This is China! blog

Paul French and Jonathon Fenby kept the evening light and contemplative during an animated debate on the history of China between World Wars I and II. French is author of Through the Looking Glass: China’s Foreign Journalists from Opium Wars to Mao; while Fenby has written ten books on China, including most recently a history of modern China and a biography of Chiang Kai Shek. They gossiped about Chiang Kai Shek and his inability to entertain interviews with foreign journalists longer than 15 minutes (he had hemmoroids) and whether Marshal Zhang Xueliang in 1936 kidnapped Chiang to unify the Chinese in the fight against the Japanese; or whether he did it so he could get Manchuria back, which the Japanese had captured when he was in Beijing having surgery.

French was of the mind that Chinese leadership of the fragmented territories of the nation at that time was nuanced than modern commentators give the so-called warlords. Some of them built schools, converted citizens to Christianity, even put in place social welfare systems. Though Fenby (and this author) disagreed the country was close to a federal form of government as one finds in the United States, both speakers agreed the greatest warlords were Chiang and Mao himself; the two absolutely hated what the other stood for, and would stop at nothing to destroy their mortal enemy. Even if it meant eternal conflict for their own country.

Related posts:

When Journalism Made a Difference

After the Love is Gone: The Life of Joseph Needham

Book Review: A China Hand’s Story: – Something to Crow About

I stammered like a 16-year old girl meeting her favorite rock star. Amitav Ghosh’s The Glass Palace is easily one of the greatest novels by a modern writer I’ve ever read. His latest work is The Sea of Poppies. Ghosh along with a score other writers was participating at the Literary Festival at Suzhou’s Bookworm. The line-up at the Suzhou Festival I’ve found to be more engaging than the one at the M on the Bund, in Shanghai, happening near concurrently. Ghosh spoke to an audience of nearly fifty, discussing his evolution as a writer, his experiences in Indian boarding school and at Oxford, and his creative approach to writing. One of the more interesting statements he made during the evening, in response to a question from the audience, was that he welcomed the shift of wealth and power back from West to East: the last two or three hundred years of history, he considered, were “not natural” in world history.

Afterward, when all the other’s had had their books signed and had left for home, with only one woman after me, I told Mr Ghosh how wonderful The Glass Palace was: I had even invited three friends who were unfamiliar with his work to attend the session with me. I told him I was having my first book published this year – China Inside Out (John Wiley & Sons) – and how reading The Glass Palace had urged me to continue writing and exploring other cultures. When he patiently asked me what my book was about, I forgot. Complete blank. I blushed, stuttered something incomprehensible, thanked him for his time, then scampered away.

Such is the power of gentle genius.

The Dragonbeat blog posted a contentious article about why a brand of mediocre tea is beating the beejeezus out of local producers in China, which introduced the world to the joys of tea; a case study, really, about other Chinese industries:

Both at home and abroad, Chinese tea brands struggle to compete with foreign competitors. In China, Unilever’s Lipton brand has a market-leading share three times that of its closest local rival.

I remember years ago going to government and company offices throughout China and being served up a crappy cup of Lipton green tea at nearly every meeting. I would always think to myself afterward, “I travel all the way to the Home of Tea for a lousy paper cup of Lipton? Pull-eeze!” Occassionally, I’d get some leaves pulled from a box of local stuff (popular in the Yangtze Delta: Longjing from the West Lake District; and Biluochun, especially from around Changshu and Suzhou fields). Offices in Fujian are always nice to visit, because the officials and businessmen often go through the abbreviated ritual of serving up a pot of local Wulong tea. Admittedly, some of the nicest gifts I’ve received from government and business representatives in China have been boxes of lovely tea. Never the really good stuff, though, like Da Hong Pao. They keep that for themselves.

The challenges facing China’s tea industry are the same as those facing a host of Chinese industries: product quality issues; excessive competition in the domestic market; low prices and meagre earnings abroad; and weak branding.

China was once at the axis of world trade with its monopoly on tea (cf. my review of the book, For All the Tea in China).  A combination of corporate espionage on the part of the East India Company and the revelation that Chinese growers had been poisoning British consumers for a couple hundred years in pursuit of profit ended the British taste for Chinese tea in the mid-1800s. The British proclivity for rationalizing production and creating and then adhering to quality standards was Britain’s own  Boston Tea Party, serving notice of the end of Chinese hegemony of the tea trade.

Monitoring quality across millions of scattered tea gardens is an impossible task, and Chinese tea exporters have consistently had trouble meeting foreign safety standards. Chinese tea sells for an average of just US$2 per kg on international markets, compared with US$2.70 for Indian tea or US$3.40 for highly regarded Sri Lankan leaves.

Interestingly, most of the comments on the post were from Chinese esthetes, who accuse the writer of missing the point: Chinese tea in all its perfection was never meant to be debased through such crass commercial activities as branding and mass marketing, they argue.

Tell that to your ancestors.

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.

I always enjoy attending book readings delivered by Paul French. Paul last year had published his excellent historical biography, “Carl Crow: A Tough Old China Hand.” This year his book on China, “Through the Looking Glass: China’s Foreign Journalists from Opium Wars to Mao,” looks just a detailed and engaging as his Crow Book. Earlier this week French visited us here in the boondocks of Suzhou from Shanghai (at least, that’s what folks who can’t work up the gumption to take the 35-minute bullet train ride out here from Shanghai believe) to regale us with stories of how journalists of yore had little intention of being the dispassionate observers today’s newswriters cum entertainers claim to be. Back then, journalists all had an ideological bent that their editors back in their home Western countries either amplified (as in the case of many of the reporters for the Times of London), or simply ignored (as did the editorial gestapo of Henry Luce’s publishing empire, state-side).

French made the point that at the turn of the 20th century China was a far more important story than it is today. At that time, the lives of individuals and even of entire cities were at stake as the colonial powers tried to balance the chaos of the times that could bring a wealth of opportunity against the kind of chaos that literally meant the death of entire societies at the time. “In 1937 alone,” French said, “there were more than 40 books published about China.” As well, French elaborated, ALL the major newspapers of the world had teams of reporters and stringers throughout China: the New York Times alone had eight reporters in China, while The Guardian and the Times of London – the voice of the British Empire – had large China bureaus as well.

The media at the time had a front seat to the axis around which world history was being spun at the time: the Opium Wars; the Taiping Rebellion; the Boxer Rebellion; the Russo-Japanese War; the fall of the Qing Dynasty; and the Asian theater of War from 1937 through 1945; not to forget the civil war between the Communists and the Nationalists that led to the establishment of the People’s Republic of China.

By searching through on-site as well as online newspaper archives and talks with countless journalists who have been covering the China story off and on for the past thirty years, French uncovers such gems as the true impact of the Times of London’s coverage of the Opium wars and the Boxer Rebellion; and of the blind spot American foreign policy had because of the infatuation Henry Luce had with the Kuomintang and – as did so many others, including Carl Crow – with Madam Chiang Kai Shek. French asserts that if the American administration before, during and after World War II had understood the true depth of corruption and malfeasance of the KMT’s stewardship of China at that time, they would have approached the civil war that broke out after the surrender of the Japanese in a wholly different way.

Perhaps the Americans wouldn’t have supported the KMT at all. Perhaps Harry Truman and not Richard Nixon would have been the first to open the door to direct relations with Mao.

Now that’s history in the re-making.

Read more about French’s book on Carl Crow’s life here.

Check out Paul’s blog China Rhyming, chock full of interesting bits about China now and China then.

One of the things that drew me to studying Chinese history and culture was the sheer scale of death and destruction that would every now and then convulse the country: great floods, great earthquakes, great revolutions, great wars, great leaps forward and great stumblings backward. Nassim Nicholas Taleb in his books “Fooled by Randomness” and “The Black Swan” would call these highly improbable events that have major consequences Black Swans.

Since I’ve finished reading the books, I’ve wondered what makes a Black Swan with Chinese characteristics – what I’d call a Black Dragon. What makes a revolution in China different from, say, a revolution in Europe? Or what makes an economic miracle in China different from one in Japan or South Korea (societies and individuals can have positive Black Swans as well)?

Of course, there are two kinds of Black Dragons in China: man-made and natural. It’s the natural Black Dragons that can kill thousands in a matter of seconds, like the earthquakes of Sichuan in 2008 and Tianjin in 1976. In such instances, man-made efforts more often than not magnify the consequences of the Black Dragons. In the case of Sichuan, substandard construction of school buildings apparently killed thousands of children, while bunker-style government administration buildings next door held up strongly.

The Great Blizzard of ’08 is another case in point: the heaviest snows in a century in Central China moved down south to Guangdong trapping hundreds of thousands of travelers in railway stations, on trains, and in airports during the busiest travel season in the world: Chinese Spring Festival. A lack of government planning and coordination and price-caps on coal exacerbated the effects of a snow that had devastating consequences for the credibility of the leadership.

SARS was likely the most memorable bite from an international Black Dragon China has had. The threat of disease (after all, the Chinese like to say, only a few score people died; that’s nothing compared to the numbers that die in really important Chinese events, Chinese offered) completely shut down Chinese business, commerce and society for two months. The Chinese governments’ cover-up and reluctance to share information about the outbreaks with its populace and with international agencies slowed the country’s return to normalcy and, again, the government’s credibility.

There are of course Black Dragons that are purely of a man-made nature: in recent Chinese economic history, the bursting of the real estate bubble that has left thousands of construction sites idle is a case in point. Over-building, over-lending and over-investment by institutions and families alike led to an over-valuation that is unsustainable in the medium-term. The gamble has paid off well for those dispossessed from their land who were given flats that eventually ballooned in value far above their original value. But families that have pooled funds to buy empty concrete husks as investments have seen the values of their speculations tumble, especially in Beijing, Shanghai and Shenzhen.

One could say that the troubles west of Sichuan are of a man-made, highly political nature. The protests, looting and deaths all came at a time when China was trying to get its makeup right for its debut as Olympics host. The dairy scandal that came on the heels of the Olympics was a completely man-made Black Dragon: take an unregulated industry, mix in greed and corruption in business and government, add a pinch of melamine, leave in a political pressure cooker for several months and – voila! – the publicized deaths and injuries of infants that wiped away any credibility China had as an up-and-coming world power that took its caretaker role seriously.

Several Chinese cultural traits combine to create Black Dragons – Black Swans with Chinese characteristics: the Chinese penchant for reducing costs by cutting corners; the overwhelming quest for Face; the lack of transparency with which Chinese work in business and in government; a penchant for risk taking that would make even the most X-treme sportsman break out in sweat; collusion through guanxi; and an addiction to urgency.

Cutting Corners
From the time the avatar Marco Polo returned to Europe to tell of the riches of China nearly every Western businessman has considered the metaphor that to add an inch to the sleeve of every Chinese would make any businessman rich indeed. The Chinese operate on the flip-side of the aphorism: instead of adding an inch to every sleeve, wouldn’t it be glorious to subtract an inch, instead? Imagine all the savings one can pocket with such sales! the average Chinese businessman imagines. I realized this way of thinking after having a suit made by a Suzhou tailor to whom I had given the original to copy. Though I’d tried the suit on in the shop before leaving, I hadn’t thought to shove my hands in the trouser pockets to test their depth. It was when I wore the suit to a meeting for the first time I realized I didn’t have room enough in the abbreviated pockets for the customary keys and mobile phone and change and used kleenex, etc. The tailor had likely saved about 5 RMB in shorting my pockets (and the crotch, I might add), which doesn’t seem very much until one adds up all the suits he’s made that he’s short-sheeted. He is likely able to squeeze several more suits and pockets out of all that scrimping.

Chinese companies as China comes of age operate very much the same way. Unfortunately, they may scrimp on the really important stuff: like proper foundations and reinforcements and supports for the buildings that are supposed to house and protect residents and other end-users. Or they may short bridges … or super-dams.

Face It
Unfortunately, the overwhelming need for the individual Chinese to save Face only exacerbates the effects of Black Dragons like earthquakes and floods and food contaminations, and all but eliminates any impetus toward improving the system that spawned the improbably destructive event. As long as no one admits culpability and/or accepts responsibility for the unintended consequences of Black Dragons, cycles of destruction will continue to plague Chinese society for centuries more to come. Note there has been no visible, national-level drive to check the quality of workmanship of other schools in earthquake zones.

Under the Rocks
The Chinese have a saying: “If the water is too clean there can be few fish.” In other words, how can anyone in Chinese society possibly profit in the glare of a truly transparent system? The Chinese proclivity toward opaqueness in government and business dealings is also another major contributor to the creation and re-birth of Black Dragos. Without the checks and balances that allow regulatory and commercial transactions to be seen and reviewed and commented on, stakeholders cannot readily trust the institutions that are meant to support and champion their interests. Hence, mistrust is rife in today’s China, especially amongst the Red Guard generation that had pilfered China’s past without remorse. Black Dragons – like so many of the creatures that thrive in dark, damp places – love the opaque. The frequency – and perhaps even the devastating effects – of Black Dragons could be severely curtailed if only stakeholders could see them in the making. However, Chinese have a deep aversion to exposing the roots and ruts of their creative deal-making and power broking, no matter how petty the transaction. They seem after thousands of years of such gerrymandering not to have understood that Black Dragons breed in the shadows.

Risky Business
Anyone who’s visited a Chinese city for more than a day has seen the family of four on a single electric motorbike zipping down the side of a busy street, dodging oncoming bicycles and other electric motorbikes (that are careening down the wrong side of the street), speeding up to make the light at the chaotic intersection just AFTER the light has turned red. For those of us Westerners that live and work in China not a day goes by when we step out the door to see some of the most death-defying feats of derry-do any human being might subject his self or his fellow man to.

In some cases, one does not even have to step out one’s door. Just two days before writing this article I watched out the window of my eighth-floor apartment as a middle-aged Chinese woman was on the OUTSIDE of her eighth-floor window without a spotter, without a tether, and without a big-ass inflatable cushion on the hard asphalt sidewalk below to catch her should she … oops .. slip and splatter. Never mind, the window was dirty (on the outside) and she was the one at that moment to clean it.

Now, aggregate all the incautious activities of millions of individuals each day for days, weeks, years and eventually, in Mandelbrotian manner, you’re going to have one hell of a catastrophic fractal tearing through the fabric of your society.

For instance, let’s add up all the small risks of the individual dairy farmers with their handful of leveraged cows in feeding the cows whatever was digestible (to cows); the managers of the central milk stations into which the dairy farmers would pour their ablutions would daily add just a bit of melamine to boost the protein readings of the watery soup; the corporate managers who figured on a daily basis that small amounts of pollutants and melamine could never harm let alone melt down their company; the local government officials who took the risk of accepting bribes to allow the adulterated product to pass inspection and find its way into cartons of milk, vacuum packets of yogurt, and trays of cookies bound for Japan and chocolates molded for European palates. In the end, all these small, acceptable micro-risks crystallized into a super-structure of improbability that no single company, local government or national institution could moderate. The Chinese created a mother of Black Dragon.

Addiction to Urgency
It only takes a day for the average tourist in any city in China to see that Chinese ARE NOT patient people. They will push and shove their way to the head of any assemblage that begins to hint at a line; they will honk their cars through any yellow-to-red intersection; they will dive into a business with nary a thought to planning, funding or close-out. The up-side of such behaviour is that Chinese people get things done: witness the creation of what I’d guess would be at least a score new cities in China in the last three years, while the USA is still trying to figure out how to put the uniquely humpty-dumpty New Orleans back together again. The down-side of CHinese urgency addiction is that they tend to do a lot of things half-assed. A Westerner who has lived in China for years and who owns a home here advised me, “If you think you’ll ever be able to buy a home you can live in for twenty or more years and raise a family in China, think again. The average residence in China is built to last five years – seven years tops.” Just how Built to Last is the Three Gorges Damn?

Collusion
The citizens of every society must collude to some extent in order for the society to have some semblance of cohesion. The American television show The Wire delves deeply into the strata of a society and the degree to which black and white (morally speaking) mix to create a plenitude of grays. China’s collusions begin and end with its citizens’ distrust of its own institutions. Chinese are born into and cultivate guanxi nets – networks of reciprocal obligation – that begin with family, extend to classmates and coworkers, and perhaps even to people from the same hometown. The cliques are tight, mobile and highly adaptable. Guanxi has saved millions of lives throughout China’s history when her institutions have failed her. The transactions within the guanxi networks tend to run counter to the interests of the State, creating cross-currents and rip-tides of intersts that ultimately undermine society itself. Witness last year’s dairy scandal. Enough said.

Black Dragons are very difficult to predict; after all, they are amongst the most improbable of events. And yet, such events have etched as much of the character of Chinese culture and society as any extended period of peace and harmony.

And with China potentially spawning more Black Dragons at an increasing frequency as the complexities of its moderninzing society mount, how can Western companies predict – or at least prepare for – the inevitably improbable?

Read the first in the Black Dragon series: The Black Swans of China

Read the next installment in the Black Dragon Series: Managing for Black Dragons

It was June 2008 when a group of us lads were taking in pints of beer on the patio of Blue Marlin 3, in the Suzhou Industrial Park, our watering hole, as it were. We discussed China’s recent flare-up of troubles west of Sichuan, and how the Chinese government was intent on keeping the lid on anything that might deflect from the wholesome image it was trying to project through the politicized prism of the 2008 Olympics. I happened to comment, “God only knows what’s going to pop up after the Olympics is finished. The Central Government must be sitting on a lot of stuff it doesn’t want the world to know about.” Already, there had been reports of petitioners to Beijing turned away from the city. They had come with grievances brought from their hometowns, usually about corrupt officials and unfair land grabs. The Sichuan earthquake had revealed construction of private and school properties that was substandard. “What ever does come up,” I said sagely, “it’s going to be ugly.” The guys silently nodded assent, took another sip from their beers.

Three months later China single-handedly destroyed its flagship dairy industry and any credibility and goodwill it had built up during the Olympics. It turned out that since Spring of that year that milk tainted with a derivative of plastic had been poisoning infants throughout the country. City, provincial and national level officials had already known about the devastating revelation for months before, but had been directed to keep the news under wraps until after the all-precious Olympics had run its course. I’ve been drinking imported milk ever since.

I recently finished reading Nassim Nicholas Taleb’s books “Fooled by Randomness” and “The Black Swan”. Taleb is Dean’s Professor in the Sciences of Uncertainty, and holds a PhD in Statistics and one in Philosophy. He’s also been a professional stockmarket trader for more than twenty years. Essentially, both books discuss the role of randomness in our perceptions of the way the world works as we would like, and as it seems to more deliberately operate. Randomness has a greater influence on stock markets, gambling, academic studies, the social sciences and success itself than we are willing to admit – or that we are able to perceive. And the more we try to fit our own experiences and perceptions and the way society functions into what Taleb calls more convenient, digestable narratives, the more we expose ourselves to Black Swans. He presupposes that our post-modern society is and will continue to see more Black Swans as we continue to add complexity into our lives.

For hundreds of years in Europe scientists professed that all swans were by definition white.  When colonists and naturalists stepped onto the shores of Australia, lo and behold, they discovered swans that were in every way the same kind of swans as those found in Europe except that in Australia there was also a variety was black. The discovery serves as a call to the scientific establishment to consider how it conducts science and declares the truth. The Black Swan, then, in Taleb’s thinking, is the highly improbable event that individuals and societies are not prepared to meet when it does occur. The current global economic meltdown of the financial system is just such a Black Swan: bankers and financiers believed it highly unlikely that, despite the great cross-border inter-dependencies that had developed between financial institutions, that the entire system would grind to a withering halt. Governments, banks, politicians and business “leaders” were entirely unprepared for the occurrence of just such a Black Swan.

China, interestingly, was ahead of the rest of the world in experiencing its Black Swan. Actually, what China had suffered was a Perfect Storm in the first half of 2008, even before its Olympics; and before the rest of the world fell off the edge financially. The period was more like a flock of Black Swans furiously beating their wings.

Whatever one might want to call the convergence of unfortunate consequences, the first half of 2008 saw the greatest snow blizzard the country had seen in 50 years – in some parts of China, for nearly 100 years; commodity prices skyrocketing to the extent that even rice seemed to become a precious commodity for a few weeks; factory closures that occurred under cover of cold Spring Festival nights; the violent protests in the Western parts of the hegemony; the Sichuan earthquake.

Other Black Swans that have given Chinese leadership pause in recent decades include: the student unrest and subsequent crackdown of 1989; the Asian financial crisis of 1997 and the SARS outbreak in 2003. One could say that Chinese history from 1842 (the First Opium War) until 1949 was one damned Black Swan after another. Things didn’t settle out much after that, with various self-inflicted events that had catastrophic consequences for the country and its citizens.

A Chinese friend postulated that because China had suffered so many misfortunes last year, that this year it was able to ride out the global economic downturn better than Western countries. In some ways, she’s right: it is unmistakable that its stimulus package has given a much-needed shot in the arm to its infrastructure projects, and that consumption in China continues to rise, albeit not as aggressively as exporters around the world would like to have it. Global economic antecedents such as factory closures in the south and north of China; rising unemployment among migrant workers and recent university grads; and increasing numbers of protests based in the rising inequality of income levels in China proved canaries in the coal mine. The Chinese government could feel the sea change and met the challenge domestically before Western countries knew what fate had befallen their own credit-bloated systems.

Though China’s is half the GDP growth rate of just a couple years ago, the current six percent mark is not bad by Western standards, especially considering that most economies in the OECD are contracting. On the ground here in China recent visits to Chengdu, Chongqing, Nanjing, Hefei and Shanghai have shown consumers out buying: women are still spending on keeping up with the latest (ugly) fashions; new model bicycles appear daily on the streets of my hometown Suzhou; and tourist destinations in China are chock-a-block with stiff-capped Chinese tourists following, blinking, behind an exhausted tour guide sporting a tattered yellow flag. China’s economy has certainly slowed down, but Chinese have adjusted in ways deeply ingrained in them from having already met the challenges of thousands of years of Black Swans.

Read the whole series:

Next week: Thar Be Black Dragons in China

Next Installment in the Black Dragon Series: Managing for Black Dragons

You ever try to read a book and you find you just can’t get into it? I just did. Twice. Still can’t get into it. Set it aside a couple months after reaching the half-way mark; figure I’d have another try at it again. Forced to lay on my back for several days in submission to a flu, what better opportunity could a book have to exploit an unsuspecting human being? Still, no success. I’ve closed the book up again, put it back on the shelf.

Managing the Dragon: How I am Building a One Billion Dollar Company in China is about as self-aggrandizing an autobiography as they come. But then again, as one friend told me when I told him how bored I was with the book, “Bill: the title does say ‘How I am building …” In other words, my friend was saying you CAN judge a book by its cover. Managing the Dragon is the autobiography of Jack Perkowski, CEO of Beijing-based ASIMCO, a holding company with a plethora of auto parts manufacturing facilities throughout China. Unfortunately, the autobiography is not finished yet, as Perkowski is still well and alive and lecturing on the back of the book. That means there’ll likely be a sequel, which I will also probably be unable to finish reading for the tears of boredom leaking from my eyes. (“My life is a stack of books, unfinished in the reading. – ME “).

The book starts with his childhood as a working class kid in Jersey (New, that is); who gets into Yale; Harvard Business School; works on Wall Street, makes loads of cash; convinces financiers in the early 90′s through vision and grit that China is THE NEXT BIG THING; gets nearly a billion dollars to finance a start-up in China; loses nearly a billion dollars financing a start up in China; and learns stuff along the way to become a better magnate. End of story … i have to guess, because I can’t seem to finish the book.

Tom Clissold’s side of the ASIMCO story is a far better written, much more entertaining and far more illuminating about the trials and tribulations of the early years of ASIMCO and of the “joys” of joint ventures in China. Clissold’s autobiography Mr China is self-effacing and simply a good read. Managing the Dragon reads like a cross between an over-achieving cv and an American football playbook with Harvard MBA-type buzzwords thrown in to add credibility to what would otherwise would have just been a playbook (if Perkowski’s ghost writer had used the word “bench” as a verb one more time I thought I was going to puke).

Now, just to prove to myself that I haven’t become jaded reading these books by “China Hands,” I decided to pick up the copy of 400 Million Customers I had bought from Sinomedia (publishers of The China Economic Review) just a month before Spring Festival 2009. Carl Crow wrote the book some seventy years ago. Crow made pots of money through the advertising company he owned and operated out of Shanghai for nearly twenty years. In my eyes his claim to fame was the popularization through his collectible posters of the qi pao, that lovely and elegant work of fashion that makes most any Chinese woman look like a million bucks when she dons one. Crow lived and traveled throughout China from 1911 to 1937, when a Japanese bomb dropped from the sky and exploded on the street in front of his home.

400 Million Customers is absolutely brilliant! The book, too, is written in the first person, and is packed from the first page with his experience and the experience of his customers in China with the buying and selling habits of the Chinese when China first opened up to the world, just before World War II. From the first page I was chuckling at the anecdotes, nodding in affirmation at the some of the characterizations with which I’ve had experience in China, and genuinely enlightened about the motivations behind other notions the Chinese have. I will devote a full review to 400 Million Customers when I’ve finished reading it, which should be any day, now, as its tough to put down. Ah, they don’t write them like they used to.

Wished they did, though.

But then again, I just may one day be able to finish reading Managing the Dragon. Who knows, perhaps if I have a bad case of la duzi and am once again captive …

The European Union Chamber of Commerce in Shanghai recently hosted an insightful talk with the author of The China Price, Alexandra Harney. The American writer spent nearly two years in Guangdong amongst factory workers and their bosses understanding the work and economic environment. Penguin press published the book last year, just after the Perfect Storm of the Blizzard of 2008, price deflation, buyer exhaustion, salary and commodities inflation struck China.

Her presentation, “Factories in crisis: The Future of Chinese Manufacturing”, was an update of the material she wrote about, with observations on how the factories of the Pearl River Delta contributed to the global economic downturn, the affects of the downturn on the factories, and China’s future after the the world has moved through the financial crisis.

Some insights she shared that actually made me take pen to paper so as to not forget them included:

Currently, no one trusts anyone any longer in the international supply chain: “no one is honest about their true condition,” she said. Buyers are more frequently performing due diligence on suppliers; and suppliers are more often requesting credit checks on buyers.

The “Cluster Effect” of suppliers grouping together in cities throughout China (for instance, Dongguan used to produce 70% of the furniture manufactured in China) has become a “Domino Effect,” with great swathes of industrial parks and avenues idle now.

She sees a major shift in the Pearl River Delta from factories owned and operated by Taiwanese and Hong Kong businesses to Mainland ownership.

Workers in the last two years have become very conscious of the employee rights. “In general,” Ms. Harney said, “workers feel optimistic about the future, despite the downturn.” Ms. Harney saw no worker revolt on the horizon.

However, one of the greatest challenges Chinese leadership faces is the huge swell of semi-skilled factory workers who will still need to work for the next 20 years. Many of the factory jobs they used to have will simply not be coming back.

Ms. Harney believed that the West’s emphasis on currency exchange rates in China was misplaced. “Factories are not dying because of the exchange rate, but because of the lack of demand.”

One of the greatest differences she sees between Western management systems in China and Chinese (and especially Taiwanese and Hong Kongese) is that “Western companies treat labor as assets rather than as liabilities.” This is especially important for a workforce that is increasingly changing its value system: “Experience, skills development in a company that is striving forward is more important to today’s workers [than to their forebears. Now, they don’t just want to get a salary and then return to their hometown after a few years.”

And despite the race to establish export manufacturing bases in Vietnam in particular, Vietnamese workers tend to be rather militant, and less disciplined than Chinese workers, while Vietnam has a population the size of Jiangsu Province. “The alternative to China will be China for many years to come.”