China Business 'Ain't Easy'*
but 40% of the world's population is there so Opt Out Is Not An Option

  • Corporate complexity continues to increase and having executives capable of managing it is the key to a corporation’s success.
  • Deal feed, advantage to the local team   >>  MORE

Its not that easy finding a good Operator  
Meaning someone with a rolodex + who commands respect from the Local community + employees

Avon Products shareholders are suing the board and three former directors of the world's largest door-to-door cosmetics seller, claiming they failed to prevent improper payments in China. - June 26, 2010 SCMP

Here are a few stories from the Learning Curve.

Think you know China? Eight things foreigners get wrong

SHANGHAI, China - As a public service, here’s a thoroughly idiosyncratic, non-comprehensive list of the eight most common misunderstandings about China.

1. China is America in the 1950s (or Japan in the ‘80s, or Mexico in the ‘90s or ...).

Everybody loves a good historic analogy, but China is too big, too complex and too thoroughly integrated with the rest of the world. The country’s consumer culture is leapfrogging its own unique path.

2. China’s public data are unreliable.

There have been tremendous strides recently in the quality of publicly available data, especially for urban demographics. Pay attention to the development plans of central and city governments. They are clear and ambitious, if vague at times. I also recommend a visit to the Shanghai Museum of Urban Planning to anyone curious about population density, retail clusters or transportation infrastructure.

3. China’s Internet is like the rest of the world.

As Google’s recent drama has highlighted, China’s Internet is unique. Global big guys like eBay, Amazon, Facebook, Twitter, Skype and, yes, Google are insignificant or non-existent here.

Want to utilize social networks for your brand? Spend a day learning QQ and mastering its roster of functions not seen in the West. I have a soft spot for Douban, which acts as a sort of user-generated index to the global library of music and film. (QQ is a popular free instant messaging computer program in Mainland China with more than 300 million users; Douban is a web2.0 startup founded by Bo Yang to help users to tag, share, rate, review and discover books, movies and music.)

Empowered by Douban, culturally inclined youth are uncovering everything from punk classics to experimental Dutch cinema, and sharing them with their friends.

4. China’s consumers are split between urban and rural.

Technically true. But most global brands are actually dealing with a limited part of China: the mega-urban and the merely urban. China’s consumer market is overwhelmingly clustered in cities—many with populations of one million or more.

Size isn’t everything. The most relevant factor for marketers should be the city’s access to a cultural center like Beijing or Chengdu. A mom living in a medium-size city two hours from Guangzhou is likely to be more sophisticated about brands than her counterpart living in the massively populated, but under-exposed, provincial capital city Zhengzhou.

5. China’s regional differences are as big as Europe’s.

I hear this one from very sophisticated people, keen to show their respect for the scale and scope of China. Their hearts are in the right place, but they overstate the case. There are certainly regional differences, but within a moderate range. All of China learns the same history, takes the same exams, speaks the same language (at school at least) and watches the same news programs. Climate is one big exception, and it does influence food, architecture and even clothing.

6. There are big generation gaps between each decade.

Generation gaps are huge, and they crop up more than every decade. This is a logical result of fast economic growth. Changes in culture and technology result in wildly different formative environments.

Today’s 25-year-olds grew up watching glossy boy bands like Taiwan’s F4. Meanwhile, kids a mere five years younger watched gender-bending Li Yuchun (from “Super Girl”) and other courageous oddities of the reality TV circuit. Is it any wonder they embrace a weirdness that baffles their elders?

7. China is rapidly Westernizing.

Without a doubt China is modernizing—just look at all the KFCs. But can we call it Westernizing if those KFCs sell congee for breakfast?

While there is a notable increase in Western brands and lifestyle options, it is matched by a comparable increase in historic Chinese culture. Witness the renewed interest in pu’er tea collecting, learning calligraphy and the resurrection of Imperial dishes.

There is a strong argument that China is becoming more Chinese. There’s one other often-overlooked influence: North Asia. Japan, the world’s second biggest economy, sits off China’s shore, and its cultural influence is at least as significant as that of the West. Sure, 18-year-olds in urban China are wearing American Nike shoes. But 15-year-old kids are reading Japanese manga and listening to Korean pop.

8. Chinese youth are divided into tribes.

There is a kernel of truth here, and young people are segmenting themselves at ever-earlier ages. But these tribes look different from their Western counterparts. In the West, we can use magazine, music or brand affiliations as shorthand to describe a group. These don’t quite work in China, what with print media being relatively small and the music scene so confused by piracy.

Brand preference can be descriptive in big cities, but in the rest of the country brand differentiation is more blurred. So what does that leave? Celebrity preference can be useful. Choice of hobbies, including membership in online clubs, says a lot about a person. But there is a lot of fluidity and change.    - 2010 February 3  By P.T. Black, Crain News Service  
P.T. Black is a partner at Jigsaw International Ltd., a boutique lifestyle research agency in Shanghai that looks at the direction of change in China, particularly among young adults. This piece appeared in Advertising Age, a New York-based sister publication of Tire Business.


Dealing With Planning Ignorance

Liu Thai-Ker started his friendship with China in the early 1980s when he was tasked to help the Fuzhou government with the master planning of the city. This was followed by a similar request from Xiamen. Since then, he has helped to chart 'many, many' master plans

Although a number of the master plans were not implemented owing to various reasons, ranging from change in political leadership to a lack of local talent, Mr Liu says that he takes comfort that some ideas were adopted.

'If I can recognise 15 per cent of the land use in my plan, I give the city full marks. I wish they can raise it to 70 per cent, but this is the reality. The issue is that if they get 30 per cent or 15 per cent, isn't that better than zero? Or even minus? If they go on the wrong track, it'll be worse, isn't it? So this is the way I console myself. But I'm hopeful that more and more cities in China will respect the integrity of the master plan.'

He also notes that while there is heightened awareness about environmental issues, developers and local authorities are having a tough time balancing green practices with the pursuit of economic growth. The answer, he says, lies in preparing a thoughtful long-term plan. But not every city government understands that.

'Also, I think one of the reasons Chinese cities or even other Asian cities don't develop well is that they are more architecture-oriented than planning-oriented. If you want to produce a sensational piece of architecture, very easy. Just pay to get a famous architect to do it.

'But it's just a building. It will not change your city. So there are many cities, officials are so seduced by sensational architecture that they think that's a solution to improve their cities, which is wrong. Because sensational architecture, individual pieces, they are like jewellery on a person's dress. The jewellery, no matter how beautiful it is, if it sits on a sick person's body . . . then the jewellery sooner or later will lose its shine anyway. They still don't yet quite understand the relationship between planning and architecture. But this problem is not unique to China. Even Singapore, we also have a tendency to think that good architecture can replace good planning, which is totally false.'  - 2010 November 13   SINGAPORE BUSINESS TIMES

Doing business in China not so easy.  

It is now widely recognised that success in China is predicated upon a cultural understanding of the way business is done in one of the world's fastest-growing economies. "Guanxi" or relationships are critical to this.   Many are hoping that the 'seasoned China hands' they have hired will give them this edge and thus a competitive advantage in sourcing and closing deals.    

China saps Maple Town of Canadian style
A new suburb's look was meant to evoke Canada's spirit, but the grind of local politics crushed most concepts away

FENGJING, CHINA -- It was touted as the first Canadian town to be built in China. There were breathless reports that "Canadian Maple Town" would feature a slice of the Rocky Mountains, a replica of the Northern Lights, eco-friendly Canadian technology and even a depiction of the RCMP Musical Ride.

Today the dream has crashed into the reality of Chinese capitalism. A handful of shrunken maples are about all that survives of the much-vaunted scheme to build a Canadian suburb in the heartland of China.

Almost every trace of Canada has been wiped out of the blueprint. Instead the developers are talking vaguely about a "North American flavour" for the planned suburb of 25,000 residents. Their models show palm trees where the maples were once envisioned.

"We've had to make some changes," acknowledges Zhang Fushun, chairman of the development company at Fengjing, about 60 kilometres southwest of Shanghai. "The overall concept is for a North American flavour, but people understand that this includes the United States too."

The sad fate of Maple Town is a cautionary tale for Canadian architects who venture into Chinese territory. Early enthusiasm for Canadian designs can be quickly sabotaged by profit-hungry Chinese developers, who prefer the familiar habits of cheap construction and faux-foreign design.

Three years after winning a competition to design the project, Toronto architect Lisa Bate puzzles over photos of the site.

She scarcely recognizes a massive neo-classical bridge at the suburb's centre. Her team had planned an eco-friendly bridge of light materials, with room for trees, bicycle lanes and pedestrian paths. Now it is dominated by heavy Roman columns and ornaments, all built from concrete, and the developers have decided to call it the Alexander Bridge, though nobody seems to know why.

"It was supposed to be a suspension bridge, very elegant, with minimal use of materials," Ms. Bate said. "But they said it was too expensive. So, once again, they used massive amounts of concrete. They reinterpreted it into their own vision."

The developer, Mr. Zhang, is unperturbed when a visitor tells him that the bridge is not very Canadian in appearance. "That's because Canada doesn't have its own culture -- it's just a mixture of French and British," he explains airily.

Maple Town was born at the turn of the millennium when Shanghai decided to build nine satellite towns on its outskirts. Each would take its theme from a foreign country: Britain, Germany, Italy, Spain, the Nordic countries -- and Canada.

Six years later, some of the projects are progressing rapidly. Thames Town is quaint, with cobbled streets, a fish-and-chips shop, a pub, a church, a village green, a market square surrounded by Georgian townhouses and even a statue of Winston Churchill.

New German Town is situated near a Volkswagen plant and a Formula One track, with homes modelled on the German city of Weimar. Italian Town has canals inspired by Venice.

But little has happened at Maple Town, except a gradual drift away from the original ideas. Only a few Canadian maple trees have been planted, because they grow too slowly. Instead the developers are growing hundreds of maples from Japan and the United States, which grow much taller in the Chinese climate. Palm trees have been added to the display models.

As for the replicas of the Rocky Mountains and the RCMP Musical Ride, the developers are baffled by the question. Those ideas were dropped so long ago that they cannot even recall them.

"We will use a Chinese approach to interpret the Canadian style," explains Wang Hui, planning director at the Fengjing development company.

An early intention to put Canadian cedar and other materials into the suburb has also been largely abandoned. A sales brochure talked of including "Inuit paintings and Indian wood sculptures" along with statues of Emily Carr and the Group of Seven, but the developers were unable to explain what had become of those ideas. In fact, the entire Canadian theme has become so murky that it is almost impossible to pin down.

"We might not be importing Canadian building materials or architectural styles, but we hope it will embody the spirit of Canada," Mr. Zhang says vaguely.

To make matters worse, Maple Town has fallen far behind the pace of the others. Its developers have spent $100-million (U.S.) on roads and infrastructure, but that represents only one-fifth of the planned budget. None of the housing has been built, except for apartments for the 3,000 residents who will be relocated to make room for the suburb.

"Things have gone sideways," said Ms. Bate, president of Six Degrees Architecture and Design Inc., based in Toronto. "We wanted to promote a Canadian sensibility: clean air, clean water, nature, sustainability. You work your butt off, you work around the clock and then the vision is not carried out."

Her original plan for Maple Town included a Canadian state-of-the-art system of catch basins to remove sediments and oil from the canals. But she soon discovered that her plan had been ignored. "They'd already put in the same old crappy catch basins that they always use," she said.

"As an international firm, we can do the master plan and the design development, but the working drawings have to be done by design institutes, which are owned by governments. They go back to construction practices that they know."

In an earlier China project, Ms. Bate designed a sustainable building, including wind turbines and recycled water, as an eco-friendly gateway to a resort area in Jiangxi province. That design, too, was dumped. "Now it looks like the Palace in Monaco on steroids," she said.

Her firm has scrapped a plan to open a branch office in China. "It's been very frustrating. . . . The central government wants international competitions, sustainable design and energy efficiency. But after you win a competition, you get dumped by the local governments.   They hire the same old guys and it ends up with no relation to the original plan." - THE GLOBE & MAIL    2007 Jan 10



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