Archive for the ‘Politics and Economics’ Category

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China’s Sticky Floor

May 13, 2009

A friend of mine (thanks Matt) sent over this article about the concept of a sticky floor in china’s work places.

If you are confused about the concept of a sticky floor, it has nothing to do with spittle and cigarette butts, rather it is a similar concept to a glass ceiling but for workers much lower down the food chain.

The authors claim that sexual discrimination is rife amongst China’s factories and women are unable to rise from the factory floor. Worker’s rights being a concept left for wealthy western employees.

I’m not sure that this is true though. In my experience of China, particularly of working with senior party officials, I have met many extremely powerful women. I have dealt with many companies with female CEOs and even negotiated against a fearsome female opponent who was the head of a state owned steel mill.

I am sure that the authors are not incorrect, it is just that one needs to take a step back.

I would like to see more of the study to really understand wage levels for men and women doing the same job. Perhaps they differ greatly.

However, when you look at the numbers of men and women employed in foreign invested companies at managerial level I believe that you would find a far greater number of women employed. It is a simple fact that foreign companies tend to favour women over men.

As with all surveys if you look hard enough you will always find the answer you were expecting but I do think that if we look at the economy as a whole then China is doing pretty well on sexual equality.

There is no doubt that China still has a long way to go on sexual equality but the same might be said for most western countries as well.

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A word about a Crisis

May 1, 2009

I just attended an excellent networking meeting. Nice place, nice people.

The speaker spoke with authority on China although still managed to bring out a couple of the most basic errors about China and the Chinese language around.

This is a shame because I suspect he really knew his stuff but it turns people off when somebody gets something like this wrong.

The word for ‘crisis’ in Chinese is weiji 危机 and it is commonly said that the word is made up of two characters meaning ‘danger’ and ‘opportunity’ as such a crisis is dangerous but there is still opportunity.

So far, this makes sense. However, the character ji really doesn’t mean ‘opportunity’ it means ‘an opportunity for something to occur’ as such the best literal translation would be that weiji means ‘a moment where there is the opportunity for danger to occur’ or more simple ‘an occurrence of danger’

The second common mistake is to refer to China as the Middle Kingdom, the literal translation of the actual name for China used by the Chinese 中国 zhongguo. People often use this to say that the Chinese saw (see) themselves as being at the centre of the world.

This is not actually true, they considered their land as a sacred place that existed ‘between heaven and earth’ not the centre of this earth that barbarians reside in.

I would point out that this seems rather conceited but I am after all a POM so I am not going to lecture anyone on seeing their country as hollowed, special or anything else for that matter.

As for the Chinese seeing opportunity in a crisis, I would say that it is true, they are a smart people and smart business people from all races see crisis as an opportunity. Just don’t try to mangle the language that I love to prove the point!

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Interesting Article on the China’s Copper Strategy

April 22, 2009

My friend Matt sent me this article yesterday, which I thought I would share with everyone.

Seemingly a dry look at what China is doing regarding copper, it contains one or two interesting bits of information and style.

I have seen the question of whether or not China looking to use the current economic situation to further its interests quite a lot lately.

I often find it interesting with western journalists that they see such a move from the US as ‘prudent financial policy’ (although i suspect when it comes to the US that term is oxymoronic) but when China does it they are ‘trying to take over the world.’

The stand out part of this article is that it does not take such a tone.

So China’s longer-term view is that now is the time to secure a substantial foothold in copper to ensure the country will not be exploited in the same way it was with oil, iron ore and other materials in the last boom. ”

As someone who was on the western side of negotiations on iron ore deals 6 years ago I witnessed first hand just what that exploitation was.

At the top end of the scale were the major mills who had to purchase in a sellers market. It wasn’t so bad for them but they were definitely the weaker party during talks.

At the bottom end were thousands of massively uninformed small Chinese buyers scrabbling around for any bit of iron ore they could lay their hands on ripe for exploitation by anyone claiming to have ore. Right in the middle of this unholy mess were the mines in India and Brazil just putting up prices until it all collapsed.

No wonder the Chinese have decided to change their strategy- I would say that is a very smart move.

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What is going on in China’s luxury goods sector?

April 13, 2009

I have heard from a good friend who is also in the luxury goods sector in China that even companies like Ermenegildo Zegna are having trouble paying their bills?

Is this just a case of pushing the smaller companies to keep reserves up or are they being squeezed hard by head office?

Personally I find it hard to believe that the luxury goods sector should be anything but booming in China. Given the enormous resources of the wealthy in China, anyone with money to put down 5k on a handbag probably hasn’t been greatly affected by the credit crunch.

I realise that the casual visitor to China will see a plethora of LV nags in the hands of the myriad golden sparrows on the streets of Shanghai, but most of the bags are fake.

Perhaps the companies are cannibalising profits from China to feed into other areas. Certainly, in this climate I don’t much feel like buying myself a new watch. Although just as like, that is fatherhood speaking too.

Watch this space, I will be interested to hear of any reports on how the market is actually doing.

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Are You an Influential Foreigner?

December 5, 2008

I am quite a fan of Tim Johnson’s Blog, China Rises he often comes up with some interesting stories and maintains a reasonably fair balance of views on China. Neither a panda hugger nor a China basher.

He picked up on this article from China’s news agency Xinhua talking about China’s most influential 15 foreigners.

I always find these things quite hard to take as they simply reinforce the rather outdated notion that there is ‘China’ and ‘The Rest of the World’ a concept that can be very annoying if you are just trying to get things done in China without becoming obsessed with cultural differences or going troppo*

However, as ever lessons can be learned from the fact that Xinhua has put out such an article. China really really cares about this sort of thing- whether you like it or not there is a perception that China is separate to the rest of the world and that if you are going to be in China you had better have a good reason for being there and a part to play in the country.

I find it ironic that a nation that has given the rest of the world millions of immigrants who are famed for turning up in a country, keeping themselves to themselves and working extremely hard to better their own lives actually tends to look down on non-Chinese doing the same thing in their own country**. But this does seem to be the case.

If you are doing business in China don’t expect to get a lot of thanks or credit for being a responsible corporate citizen, employing people on a fair basis and quietly paying your taxes. To be a real friend of China you are going to have to portray an image of benefiting the face and prestige of the country and showing a real interest in China and not just the money to be made.

A few rules of thumb for business people undertaking ventures in China:

1) Present the right PR image. What you are doing should demonstrably benefit China and you should emphasise that China adds to your service greatly as well. Setting up a fibre glass assembly line we explained to local officials that we wanted to open a factory in China as the greater supply of labour would allow us to use a better technique for our products improving quality over the process used abroad. True or not, this is a much better way of putting it than “we want to open up here because labour is cheaper.”

2) Show you care about China. Emphasising that you really enjoy being in China and that you are honoured to be doing business there is a very positive image. I have always portrayed the image that a primary focus for me is being in China and learning about China, doing business there too is a great bonus. Of course, it does help that this is basically the truth in my case.

3) Don’t be condescending. So you have a new technology that can help millions of Chinese or a commodity that China needs but it is probably best not to portray it as such. Present the facts and allow them to make up their own minds. The Chinese have survived for a long time without your new computer software and if you rub it in their faces that you know they need it they will simply clam up. Confidence in your product is fine, arrogance is not, even if you know you have something totally new.

4) Leave your cultural preconceptions at home. There are probably at least 2 ways to view any issue so why bother upsetting people unless you are truly informed. Politics is best left at home, don’t even try to agree with the Chinese line on an issue, just leave well alone.

Some of the above may look very simple and obvious but you would be amazed how many people do not follow these simple rules.

I’ve seen people turn up in China, walk around with their noses in the air, acting as if the Chinese should be happy they are there.

Trust me, this is a very bad strategy. Enjoy, be polite, make friends and act decently. You probably won’t win an award from the government for being a “Friend of China” but you will have a much more pleasant time and please your hosts.

* going troppo: The saddest form of culture shock by where one becomes ‘like native’ eschewing all forms of one’s own culture but fooling no one, least of all the Chinese. Best avoided.

** I mean this as a term of respect to hardworking Chinese immigrants everywhere.