This is China! blog

A Financial Times article analyzing how China’s fiscal stimulus package is being invested as well as some of the package’s shortcomings discussed the employment challenge still facing university grads:

The latest 6.1m graduates from Chinese universities have also been struggling to find work. The education ministry says 68 per cent have been employed so far but independent estimates put the number at only around 50 per cent. More than 1.5m of last year’s graduates are also still searching for work.

At a talent fair next to Beijing’s ancient Lama Temple, 24-year-old Peng Chuan, who graduated with a degree in English in July 2008, has lowered his sights and is looking for work as a waiter. “Salaries in the private sector have fallen so much but some of my classmates managed to get jobs in the government by leveraging their family connections,” he says.

The article put me in mind of a conversation I had recently with a recent Suzhou university grad, who was none too impressed with having a degree. “Lots of people have degrees,” the young Suzhounese told me, “it’s not special anymore like it was maybe five or eight years ago. And it doesn’t make it any easier to find a job. If someone has a master’s degree, maybe other people will think that person is a little bit special, but not too much so.

“Even then,” she went on to say, “people who study so much are kind of stupid in life. They just know how to read read read, but not much else.” So what’s the use of a higher education? seemed to be her point.

For her career path, she, like so many young Chinese, looks forward to starting her own business. What kind of business doesn’t seem much to matter, just as long as she makes money at it.

There seems as well the expectations parents put on children that go to university. Another young Chinese told me how her parents did not want her to become a doctor: “They felt it took too long to make money. So I studied law, instead, because you can get a degree and make money faster.”

A Daily Telegraph article from a couple months ago details some of the sacrifices families must make so their children can attend university.

These are difficult times indeed.

The Financial Times reported yesterday the Chinese leadership sees its stimulus package creating new jobs. Though 41 million jobs were lost due to the global economic downturn, according to the Chinese Academy of Sciences, some 23 million are still looking for work.

The stimulus package and associated big-bank loans went to infrastructure projects and the asset speculation in the stock and real estate markets. So, at least ditch diggers and concrete pourers are for the forseeable future safe in their jobs. However, export markets are still way down, as noted by the retail numbers in western countries and container traffic around the world.

Which made the following passage unusual:

The news about the rebound in new jobs follows a number of anecdotal reports in recent weeks that factories in China’s main export-producing regions, such as Guangdong in the south and Zhejiang in the east, are finding it hard to recruit workers.

Any of the factories that were left standing after the shakeout of 2008 would be struggling to find workers because:

• many factories have moved a bit further inland, to Anhui, Jiangxi and Guangxi;
• workers are finding work in the factories inland;
• or workers are “doing their own thing” in their more remote hometowns, in the interior, where the stimulus package has been predominantly targetted.
• and/or the Hong Kong model of paying workers a pittance for their labor is undergoing a severe trial.

Looks like the good ole’ days of really cheap labor are gone.

Last week I attended a birthday party in Shanghai that doubled as a charity event. A young Chinese professional in her mid-twenties named Grace invited me to take part in promoting an activity she holds close to her heart: helping the less fortunate in China. I work with Grace on occasion as a lecturer for Western MBA programs her company hosts in China. Several weeks before I had discussed with her how the young Chinese affluent were finding fulfillment in their hectic, stressful lives. She had suggested that Chinese charities were a scene of great activity, in lieu for many of seeking a God that met their requirements.

The party took place in the loft of the River South Art Center, on Suzhou Creek. The River South Art Center was historically a warehouse on a tributary feeding the Huangpu River – the famous Shanghai outlet to the Pacific Ocean – which made Shanghai the important entrepot it has become.

At the entrance to the loft was a sign-up counter and small wooden contribution chest for the Chinese charity, The One Egg Project. The One Egg project involves donors making contributions that will help children in the poorest villages in China be able to afford to eat at least a single egg, daily. Apparently, such a simple unit-source of protein makes a quantum difference in the height, weight and academic performance of children. Grace’s desire that evening was to have invitees each contribute at least 100 rmb to the cause, instead of giving her a birthday gift.

Just inside the entrance, off to the side of the central dais, stood a large screen onto which some of the charities displayed videos of the result of their efforts throughout some of the poorest parts of China. A crowd of about two hundred was already milling about, all young Chinese professionals evenly split between men and women. Some were dressed in jeans with laptop computer bags slung over their shoulders, while others were stylishly dressed in evening attire that gave the event an almost-chic feel. Whenever there was a break in presentations by any one of the Master of Ceremonies, a charity speaker, or Grace herself, chill-out music filled the space  and made everyone feel “cool”.

Within the loft itself an array of other charities displayed their causes at tables, counters, and video displays:

• Raleigh, outdoor leadership adventures that contributes to charities;
• Shanghai Young Bakers, which takes teenage orphans and provides free training as bakers in Western bakeries, restaurants and hotels;
• Shokay, which sells wares made of yak wool from Mongolia;
• The Zhejiang Xinhua Compassion Education Foundation;
• The Xingeng Workshop, a volunteer organization that helps stricken villages stricken get back on their feet;

…and others…

I’m glad I made the trip into Shanghai specifically for the event, which was one of the nicest and most creative birthday parties I’ve ever been to anywhere in the world. At the end of the evening Grace announced that over 300 guests had contributed more than 38,000 rmb to The One Egg project. My eggs will go to a little girl name Huang Ling, an eighth-grader in Wangmin Village, Xiji County, Ningxia Province.

I hope it makes a difference.

During a recent visit to the Yunnan resort town of Dali a long-time Western resident told me he knows whenever he uses a computer in any of the local internet parlors the camera that sits atop the computer monitor is not just there for his use in connecting with friends and families overseas. “They take the user’s photo, just like at the automatic teller machines,” he told me. He’s well-acquainted with the head of the local censorship bureau, a department within the Dali police jurisdiction. “We watch your address for any ‘spikes’ in activity,” the officer had told him, only half-joking.

The New York Times wrote a couple days ago that:

News Web sites in China, complying with secret government orders, are requiring that new users log on under their true identities to post comments, a shift in policy that the country’s Internet users and media have fiercely opposed in the past.

Until recently, users could weigh in on news items on many of the affected sites more anonymously, often without registering at all, though the sites were obligated to screen all posts, and the posts could still be traced via Internet protocol addresses.

It looks like the loss of face from the Green Dam debacle this past summer taught the powers that be they should be just a little more sneaky in shadowing internet users.

Who knows, maybe one day censors will have snuck onto Chinese home computers software that instructs built-in cameras to take a snap shot of users whenever they log onto, say, QQ, to chat with friends.

Say cheese!

Friends and I are have been having a tough time this summer reconciling the increasing sophistication of our home and office appliances with the level of service that comes with the machines we depend on so heavily. There seems to be an inverse relationship between the two: the more sophisticated the equipment, the more inept the service representative. Another mathematically valid observation we agree on is: the more dependent we are on the appliance, the more moronic the service representative. And then there is the corollary that dictates the more moronic the repairman, the more arrogant and even patronizing he is.

Certainly I’ve experienced this in the office environment, where IT swaggers to the desk to fix the signature-option in Microsoft Outlook, and then, two hours later, has reinstalled the operating system and all the applications in Microsoft Office. Meanwhile, while you are quizzing the techie as to what justified the re-install he launches into a techno-jargon made worse by the Chinese language filter through which the professor is lecturing you on the finer points of your hard disk’s refresh rate. A good friend of mine recently had the misfortune of asking an IT service provider for anti-virus software to be put on his computer, only to be backing up all his data four hours later while the computer was temporarily stable: the repairman had inadvertantly fried the system and didn’t know how long my friend would be able to successfully boot up. My friend is still unsure whether a complete reformatting of his hard disk and reinstallation of the operating system and applications will indeed protect his computer from viruses; after all, the repairman succeeded where the trojans and worms had failed. Perhaps my friend should invest in anti-repairman spyware.

Meanwhile, on the home front, a couple goofs from Panasonic – one very tall and muscular, untalkative; and the other small and squirrelly with a penchant for saying “yingaide!” (“of course!) and “mei wenti!” (“no problem!”) – wasted an hour of my time as the small one held the rope that supported the big one as the big one scrambled over the wall of the balcony to poke at the air conditioner unit. When I’d gone to the fridge (which was still working) to fetch a beer for myself the two quickly packed up and were out the front door, the little guy calling back to me “mei wenti!”. I went to the elevator before the doors sealed their escape and told them both to come back to the apartment to prove to me the central unit worked. I turned on the home office air conditioner to 16 degrees Celcius; turned on the central air con in the living room to the same temperature. After all, they had at least proven they could defy gravity (or that the little guy was indeed pretty strong, though that had yet to be truly put to the test with the big guy’s actually plummeting to the ground twelve floors below). I told them the home office temperature was the baseline, and, as such, what was blowing out of the livingroom unit was at best room temperature. “Mei wenti!” shorty piped up, “It’s a new unit; it just needs a little time to come up to temperature.” “How long?” I queried. A shrug, a blank look. I told them to get out.

Two days later an HVAC technician with very stinky feet managed to gouge the stained and polished planks of the flooring with the panel that slipped out of his hands as he was removing it from the ceiling. That was just after he nearly put his oily, blackened hands all over the cream upholstery of a dining room chair (the yelp was enough to startle him into realizing we may not be agreeable with his cavalier approach to clean furniture), and he left footprints from the patio back to the livingroom and back again several times. In the end, he said sagely, “They gave you a bum unit, and the decorators did the wiring all wrong.” Of course, as a central unit, that means in China tearing out the ceiling and replacing everything. I wasn’t impressed. And he still had stinky feet.

As China works to establish a service industry and eventually a services outsourcing sector that is supposed to cater to the world, the companies that place their products in our homes and offices have an uphill battle in turning round centuries of “I don’t cared-ness” and “It’s not my problem (even though I’m still supposed to be paid for my trouble)”. Eventually, manufacturers here will have to learn it’s much easier to make a chair than to stand behind it with pride if they want to become outstanding companies in China – and in the world.

The world was shocked last year after the Olympics when it was revealed that China’s largest producers of milk and milk-products had laced their offerings with a plastic derivative, melamine. Fast-backward to the year 1851, when the British public learned during London’s Great Exhibition that the green tea they had been drinking for nearly two hundred years had been laced with cyanide and gypsum (calcium sulphate dehydrate). The blue color of cyanide and the yellow color of the gypsum combined to make a green dye that satisfied the British tea drinker’s eye for uniformity of color. The Chinese had known for generations such consistency in picking was near-impossible, especially since they had for decades been selling the British the third- and fourth-flushes of their country’s most strategic asset – Tea.

Such is one of the revelations found in the most fun and exciting new book I’ve read this year. For All the Tea in in China: Espionage, empire and the secret formula for the world’s favourite drink, by Sarah Rose, tells the story of how Robert Fortune, a Scottish gardener and botanist, infiltrated the interior of China disguised as a Mandarin “from north of the Great Wall” to steal tea plants, tea seeds and the secrets for making green and black teas. Mind you, he did this during the mid-1800s, when it was highly illegal and certainly inadvisable to be caught, drawn and quartered as a Westerner traveling beyond the permissible foreign concessions on the east coast. As an avid tea drinker and collector of Chinese teas and paraphernalia, and having been taught the dark art of preparing Wulong tea, I just couldn’t put the book down.

Aside from Fortune’s personal adventure, which Rose tells compellingly, she explains the geopolitics and macroeconomics involved in tea’s being at the center of world trade for nearly two hundred years. The book also discusses the genesis, triumph and demise of the East India Company, the first true multinational in the world and arguably the most enduring until Parliament “revoked its charter at the stroke of a pen” in 1857.

With Fortune’s successful transfer of Chinese tea plants and processing techniques to the Himalayas, to what is now commonly known as Assam and Darjeeling, and with the British quite queasy over the thought of drinking more green-colored tea, no matter how authentic, the way was open by 1852 for Britons to entertain drinking black tea. Until Fortune’s successful run of corporate espionage, the West actually thought black tea grew from plants different from those of the green tea they had become accustomed to. Fortune illustrated that the color and taste of black tea came from certain varieties of green-leaf tea that underwent a more stressful process of refinement than is found in making green tea. The surplus of sugar poured into Britain from the British Caribbean colonies made drinking the more-bitter black tea a pleasure for all classes in the newly industrialized society.

Of course, in all this, the poppy and its addictive syrup cannot be ignored, a history Rose writes about frankly and unashamedly. Another interesting historical point was that after the Second Opium War, in 1857, when China figured “if you can’t beat ‘em, join ‘em”, China sent its own spies to India to cop the poppy seeds and the secret for processing opium to undercut British prices to customers.

So get out your Brown Betty teapot. Get the book. Read it. Learn and enjoy.

And remember: take the tea to the water – not the water to the tea.

This past weekend the Financial Times published an article titled, “An Accident Shows How China Treats Consumers,” a sad and infuriating story about an American small business owner who was badly injured in the mid-1990′s by faulty pyrotechnics produced by a mainland Chinese State-owned Enterprise (SOE). Since then, Robert Silverman has been seeking justice to cover the costs of his ongoing medical treatment and inability to ever work again.

The article interlaces an interview with Silverman with a narrative about the ongoing legal wrangle and observations about the way SOEs are managed in China:

“These [top management jobs] are very political positions,” says Greg Anderson, a former financial executive with broker Charles Schwab who now studies Chinese business at the University of California at Los Angeles. The goals of Chinese state-owned companies’ chief executives are simple, he says: to “get bigger and ensure that nothing bad happens”. Promotion depends on them; anything less spells relegation.

“It’s all about the CEO extending his reach, building up his social resources and his power base,” says Anderson. “One never knows when one may need to call in a favour in order to complete a business deal, stay out of jail, get a job for a relative, etc…” The cultural imperative also underpins a sense of caution; wanting to avoid mistakes at all costs. “SOE leaders may want to take big, high-profile risks (and of course some do), but generally they prefer to play it safe because to aim high and to lose could cost them a very comfortable retirement. The capitalist manager’s retirement is tied more to corporate success as defined by profitability.”

Ultimately, though it will be a long time before Chinese SOEs, especially those seeking respect and credibility in the international marketplace, will step into the light of accountability, and act responsibly from the moment of product conception:

The culture that underpins Chinese business, that is, means the fear is of getting caught rather than of doing harm. And that is bad news for all those millions of global consumers buying the billions of products that carry the legend “Made in China” and thinking that they have the same kind of comeback they might have in the UK, say, or the US.