Check out a recent Marketplace radio interview in which the intrepid Rob Schmitz interviews me during a National Public Radio report about how energy trends in China are impacting companies – foreign and domestic – doing business in the country.
Listen to the podcast report and read the transcript of the piece here.
It is certainly laudable how Chinese citizens may have held the central government accountable for the railway mishap, but they’ve hardly slowed down their own frenzied grab for wealth. The central authority has ordered safety and quality inspections of the miles of track and thousands of control systems that support the largest high speed network in the world. The CSR, makers of the trains for the highly publicized Beijing-Shanghai line, has even recalled more than forty of the cars built specifically for the line. Heads are rolling, with those with leadership responsibility connected to the mishap last month of the Hangzhou-Wenzhou line coming under scrutiny for their roles in the disaster. Beijing has even ordered the trains slow down from their unsustainable speeds: trains with a top design speed of 350 kilometers per hour will be lowered to 300 km/h, and the trains designed to run up to 250 km/h will operate at 200 km/h. But no one seems to be tapping the breaks for the society at large, despite economic figures.
Here on the ground, Chinese society – or rather, Chinese people – are still impatiently slamming up high rises like there is no tomorrow, driving recklessly through increasingly congested roadways, and flipping properties like a cook making pancakes on a Sunday at a crowded Iowa diner. Conversations in tea houses and coffee houses and restaurants are about business – or about money. Never have I heard between sips of lattes by women in vertigo-inducing pumps or men toting man-bags a philosophical discussion about the state of the State or a hearty debate about the direction in which the society is going. It’s all about money: where to find it; how to get it; how to show it off.
CCTV announcer Qiu Qiming said it best:
“If nobody can be safe, do we still want this speed?… Can the roads we travel on in our cities not collapse? Can we travel in safe trains? And if and when a major accident does happen, can we not be in a hurry to bury the trains?” China, please slow down. If you’re too fast, you may leave the souls of your people behind,” he said.
China is still in the fast lane, with little inclination to slow down.
Katherin Hille writes on the FT BeyondBrics blog about the terrible way foreign media and then American diplomatic staff were treated as American Vice President Joe Biden began to speak during a formal gathering that included Vice Premier and heir apparent to the People’s Throne, Xi Jinping. Hille writes that just as Biden started talking about the economy, “Chinese security staff and foreign ministry handlers started pushing media out of the room, drowning Biden’s voice out with calls of ‘it’s over, it’s over, let’s go’.” American White House and diplomatic staff sided with the journalists and were themselves physically shoved out the door, as well. Meanwhile, ole’ Joe soldiered on through the kerfuffle with his speech, which sagely pronounced that the world’s economic stability rested on Sino-American cooperation. Which was sadly missing during the showcase basketball game between Georgetown and the Bayi Military Rockets, a local Beijing club. The basketball game ended with time to go because of an on-court brawl between all the players and some spectators, as well (video).
Vice President Biden missed that shoving match, though, as he had attended the Georgetown game in Beijing the evening before with another local team. Most Chinese in the weibosphere seemed embarrassed by the incident, the video footage of which censors wiped from Chinese cyberspace.
And likely no Chinese outside the impatient ministers in attendance at Biden’s speech knew anything of their leaders’ impoliteness to a foreign dignitary.
Nevertheless, the Georgetown players must accept as part of their introduction to Chinese culture and society that their unfortunate experience is pretty much a way of life for the average Chinese. Typically, though, foreigners have to wait several months before moving from theory to lab in the exhausting course called “The Chinese Way 101″.
I do have a sense, though, that come the hand-over of the keys to the throne next year, relations between the two countries will become increasingly fractious as China continues to signal just how much it has to learn about the world outside its borders, and about the nuances of detente and diplomatic relations.
The tone at the top is dissonant.
The folks at Bachelors Degree Online pointed out a rather nice list of Chinese classics in translation (and more updated fare, as well) that anyone who would like to gain a greater sense of Chinese culture and modern society would likely benefit from reading. I’ve only read a couple on the list, and seen the classic soap operas upon which they’re based. My favorite is The Water Margin, which has wonderful fight scenes and characterizations big as life.
Enjoy. 
While posting my first-ever video on Youtube I ran into a bit of a branding problem. The video promotes the sort of China talks I deliver to corporations and at conferences. Originally, I thought to name the video “Bill Dodson Speaks on the China Trends Impacting Business and the World.” Wordy, I know. But that wasn’t the problem.
Whenever my video displayed for viewing, a videotaped service of a memorial service for one deceased “Bill Dodson” was top of the list of other videos “like” my own.
Well, I considered, that would certainly be confusing for viewers of my Youtube video – and potential buyers of my book and perhaps speaking services – if they thought I was already dead.
So I changed the title of my video to “The Critical China Trends Impacting Business and the World” (still wordy, I know; but got to try to pick up as many keywords as possible 
) No more memorial listing, then. Though authors supposedly sell better posthumously than when they were still alive and kicking.
Check out the video here.
After I had delivered a book talk (about China Inside Out) to about 60 members of the British Chamber of Commerce in Shanghai a young Chinese lady approached me and said, “I’m having a Naked Marriage”. She seemed confessional, as though she was committing some great sin in the eyes of the Almighty. I had been telling the group – which was eighty percent Westerners – about how the inflated values of everything from property through weddings and even wedding rings were blocking young Chinese couples from fulfilling social wishes for a grand send up to matrimony. “Naked weddings” saw couples basically living together, marriage certificate in hand and that’s about it: no property, no dowry, no wedding ring, no wedding banquet (gasp!). Half-naked weddings at least net the girl a wedding ring.
The young lady at the BritCham talk told me that both she and her lad were professionals working in Shanghai and that together they could not afford to buy a flat. She was from Wuhan, where her family still lived. Her parents didn’t like her suitor, who was from Harbin. He didn’t have any money, they said. Apparently, the young fellow’s parents didn’t much like her, either; I supposed they figured their son should be marrying into money there in Shanghai. She told her father she wanted to marry for love.
He told her, “You’re being unrealistic”.
“I told him I didn’t want to be caught up in a bad marriage and work a job I hated just for money,” the young lady explained to me.
“No one likes their job,” she told me her father shot back.
How ever the saga ends – or the next chapter begins – it is refreshing nonetheless that a generation gap in China just may see a revision of social values thirty years of the Cultural Revolution were unable to expunge.
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My wife recently told me an uncle of hers in Hefei, Anhui Province, is set to make a lot of money constructing a five-story residential building. He and his partners will sell the units on for a total of 50 million RMB, and he’ll pick up 20 million RMB. The fellow has no experience in the construction industry. My wife qualified her story with, “That sounds like too much money to make; the quality of the place can’t be good.”
A friend – an insider in the construction industry in the Yangtze River Delta – has been shedding a bit of light for me the past few months on the inner-workings of China’s construction industry. My friend – I’ll call him Ralph – has been working for a privately owned, government-invested construction company. As oxymoronic as that sounds, that’s actually how the business is structured. My friend is charged with making sure that money properly passes hands from local government representatives to construction bosses and back again in a dizzying play of guanxi. He is well compensated for his work, which also involves getting groups of workers to work together when they typically just quibble with one another and point fingers when the going gets tough.
Ralph himself finds a colored plastic bag of money on his desk once a week. Business has been good in the city in which the company builds, and he is steadily taking on more responsibility, so the contents of the bag are growing. I’m not really sure if Ralph deposits the money in a bank account or not.
Ralph has four bosses, none of whom do much more than smoke cigarettes in their offices, drink tea with friends who pass buy, and drive home and back to work in their BMWs and Mercedes. Ralph is sure the manager to whom he most directly reports is illiterate. He has to go to great lengths to explain documents and spreadsheets to the boss, who is in his late fifties and filthy rich.
For the most part Ralph – a high-energy, Type-A soul – enjoys the work. He gets to bash heads together to get things done and his bosses like him. The local government likes him, too, because he is good with working with the Western customers the local government enticed to the area and manages their high expectations for transparency, accountability and transparency of operations. Not all Ralph’s challenges involve people, though.
His most recent adventure involved the walls and ceiling of the offices in which he worked literally melting in the torrential rains we’ve been having here in the Yangtze River Delta. I can only suppose the construction company did not mix the cement well enough or did not allow it to set or some other technical reason I have no clue about.
Still, the incident does make one wonder about the rest of the structures the construction industry here in China has built in such a money-soaked frenzy. Just how built-to-last is modern Chinese society?
I’ve always advocated that looking to what Wenzhou business is doing around the country is a leading indicator of where the rest of Chinese business will be following. They were amongst the first Chinese to burst onto the export manufacturing scene in the 1980s: Zhejiang province – compared with northern China, especially – was relatively free of the encumbrance of State-owned Enterprises. They were also amongst the first of the migrant workers to settle in the periphery of Beijing in the early 1990s to set up small manufacturing and trading operations, and to have their settlements destroyed and the migrants sent packing home.
Their revenge since that time has been to build an export base in the city that manufactures the majority of the world’s trinkets, including cigarette lighters 60-percent, apparently), creating one of the highest concentrations of millionaires in the country. Wenzhou wives are reputed to work in local circles to pool their money to buy up real estate around the country, in cities in Shanghai, then to sell off the properties after they’ve risen in value.
Now, Wenzhou is signaling exporters are increasingly having a difficult time getting bank loans to continue or expand operations. The Wall Street Journal reported, “that 90-percent of Wenzhou’s 360,000 small businesses” are not able to get loans for their businesses from local banks. So, what, you might say, it’s been tough for most small and medium sized businesses in China anyway.
Even Chinese consider Wenzhou people special businesspeople, however. Wenzhounese are especially cliquey. They have especially tight ties within their business community and with one another throughout China. The tight circles of relationship and reciprocal obligation are called guanxi in China. So, if Wenzhou guanxi with their local banks is not enough to facilitate loans with their own ilk, that’s as clear an indicator as any that the SME-exporters in other parts of the country are in for a tough time.
The report concludes that some of the Wenzhou businesses are on the verge of closing down. We may be at the threshold of another export manufacturing shakeout in China, very much like that which began in the Fall of 2007.
Stay tuned.
Bullet in the Head (1990) is one of the best films Hong Kong director John Woo ever made. It’s about how greed and corruption and more greed warp the relationship between three buddies from Hong Kong during the early days of the Vietnam War. A must-see film if you’re into the genre, as I am.
A bullet in the back of the head is also often the punishment for those who abuse their power in China so egregiously that their crime may incite a riot of protests by citizens or tear a substantial swatch from the leadership’s fabric of rule. Typically, the form of execution is reserved for national level officials, or high-profile leaders, like the Communist Party boss of Shanghai who skimmed from the city’s social welfare pot to personally invest in property. When the Party was cleaning Shanghai’s house because of the scandal six years ago, I recall local government officials as far out as central Anhui province unable to make decisions because they did not know how far into China’s interior the tremors would reverberate.
Most recently, Vice Mayors of Hangzhou and Suzhou – rich second-tier cities – had the misfortune of being caught out by authorities for corruption on infrastructure projects for which they were responsible five years ago. They met with the same misfortune as the Shanghai CPC boss. The punishments seemed unusual given how relatively low level the officials were in China’s leadership pecking order.
Paul French and I recorded a podcast a couple weeks ago for Ethical Corporation Magazine about the executions and what signals we thought the central government was sending out through such an irreversible punishment. In addition to being an analyst on China consumer market trends, an author of several books on China (and now, a published novelist), Paul is also China editor for the Magazine.
You can listen to the podcast here.
Wealthy Chinese wins against Standard Chartered in financial scandal http://t.co/QlTco5d2 - TIC!