine still at the center.
Wen wanted the world to know the crisis involving tainted dairy products will spur the introduction of China’s first major food safety law and will ensure food exports meet international standards.
Wow, the FIRST food safety law. Unfortunately I don’t know if the world is ready to believe China just yet. The world wants to believe, I want to believe, but until they prove that they have made the necessary changes that they promise they are working on, I am not going to bet the farm.
What I will bet on is that the government WILL try to make the necessary changes. They are too ashamed of the problems they have and they have the power to make broad sweeping changes better than most any other organization in the world.
I wish I could say this is the last post concerning fertilizer ingredients in baby food, but I have my doubts. To repeat my opinion one more time, I think that China is learning and will change. I am a big fan of the reforms I see the government carrying out, and I think all the issues that they are having and will continue to have are unfortunate. But that can not be an excuse if China is to garner the international communities respect.
Chinas Economy vs. The Olympics October 24, 2008
Posted by jasonbarber in China, Doing Business In China, Olympics.add a comment
In my post Wednesday I mentioned how some blame the Olympics for China’s economic slow-down (if you want to call it that.) That got me thinking, the Olympics and world economics, two topics that have been dominated by China lately. Have the Olympics really hurt the Chinese Economy? So I started looking around, and this is what I found:
An article dated back to August 18, 2008 from the China Daily News Agency had this to say: “China will not suffer from a “post-Olympic recession”, senior officials said yesterday, because of the scale and potential of its economy.
“The fundamentals propelling the country’s economic development over the past 30 years will remain” even after the Games…”
I guess the US economy going down the drain is not a fundamental propelling the country’s economic development over the past 30 years. WRONG. The rapid and some would say astonishing economic development China has seen over the past few decades has a lot to do with the US economy. But that is another story. We now know that the economy has slowed, so those “senior officials” were wrong, but are the Olympics to blame is the question we are out to find an answer for.
Well my research was pretty easy. The answer is no. Here is why.
Leading-up to the Olympics and throughout the duration of the games thousands of Chinese factories were shutdown for periods of time in an attempt to curb the rampant pollution problem that plagues Beijing. Many of these factories have struggled to “catch-up” and many have gone under. In the ultra competitive Chinese business landscape time matters and factory closure is not be good for business. So you could argue that the Olympics have hurt the Chinese economy, but really the above issue has only exacerbated a larger issue, not caused it. The bigger issue of course being the world-wide economic decline (free-fall, drop off a cliff or whatever you want to call it). So we will let the Olympics off the hook this time.
I bet London and is praying for a quick economic turnaround right about now. (2012 Olympic venue.)
Click HERE to read an older, but good article explaining some of the issues surrounding the Olympics in China.
Breaking News: All of Europe Just Offended China October 23, 2008
Posted by jasonbarber in China, Chinese Government.add a comment
How is it possible for all of Europe to offend China? This is how.
I guess this is just political posturing.
I have always been surprised when a comment like this has been made by the Chinese government concerning these types of issues. Every time The US backs Taiwan for whatever reason, or France asks China to stop supporting criminals in Africa, or some one dare mentions that maybe the Chinese Government and the Dali Lhama should sit down and talk, a threatening statement is sure to follow authored by the Chinese government.
The reason I am always a little surprised is because over the past 100 years the Chinese government has been notorious for not caring what anyone thinks about them, for better or for worse. If they really meant to do what they say, why don’t they do it? I have no idea what they mean by “seriously harm relation,” and I think I share the opinion of the majority. Not to say that only China does this, every country does. But a human rights issue like the above mentioned award just seems like the last issue China should be worrying about. As a kid I learned to pick and choose what was really worth fighting for. China should do the same.
China’s Economy Not Invincible October 22, 2008
Posted by jasonbarber in Uncategorized.add a comment
China’s economy has held a high standard of double digit growth for years, until now. With the rest of the worlds economies struggling China’s economy was sure to slow too, right? The answer is yes, but the rate of the deceleration has come faster than most expected.
It makes sense I guess. If you are often considered “the worlds factory,” and the world is tight in the wallet, who is going to buy the stuff that you produce? But before we go any further, I must add that although China’s economy is slowing, it certainly has not stopped.
Forbes.com’s Paul Maidment put it this way in an article on the decelerating Chinese economy. (Click here to read the whole article) “The consensus forecast among analysts had been for 9.7% GDP growth. China’s growth rate has now slowed for five quarters in a row.” 9.7%, that is really good, for most every other economy on the face of the planet, just not China.
Weak exports are a main issue, but another villain is actually the Olympics. Factory furloughs for the Olympics held back a lot of factories that are now struggling to get back on their feet as the world economy slows.
It will be interesting to see how the communist government handles this situation. As the general populations prosperity has risen they have been generous in looking the other way to some of the governments “controls” and restriction of freedoms. But unrest is also growing right along with bank accounts. My feeling is that people will be a little less forgiving when money isn’t so good. We will see.
In other related news one of the main toy suppliers for Mattel, Hasbro and Disney has filed for bankrupcy.
Chinese farm land for rent October 20, 2008
Posted by jasonbarber in Business Culture, China.add a comment
Since last week the Chinese Communist Government has taken a big step, or should I say another big step in the direction of capitalism. (Although I would argue that they are more into capitalism than we are!)
The Chinese government has passed new rural land reform that allows peasants for the first time to be allowed to trade or rent out their land tenancies. This is still a step away from privatizing land completely.
Remember ALL land in China is owned by the government and leased or lent to people companies etc… So this news is especially big. These reforms are to take place next year in May.
The hope is that China will be able to be more efficient in using what little arable land they have. It is also hoped that these latest reforms will help curb anger and riots that have plagued the government. It seems almost ironic to me that the “socialist” Chinese government has deemed increased capitalism the only option to try and fix a “lack of food” problem. Not that I knock their move in this case.
Read the entire article here at www.forbes.com
Meeting face-to-face is a must! October 15, 2008
Posted by jasonbarber in Business Culture, China, Doing Business In China, Manufacturing/Sourcing, Strategy.add a comment
I was having lunch with a friend today and we began discussing communication between companies and people. We eventually went down the road of cross-cultural communication. There are clearly hurdles in either case, but they are often magnified when it comes to cases of international business and the need to communicate across cultural and language barriers.
One of the keys to sucessful communication and long distance relationships (really any distance relationships) is a face-to-face meeting.
Example 1 – Before a face-to-face meeting:
A US company uses a vendor in China to produce a product. The US company refers to the vendor as the “factory in China,” or “the factory,”or even just “China.” The US company does not really have any idea of who is working on their project, they just know “a factory” or a “company” is taking their specifications, drawings, designs, instructions or images and producing something. The US company really has no connection on a personal level, just a paper level. On the other end, the only interaction the Chinese factory has with the US company is a PO and a dozen hastily composed (often frustrated or indifferent) emails. They are making products or providing services for “another US company,” but it may as well be for an alien from another planet. They would not know the difference.
Example 2 – After a face-to-face meeting:
The US company now uses names like Mr. Liu, the factory manager, when referencing the factory. Correspondence and logistics are worked-out with Cindy, Mr. Liu’s assistant. She is the one who met you at the airport with the good English who thinks you look like Tom Cruise. The US companies’ engineers now cooperate with James Wong and Steve Chen, the factories’ engineering managers, not “the Chinese engineers that are always messing things up or misunderstanding specs.” The US company is now working with people, and people that they know. The two sides now see each other as a team members working on ONE big project. Naturally the US engineers are a little more careful to make sure a spec is clear and understandable so James and Steve can understand it. People working with people, not just a US engineering team and a Chinese engineering team. Of course the benefits are reciprocal. Steve and James as well as everyone else in the factory try a little harder to make sure communications are a little clearer, samples are a little better and production deadlines are met with more urgency. Plus, when times are tough it is much easier to negotiate terms with a “friend” or “acquaintance” rather than a stranger.
You can never truly understand someone you do not know, and that goes for businesses as well as people. If you don’t understand businesses and the PEOPLE that make-up those businesses that you work with, you will never be able to work as efficiently as is potentially possible. A face-to-face meeting is a really good place to start.
Learn a Little Something About China October 9, 2008
Posted by jasonbarber in China, Doing Business In China.add a comment
Everyone has an opinion about China. Amazon.com returned 411,930 results when I searched for China under the book category alone! Here is the Link 26,036 results when I searched for China business under the same category.
With so much information about China available I would advise everyone of one thing:
As you learn more about China, be careful that you do not read a book about how to do business with China, or read an article, hear a presentation, take a class etc… and think that what you have learned covers everyone and everything Chinese. As School House Rock (I think) taught us, “knowledge is power.” So read that book on Chinese business. Take that class and attend that presentation. But be ready to use your brain and think. But please read a good book on China. It will be well worth your time. Below are listed three books that changed my life. And they are not even about business.
| Red China Blues | Wild Swans | Son of The Revolution |
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I have always liked the philosophy that “our differences individually, make us stronger as one.” Be careful when it comes to stereotypes, they can get you in trouble. On a closing note, check in next week when I share two Chinese stereotypes that are true. I have proof!
