Wednesday, March 14, 2007
Breaking Bread Together, Shanghai Style
--- Ali Semon
Monday, March 12, 2007
Reflections on an amazing journey
The trip was amazing, mind-blowing, astonishing (I’ve run out of suitable superlatives) because of what we saw, what we learned, who we met and traveled with.
I had never seen any country--or city or state--with such over-the-top and largely unregulated capitalism, with all of the optimism, entrepreneurial spirit, instant millionaires, instant billionaires, social inequities, innovation, dislocation, better jobs, lost jobs, spendable money, higher costs and excitement that it brings. Oh wait, this is supposed to be a communist country. Go figure. Forget what you learned in school: capitalism and dictatorship can coexist.
I truly understand globalization and the global economy now for the first time. I never knew there was enough capital in the entire world to build a super-modern country of this size from the ground up. That capital is largely coming from the rest of the world, including the U.S., where the buyers of Chinese exports live. The Chinese are financing the U.S. government debt by buying our T-bills, and we are providing the capital for their expansion.
The U.S. could easily end up a second-rate economy if we don’t adapt to the times and the competition. I don’t know all of the ways we need to change, but one thing was obvious: the Chinese are expecting more from their children in school, have a much longer and rigorous school day, and are turning out a huge and growing number of well trained graduates in technical fields. It seems obvious that the future will be the hands of today’s children, but I’m not sure we have the political will to revise our education system.
Does it matter if we end up a second-tier economic power? Take a close look at England or France and decide for yourself.
One tragic part of China’s boom is that it’s come at a huge cost to the natural environment. Air and water pollution is at epic proportions. Interestingly, though, it appears that the Chinese have realized some of their environmental errors, and are trying to fix some of the more obvious problems before the 2008 summer Olympics. They have the technology to grow cleanly if they want to.
The Chinese people we met are embracing the rapid changes and excited about the future. They’re very proud to show off their cities; the 2008 Olympics is coming at the perfect time and will be their “coming out party.” No one who watches the Olympics on TV will be able to ignore China anymore.
What does all this mean to the San Luis Obispo business community? It’s probably too soon to be sure. But it’s obvious that all of the industries that we’re counting on for our economic future--education, government, communications, finance, high technology, tourism, agriculture—will all be greatly impacted by this strong new competitor, partner or customer.
But don’t think Americans will just sit idly by and let China eat our lunch. I was so encouraged that 205 business leaders from just our little city wanted to learn in-person more about this challenge. (In total, more than 20,000 Chamber of Commerce members from throughout California will visit China just this year and just through this tour company.) The members of our group were filled with the same curiosity, energy, enthusiasm, and spirit as our Chinese hosts. They’re not afraid of the big wave coming; in fact, they want to ride it!
--Dave Garth
Saturday, March 10, 2007
Goodbye to Shanghai's bargain shopping
Today we walked along the Bund, which is the financial district by the river for Shanghai, known as the "Wall Street of the East." It's very stately, and the walkway by the river offers spectacular views from a spotless vantage point. In fact, all of China, though the air and water may be substandard, has hardly any trash visible... on the streets or the highways. You just don't see litter.
The shopping here is phenomenal, whether high-end or via the hordes of street vendors. You really can buy a phony Rolex for $1 if you're a good bargainer, because bargaining is the name of the game, in stores or on the street. One of our group members today bought an I-pod -- with all the attachments and instructions, still in the box -- for $10. None of us think it's real, but it works. The sheer volume of inventory available is overwhelming, and you wonder how you can buy a new "Beijing 2008 Olympics" baseball cap for 75 cents.
It's time to hit the sack before we lift off tomorrow for home, sweet home. Though it's been an eye-opening and fabulously interesting trip (far more than anyone expected, I think), we are ready to leave the "togetherness" of sharing a city with 20 million people... and get back to the SLO Life. California, here we come, tired and happy.
Bob Wacker
Friday, March 9, 2007
It's all in the details
--- Ali Semon
Shanghai is a modern city
With so much of the growth coming in the last 10 years, Shanghai is a very modern city, almost futuristic in its look as you travel on a labyrinth of freeways 4 decks high and look eye-to-eye with the 10th story of some apartment building. It was as if we were in a science fiction car-of-the-future commercial flying through some blend of Times Square and the Emerald City. Speaking of apartment (and other) buildings, Shanghai has over 2,000 buildings that are at least 20 stories tall, and the architecture and lighting of many of the skyscrapers is beautiful and dramatic... and it goes on forever. We can't wait to get out in it tomorrow.
We spent most of today in Hangzhou, where we visited the Ling-Yin Temple, site of the largest Great Buddha sculpture in the world, with its beautiful and peaceful gardens plus 500 statues of secondary Buddhas (there's rankings, just like the military) and more than 300 other Buddhas carved out of the rock formations in the garden. The second biggest statue is of the Laughing Buddha, the jolly chubby guy that many people identify as Buddha, but who's really only a secondary Buddha. The Temple and gardens were teeming with Chinese tourists, which makes us all wonder on a crisp March day what the crowds will be like when millions more visit China next summer around the Olympics.
Around Hangzhou and on the 3 hour trip to Shanghai, we noted that the traffic lights and signage were equal to -- or better than -- what we have at home. The signage is all in Chinese’s characters and in English on a green background (we could be in California), and many have electronic lighting as well. Many traffic lights have the same second-countdown electronic lights that we have at downtown SLO intersections for pedestrians, but they are larger and for the cars, which we all agreed is a good idea. The "Walk" signs for pedestrians have an animated pedestrian moving his legs just in case you don't quite get the message. That's one advantage of growing so large so recently -- they get to start with state-of-the-art equipment.
Our guide has explained to us how most phrases have multiple meanings depending on the inflection you put on it. The same phrase can mean "Hello" or "How are you?" or "Are you okay?" or "Great to see you" depending on how you say it. We don't quite understand how that works with the written word (or character), but it works for them.
Except for the Chinese characters on signs, billboards, and buildings, and the inescapable observation that everyone is Chinese, what you see in much of China could be anywhere in the West. They dress like we do, they interact like we do, and their surroundings could be matched somewhere in the US. It's not the Communist China that I imagined based on prior experiences in Communist countries -- they're not despondent, they're not somber. China is very, very full of vitality.
Bob Wacker (& Dave Garth)
Thursday, March 8, 2007
Suzhou: A study in contrasts
Today in Suzhou was a day of contrast--the very old and the very new, the very clean and the very dirty, the very traditional and the very transitional.
In the morning we visited Tiger Hill and its beautiful 1,000 year old Buddhist pagoda, one of the few visible remnants of a very rich religious history; most Chinese do not practice any religion today.
Just a few miles away, we boarded a traditional flat bottom tour boat to see the old part of the city from the moat and canal that flow all the way to the ocean some 10 hours away (by boat.) The narrow canal provided a fascinating and intimate look at life in a lower class neighborhood with small and very old residential buildings right on the canal edge and an open air market looking like a typical third-world gathering place—dark and dirty stalls selling everything from live eel to monkey-on-a-stick. But a look just above the stalls and one can see the very new and modern skyscrapers in the background less than a mile away. The houses on the canal were much like the private residence where we were invited to dinner earlier in the week.
The residents served a nice dinner to 20 of us in a dingy, tiny home of less than 600 square feet. The kitchen was about 6 x 10 feet, so small that food was stored inside the tiny washing machine.
We then drove almost three hours in light traffic North to Hangzou--without ever leaving the Shanghai metro area. That’s right: we drove through more than 100 miles of city without any significant open space in sight. Hangzou, essentially a Shanghai suberb, has itself 7 million residents. That’s more than New York City.
It takes time to adjust to this huge mass of humanity. It will take longer to come to grips with how this huge and skilled workforce and huge potential consumer base will impact the U.S. and San Luis Obispo.
Dave Garth
Mastering chopsticks
I was just beginning to feel confident with the squatting toilet routine and felt that I could take on the world, or at least the bathrooms of the Eastern world. But that’s when I had a setback. My hotel key fell out of my secure pant pocket and into the porcelain abyss of Never Never Land.
I stood for a moment brainstorming what to do. Should I cross my fingers, close my eyes, count to the lucky number eight and hope that I could somehow force the key down the pipes with a solid flush? Or do I dare figure out a way to draw it out? I mean, really, how necessary was this key?
Luckily, a kind bathroom attendant came to my rescue. Using her super-sized chopsticks, she deftly clasped the key between the wooden sticks and immediately flung it across the room and began rinsing it in the sink. Water spraying, soap bubbling, dryer blasting. The whole process was done with her chopsticks. I was overwhelmed with not only her thoroughness in cleaning a disposable hotel room key but her willingness to help this fumbling American. I expressed my gratitude with a ‘shi shi’ and couldn’t help but wonder if she had been in this predicament before. It all seemed too easy for her. I tried to learn from her and file away the lesson that a smile and kind actions go a long way, and that mastering chopsticks can get you somewhere as well.
--- Ali Semon
Suzhou people are genuinely nice
Today was a great day in Suzhou, a city an hour away from Shanghai. We saw some beautiful gardens at the Lingering Gardens (we were too rushed to linger) and China'a answer to the Tower at Piza, the Tiger Gardens Pagoda, which is about the same height and which also visibly tilts. We also went through some fascinating tours of how they make silk and some enchantingly beautiful Chinese Embroidery -- true works of art (one of which will soon be displayed in my conference room).
But the highlight of the day was a boat ride along the primary and tributary canals of Suzhou. Like Venice and Amsterdam, Suzhou has a network of canals running through the city. We disembarked in a poor part of town that housed a multi-block marketplace in streets and alleys not more than 12 feet wide. There were countless stalls, carts, and little stores selling fruit, meats, shoes, household goods... everything. A man with a portable microphone was in an intersection the size of a big living room demonstrating and selling steam irons. This was no tourist place -- no hawkers selling souvenirs, just locals selling to other locals. There were countless prepared foods for sale, only about half of which we could identify. One place the size of a typical American bedroom (not even a master) had 4 little tables inside and a steam table out front holding 10 pans of different hot foods. It was like Panda Mini-Express -- they even had something that resembles Orange Chicken. My son would feel at home here.
It is actually striking how nice everyone is to us. They all smile back when we smile, they wave for our movie camera, they laugh with us when we each make hand signs to communicate. They get their cute-as-a-button bundled-up toddlers to wave for the cameras... and they're not looking for a tip. No one scowls at us, no one seems to resent our traipsing through their local market. They are almost universally deferential. Hearing fairly constantly that Americans are unpopular internationally, I am a bit surprised at this generous welcoming... but it is genuine, and it makes me even more hopeful about our ability to work together in the world... for business, and for peace.
Bob Wacker
Wednesday, March 7, 2007
But Can He Dunk?
We talked politics (he asked whether I was a Republican or Democrat, did I like Bush, what did I think of the war in Iraq), Chinese life, and then he asked if I was a Lakers fan. I told him that I was a Phoenix Suns fan, having went to high school and college in Arizona. He said "Aah, Steve Nash, very good player", then went on to name the starting lineup (which I would have been hard-pressed to do). Surprised, I asked if he played (he does) and if he liked Houston since that is Yao Ming's team. He said "Oh, no, Detroit!" and then named the Pistons starting lineup as well. I told him about my children, who are both in San Diego (he knew where it was), and he gave me a business card so I could e-mail him, and then he offered to show my kids around Beijing should they come to visit. Polite, smart, and a hoops fan -- visit him, heck, I want my daughter to marry him!
Speaking of language, we are now in Shanghai, where they speak the Chinese dialect, different than the Mandarin spoken in Beijing. It's almost a different language even though they are written the same. The 4 words I had learned are now virtually useless... or like a Yankee in Dixie, they brand me as a Northerner.
Shanghai may be the world's largest city with 17 million residents, and an hour away are Suzhou (where we are now) with its 6 million people, and Hanzhou with its 4 million people. Flying in to and driving through Shanghai, there are miles and miles of cookie-cutter high-rise apartments -- over 3,000 high rise apartment buildings in all. While we were surprised at the pretty decent air quality in Beijing, the air here is absolutely appalling -- it's the visibility equivalent of a summer morning in Los Osos, but that ain't fog out there.
Suzhou is the silk center of the world -- over 10 million Chinese farmers produce over half of the world's silk. It takes about 100 cocoons to make a shirt. The pupa not only weave the cocoon, but they are also used for cosmetics (there's a huge Maybelline factory here, so remember that when you apply that blush)and as a source of protein (hold it, what was that dish again??). Actually, there is a lot of mystery, blind faith, and guessing going on at mealtime, but the food has generally been terrific.. and we're probably better off not knowing.
On to the next adventure!
Bob Wacker
Flying over Shanghai: Miles and miles of high rises
As we flew low over Shanghai on our approach, I was struck by the miles and miles of high rise building. There are a few commercial structures that stand out architecturally, but there are thousands more identical and non-descript residential apartment buildings about 12 stories tall that look like they came out of the same cookie cutter.
Shanghai was the region first opened up to the world. It has the highest per capita income, the highest job growth, and the most desirable private sector jobs. It also has some of the worst environmental pollution on Planet Earth. The most obvious is the sickening orange-brown air pollution that cuts visibility to less than a mile and sucks the color from everything. This depressing gray-only scene looks right out of a movie about a nuclear winter. I can’t imagine what psychological and physical effects seeing and breathing this stuff would have on the residents here.
We then traveled by bus to Suzhou, a high-tech manufacturing center about 60 miles from the airport but still within the metro area. This area has huge amounts of foreign investment, some of the most sophisticated electronics manufacturing in the world, and a very skilled and well educated work force. In all of China, even elementary school children take eight different subjects a day and attend school from 8 a.m. to 6 p.m. Will our American kids be ready to compete in this global economy? We’ll find out more tomorrow.
-By Dave Garth
Submitted 7 a.m. PST
Tuesday, March 6, 2007
Another huge day
Tuesday found us at the Forbidden City, Tian An Men Square (the largest square in the world), the Emperor's Summer Palace (where it was anything but "summery"), a bike-shaw (sounds right for a rickshaw bicycle, don't you think?) trip through some neighborhoods, an unbelievable dinner at someone's home, and a meeting in the evening with business leaders from Beijing.
Although there's lots of traffic in Beijing, there's very few horns sounding, even when it seems you have countless close calls. You drive on the right here, just like home, and there are well-marked lanes, but drivers are fluidly aggressive in their approach to lane-changing. They weave in and out, never signaling, and merging is a courteous free-for-all -- including bicycles who seem to have the same disregard for their own safety that student pedestrians display in SLO. If there were ever a place where you'd expect road rage, this is it, but there seems to be none. As close as everyone gets to one another (you'd SWEAR that your bus HAD to clip that other bus that just went by), we've only seen one fender-bender. The drivers were negotiating the damage payment at the accident site, and apparently it's expected that an agreement will be made and payment concluded right then and there. Not a good job environment for insurance adjusters...
Most apartments have central heat, but air conditioners are usually wall units sticking out underneath the window like an afterthought. Some apartments cover their windows with bars to protect against cat burglars -- even on the upper floors. Our tour guide calls them Spidermen burglars.
We went by the under-construction Olympic Stadium, a huge structure of swirling steel, looking much like a giant steel bird's nest. There's another soccer stadium under construction about a half-mile away, and the Olympic Village is another few blocks away. Everywhere, people are renovating the historic sites for next August's "coming-out party" for China. They have enough people to do the work. Consider, for example, that last year the US had a great year for employment, creating 2 million new jobs. China needs to create 2 million new jobs per month! We just wonder whether they'll have enough toilets -- the women now have to wait to use the restroom at the historic sites -- and this in 20 degree weather. Plus, it will be an adjustment to adapt to the Eastern toilet -- if you don't know what that is, suffice it to say there's no equipment reaching above floor level, and you understand why they have great thigh muscles.
Until tomorrow...
Bob Wacker
Partnership or competition?
The overwhelming response was due, I think, to the tremendous amount of curiosity about China's economic miracle.
China was a backward third-world country just 30 years ago. Now it's an economic powerhouse that in 2006 contributed more than one-third of the entire world's economic growth. China has been called both the largest threat to the U.S. economy and the largest business opportunity, sometimes by the same pundits.
As much as we used to think San Luis Obispo is isolated from the world economy, most local business people now realize that we are integrated into the global economy and directly impacted by worldwide economic trends.
So we're here to find out what we might need to survive in a future competition--or partnership--with China.
Earlier tonight in our headquarters hotel we held a successful Sino-American business conference that connected our business leaders with more than 50 Beijing business leaders. Everyone was there to find either a new customer or supplier in the other country. Only time will tell if these contacts prove fruitful, but most everybody seemed pleased with the information exchanged. Throughout our somewhat tiring 14 hour today we also toured cultural landmarks, traditional craft factories, and an historic residential neighborhood. The stark contradictions continue to amaze me. The candor of our guides seems out of place in a controlled society; today our guide even pointed out where the student democracy rally in Tianmen Square occurred just 18 years ago and the exact spot the student almost held back the tank.
The party congress was meeting in the square today so security was very evident. Yet, everywhere else in the city the army and police are no more visible that they are in a major U.S. city and do not brandish weapons. This isn't what I expected a "police state" to look like.
-- Dave Garth
Monday, March 5, 2007
A city of 15 million people
There were lessons in differentiating between the qualities of jade and jadeite followed by lunch and shopping. In the market, I eagerly gathered a collection of paper cutouts of Chinese landscapes, flowers and figures….watercolors of blossoming trees and the unofficial national flower, peony. Frame designs for these pieces are already running through my head. Snow melts from the top of our bus and turns to icicles running down the windows as we continue our travel. Looking out, we see everything from sitting camels to neon signs.
The Great Wall. Wow. I don’t know what else to say. I feel lazy. Ten years to build, 70,000 men, 2,200-plus years old. Snow dusted the terraced hills and many of the irregular steps. My hands clung tightly to the heating pads I brought as I climbed from tower to tower. Still. It’s just the sound of the wind whipping across my face and the breathing of determined hikers.
Buffet dinner and an acrobatic show. Dragons, cartwheels and flips, plates spinning on poles. I think some of the performers had to be under the age of 15. They moved like Gumby dolls dressed in sequins.
My $2 lime green Gucci watch from the Temple of Heaven is still ticking. It tells me that it’s just about time for the in- room back and foot massage before bed. I think everyone from my bus, as well as the other four, booked one. I try and figure out the logistics of gathering 100 masseuses for a one-hour time period on a Monday night, and then I remember we are in a city of 15 million people. I am sure the hotel can find a hundred or so…
-- Ali Semon
A strange brand of communism
Today was a very full day of looking, listening and talking with our guides. The weather is very cold and windy—in the 30s throughout the day with 15 to 20 mph winds. Despite Beijing's reputation for some of the worst air pollution in the world, the air quality and visibility was good, probably helped by the strong winds and snows earlier in the week.
My first impressions: In contrast to China being a communist country, I've never seen more exuberant, over-the-top capitalism, with many of the attendant benefits and most of the inevitable excesses. Flashy, Western-style advertising is everywhere—billboards, benches, TV and posters. Street vendors sell lots of low-quality goods really cheap, including bootleg copies of Microsoft Vista for less than $5. There are fast food places all over, including McDonald’s, Starbucks and KFC. In many ways Beijing has the look of a slightly Asian Los Angeles with some Las Vegas touches: sprawl, cars, traffic jams, freeways, large neon signs and boundless optimism everywhere.
Everyone seems to want to be upwardly mobile and show their new wealth with a brand new car of their own. There still are lots of bicycles and people on public transit, but there are also endless slow-moving rows of single-occupant vehicles. Not just cheapies either, but many Chinese-built versions of BMWs, Mercedes and Hondas. These China-built versions are about 25 percent more expensive than what we pay, and imported cars are double what we pay. Both blue and white-collar job salaries are still low by our standards, but are rising fast. Housing in Beijing is expensive—about $200 a square foot for a small 900-square-foot purchased apartment; that's close to what it is in SLO. And, also just like SLO, the housing prices are being pushed up some by outside investors; in this case they're looking for a good investment and a place to stay during the 2008 Olympics.
The guides seem to be able to talk freely about anything they want, including government and politics—even negatively about the tragic Cultural Revolution of 1966-1976.
What a strange brand of communism this is. Could it be that the most wide-open capitalism in the world is in a communist country?
Next time.
-- Dave Garth
See-Saw, House, Gingerbread Man
After 28-plus hours of traveling it was great to step foot into the hotel and know that a bed was only hundreds of feet away. Beijing is covered with a thin layer of snow and a bite in the air, none of which seems to squelch the excitement of the group. If anything the cold air has been invigorating, giving us a burst of energy at 1 a.m. Joy, our tour guide, has been friendly, positive and humorous all at the same time. We climb the Great Wall tomorrow. Tiananmen Square has been bumped to Tuesday as the Chinese Congress is convening there tomorrow. Bed calls.
--- Ali Semon
One long trip
Flying in to Shanghai (where we had a short layover in their ultra-modern airport) and to Beijing, we were treated to a number of fireworks displays celebrating the last day of the Chinese Lunar New Year. 2007 is the Year of the Pig, and as we found out later, the pig is quite revered, so many young couples have planned their pregnancy to have their child born in 2007 to enjoy the good luck the pig symbolizes.
We were also treated to a dusting of snow on the ground in Beijing, where our wide-body China Eastern jet (great food, great service) pulled into a parking space in what seemed to be the middle of nowhere on the tarmac. As we exited, we found ourselves momentarily back in the 60's (or in SLO, I guess) where there is no jet way and you descend on the rolled-up stairs...into a 15 degree, howling wind wake-up call. After a 3-mile bus ride to the terminal, we went through customs and came in to the main terminal where we saw our first big sign in China in 6-foot-tall block letters: STARBUCKS. There's also one next door to our hotel.
Our first full day in China was Monday, with all the workers back on the job after the extended holiday. Though there are certainly a number of people on mostly old bikes, there is city traffic in Beijing. More and more people are buying their own car and, just like home, there are plenty of driver-only cars on the busy roads. With Tiananmen Square constituting the heart of the city, there are 5 "road rings" that encapsulate the city core with their concentric circle pattern. Seven million people live inside the 5th ring, and another 6 million live outside the rings: their suburbs. Citizens can buy an apartment inside the core for about $200 per square foot, so a 900-square-foot apartment will cost about $180,000. You also pay rent to the government since you can never buy the land -- you just get a 70-year lease on that. Since the average Chinese worker makes anywhere from $6,000 (blue collar) to $9,000 (white collar) per year, not many people buy apartments. The younger generations almost all rent. With the Summer Olympics arriving in 18 months, thousands of downtowners have been displaced from their homes inside the rings to outside to make way for the necessary facilities... and there is construction all over. It's a very clean city, though.
Arranged marriages are a thing of the past -- boys and girls meet, fall in love, and get married -- men usually at about 30 and women usually at about 25. For 25-plus years prior to 2005, couples were allowed only one child, but now they can have two children if they want-- but few do. It's a considerably more educated, less religious, and more Western-thinking younger generation coming of age in China. They value education and are definitely fans of capitalism (even the limited form practiced in China).
Today, we went to a park downtown, the Ming tomb, and drove 45 minutes or so outside of Beijing to the Great Wall of China. The Wall, of course, is one of the Seven Wonders and the only man-made object, it's said, viewable from space. Originally 4,000 miles long, it's not continuous anymore, but this section was intact. It generally runs over mountaintops, so it is rugged and not for the faint of heart or short of wind. With steps that are uneven and treacherous to an extraordinary extent, it's an adventure, but is majestic in its views and awe-inspiring in its scope. A few hearty souls from our group made it all the way to the 5th guard tower, which was quite a climb, while most made it to the 3rd tower, rested, then came back down to buy their Great Wall T-shirt, certificate of having been there, or hero card with their picture and the wall (yes, in some ways it's like going to Gatlinburg, Tennessee -- it's a tourist attraction with all that entails).
We saw a great acrobatic show at dinner this evening, then struggled to our beds to catch up on sleep and get ready for the city tour tomorrow. The hotel has high speed internet, so I was able to read The Tribune on-line five minutes after checking in. We may be halfway across the world, but in many ways, that's not a long way anymore.Bob Wacker
Friday, March 2, 2007
SLO Chamber of Commerce - Trip to China
More than 200 San Luis Obispo business owners and leaders will visit those sites during the San Luis Obispo Chamber of Commerce’s trip to China. The trip, which runs from March 3 to 11, is designed for those who want to learn about China’s fast-growing economy.
Three travelers, however, will do more than soak up valuable knowledge. Dave Garth, president and CEO of the San Luis Obispo Chamber of Commerce, Ali Semon, owner of Frame Works, and Bob Wacker, president of R.E. Wacker Associates, will capture the sights and sounds of the journey for The Tribune’s China blog. Starting today, Garth, Semon and Wacker will provide short excerpts of their experiences and photographs.
We hope that you enjoy reading about their travels!
-Julie Lynem, Business Editor