I was recently interviewed for the India based Daily NEws and Analysis on why firms would find it hard to leave China.

It was an interesting spin on the recent discussions of China losing its cost advantage, and the resulting article  Why China is so hard to leave had some really good quotes that worked on this question:

Where else but in China can you source the huge quantity of goods that Wal-Mart needs, for instance?” asks Jing Ulrich, chairman of China equities at JP Morgan Securities.

If I want to make 2 million pairs of jeans and I have the fabric, I may go to Chennai, but I cannot wash it because there is no water,” says Arunchalam. “The entire processing industry is dying in India because of inadequate infrastructure.”

if you are interested in learning more about this topic, I suggest taking a few minutes to read the article.  Not relying just on consultants, this article brought in some people operating in the industries that are moving around right now and that has added some nice color to the picture.

VBS TV has just posted an amazing series on Lifen’s air pollution problems. Shot on scene over a week, this series will give you a clear representation of what challenges China’s growth has brought with it. Personally, while I have not been to Lifen, I have been to plenty of cities that are facing similar challenges, and it is distressing sometimes to get off a plane and literally be able to taste the products that a city produces.

In my mind, I am still scratching my head as to why Lifen and the other 15 cities on the most polluted list do not have programs in place to ensure that all the entities who play a role are being given assistance in paying for technologies, and are then being monitored to make sure they are using the technologies.

It is a problem that can be solved, and it is one that if left to continue will only get worse.With that being said, and with the finger pointed, I would like to also point out that there are solutions and that things are beginning to change, and western consumers themselves have a role in this as well.

With so much going on in China, and only a limited amount of bandwidth, I have created this weekly post to highlight articles that I feel are (1) important, (2) relevant, and (3) interesting.

This week there are 3 articles that I have chosen to highlight as each are quite interesting, they are all relevant, and there are issues within each that I think you the reader should be aware of.

If you have an article that you feel needs to be mentioned, please do so in the comments section.

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Since the games are now over, I thought it would be interesting to debate which of the Olympic sponsors came away with gold and which pulled a hamstring.

It is an important question, as Shaun Rein has pointed out on a couple of occasions, and for me it has been interesting process not only watching the games but keeping Shaun’s comments in the back of my head as I watch the games.

So, were I a judge, and I were judging who made out the best through these Olympics I would awarded the following metals:

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For the last few months, one of the projects I have been working on has been retail related, and in the process of combing the city for sites I have come across some spectacular signage.

A site in south Shanghai where a Wenzhou developer has put together a retail complex that is well positioned, has a nice layout, and a nice price. What made the site all the more interesting was the fact that the management company thought that by putting up fake signage (first picture) all over the place it would help with sales. At first glace, and if you were in a cab going by the mall you may actually go for it, but once you are on foot it becomes clear that something isn’ right ….

These two come from a mall in north Shanghai, and while the mickey on is pretty self explanatory, the second one dumbfounded all of us at first…

what is a parapet you ask?

While China has become a country that has begun to manufacture nearly everything, or components of nearly everything, it is still being dogged as a country who only produces low quality crap on a regular basis.

It is something that for me defies logic as I know that Dell, Philips, and Samsung, Panasonic, Nokia and others have huge  operations for manufacturing consumer electronics. at the same time that Medtronic, Bayer, Haemonetics, and GE manufacture healthcare equipment at the same time BMW, Toyota, GM, Briggs & Straton, and Cummins manufacture automobiles at the same time Boeing, Airbus, and Rolls Royce manufacture airplane parts… in CHINA

Sure, there is a fair amount of cheap crap being produced plushy toys, lighters, pens, etc, but at what point will China get away from being known as a country that produces 2nd and 3rd generation goods at low cost to a country that is known for producing high value goods

Why I bring this up, is that I just read the Consumerist article Restoration Hardware Shifting Nearly All Of Its Furniture Production To China?, where the article and more than a few comments land blast China’s product quality

Quoted: Author

Or wait, maybe the company is lying now. Actually, you can’t get the identical quality furniture made more cheaply in China. It will be a product of lesser quality but the company is hoping really hard that charging a couple of hundred dollars less will mean that people will be blinded by the good deal.

Comment:

Made in China is like a warning sticker that says do not but this potentially dangerous poorly made product.

For sure, the Chinese furniture industry is a huge one and there are a wide range of qualities that can be found here, and the author and readers of the article need to understand a simple rule of China.

If company X comes to China to produce a crappy product at a lower cost, that doesn’t mean that China produces crappy product.  It means that company was only willing to pay for a crappy product.

Last Month, I covered a NY Times piece on a Ted Koppel series on China.  Based in Chongqing, this 4 part series was as I put it at the time, Skewered By NYT

Following that piece, I was contacted by a member of the Chongqing team and was sent the discs of the series so that I could view it (I promised to write my review if they paid for shipping)… and so, here are my thoughts:

1) Disc 1:  Joined at the Hip
First in the series, my feeling after watching the disc was that everything was pretty fairly portrayed, that Koppel did a good job of showing that the relationship between that the US and China is complex, interesting, and overall a win win, and that in both countries people are getting screwed.

One point that was hammered home was that while people in middle American got content in their jobs and their lifestyles, the Chinese have made massive sacrifices in family, health, and economy to make sure the next generation has it better than them.

Where I get a bit lost in the episode is that Ted jumps around a lot and tries to incorporate a lot of elements that on their own legs would require their own episode, and I think he lost a big of punch there.

Perhaps a future episode would be to go back to Rolla and see how the town was leveraging its strong Engineering University  capabilities to retrain its people

2) Disc 2: From MAO-ism to ME-ism
Dinner theaters remembering the days of the cultural revolution, gays in China, prostitutes and KTVs, design and architecture, and even religion are covered in this episode.. and while this episode tied some of the people from the first clip to the second, and drew further ties in general, it really tried to hit too many points.  There was a bit in the middle that showed how they were all interrelated as they were all “safety valves” that maintained stability… another topic he looks at from

and that allowed Vincent Lo to continue investing billions into Chongqing

the best quote of the clip was when one of the interviewees (Allen) said: “I do love my country, but I don’t love my government, but I trust my government”… and this lead to what I think was were the really interesting part of the episode entered.

What would happen if China moved away from the one party rule? Vincent seems to think would impact his bottom line as the current system has worked for him and he thinks it has worked for others.  Even for Ted things have changed, and he rightly pointed out that 5 years earlier his taps would have been confiscated for some of the things he had filmed

Disc 3: The Fast Lane
this episode spends its time with auto related topics, and overall does a good job of looking at the various aspects of it: consumers buying more cars, safety, the government building more roads, the Chinese making strides to develop their own cars, Chinese auto firms buying into the China market, gas subsidization, foreign firms in China, and the safety/ emission records of Chinese made firms

The two sections I really liked were: (1) on the site of a road build where you get a nice slice of the workers building roads and digging ditches, their workload is back breaking, their harsh lifestyle, and what motivates them - their kids.. (2) Lifan CEO interview - the future of China’s auto executive and (3) Ford CEO interview - or should I say grilling

Disc 4:Its The Economy Stupid

This episode covers another wide range of topics.  Corruption, real estate development, corruption training, relocating people, harmonious society and safety nets, to political structures… it was an episode the really covered a lot of ground.

Final thoughts:
contrary to the initial reports by the NY times and some who said Koppel was out of water, I think he (and his team) did a pretty good job of identifying real issues. They didn’t settle for the low hanging fruit of air pollution and high gas prices.

Where this series failed for me was where it tried to cover so many topics in so little time, and at times the topics shifted without much of a link. No doubt, the team has a library of footage that they could bring together for some very interesting behind the scenes on several important issues, and I hope at some point they will.

their angle on the migrant issues, environmental costs, and corruption had some of the best stuff, and I was hoping to see more of it.

Three major themes to take away from the series (1) poor people are exploited by the rich/ powerful (2) poor people through hard work, sacrifice, and education believe the next generation will improve, and (3) Everyone in China, no matter how bad they have it, say their lives now are better than at any other time.

My 2 cents. Watch the series and see some stories that you will not typically see of China.