Work(s) in Progress

90 days

What would you do with 90 days?

I am 30+ days into a 90 day "transition" out of my current job. I can remember like it was yesterday my disappointment in thinking that I would not get this job, my dream job, back in 2007. A little time and luck turned things around. I can still remember the excitement of the first week in January of 2008 when everything was new (and apologies, recent domain changes mean all of the links in that old posts will be broken). The best way that I found to describe my job was "I help people make their dreams come true." Best job ever. I am going to miss it.

Just 10 days before I learned that my situation would change I gave this interview on our local news channel related to our annual business plan competition. More info here. 10 days after this moment I learned that my job title/duties would be restructured. I was offered the opportunity to retain a different job but did not feel that I would be the best person for that new position. Some people have told me that I should have accepted the offer in these perilous economic times, that A JOB is better than NO JOB, even if it is a job for which one is not enthusiastic or qualified and that I should have begun job hunting while I was allegedly working at the new job. And there is a part of me that really wishes I could have taken their advice. It would have been the safe thing to do. But at the end of the day, in all things, I am either all in or not at all. When I commit to a job, it's 24/7. I did not feel that I could give that level of commitment to the new position. 

And so, a 90 day transition plan was negotiated. So far, I have applied for 14 jobs. I was rejected for 2 of them (ouch but I'm glad they were quick about it); 2 were retracted (i.e. the companies decided not to fill the positions); and, I withdrew my application from 1 of them (decided I would not give it my all). Just waiting on the rest knowing that long waits are not good things. 

And suddenly 30 days have passed. Poof. Only 60 days left before things get interesting. And I am pondering how I've spent the last 30 days and how I should spend the next 60. I spent a week with an uncle with end stage renal disease, diabetes, etc. He was in the hospital and it was time well spent. The mother and nephew of someone important to me was in town for the last month and I spent a lot of time with them. Again, time well spent. But I am still thinking about the impact and legacy I want to have. ALL.OF.THE.TIME. 

And yet, it's so easy for me to get distracted and for the hours to pass quickly. I recently discovered ReGenenis on Hulu. I watched 6 episodes back to back. I will likely never watch CSI again. While the lab techniques are primitive, the science discussed is rock solid, likely because they recruited great scientific consultants for the show. While ReGenesis has been off air for a few years, I am loving the hubris, the flawed personalities, the total commitment to the work, the agony and ecstasy of the discovery, the sleepless nights, the dreams of research, the desire to make a difference, etc. 

I've been closing out an NIH funded research project for the last few years. We are finally almost out of grant dollars. I have very mixed emotions about this. I love watching the scientific drama unfold on TV but the reality of most discovery research is much slower with the potential for a much smaller impact. I want to support discovery research but I don't necessarily want to do it anymore. I prefer discoveries that are in transition to commercialization. Mine was not. I've been working in laboratories since 1985. 25 years. More than half my life. The funding should run out just about when my 90 day transition ends. Yikes. 

So many endings coming soon. So much change. I have never had a "break" this long and don't expect to have one again. I like to be busy, to add value, to make a difference. There are only 60 days left. How should I best spend this time? Travel? Spanish Immersion Course? Volunteer? Learn to Surf? 

Leading from Within

About a month ago I spent 3 days at the magnificent (Orvis recommended) North Fork Ranch in Shawnee Colorado. While it’s only about an hour from Denver, it feels inaccessible, as in there is no ATT cell service there. I was blackberry silent for 3 days although the lodge did have wireless internet in some areas. Karen her husband Dean are amazing hosts. Some from the trip are still talking about the food. The accommodations were great too. I had a private room, suite really, with King sized bed, sitting area, and walk in rain shower with heated tile floors in my bath. The location was breathtakingly beautiful.  

 

Going to a functioning Dude Ranch had never been on my "to do" list but in many ways it was just what I needed. I was there for a 3 day program called “Leading from Within” taught by Greg Giesen  & Steve Sorenson. A colleague had introduced me to Steve who’d invited me to sign up for the program. While Steve had attended the program in the past, this was the first time he’d been one of the facilitators. Most of the leadership training I’ve done in the past has either been predominantly skill based (e.g. HERS Denver Institute for women in Higher Ed Administration) or goal/vision/purpose based (e.g “Visionary Leadership” as taught by Ed O’Connor  at the Business School at UC Denver). This was different, and I knew it would be going in. We only had 8 people in our group which made for a very intimate & safe environment. Historically, Greg had been keeping these small by design. I can’t write many specifics because we all promised to keep each other’s secrets, and it’s a proprietary program and one of Greg & Steve’s businesses so…if you want more detail, sign up! 

My friend Luis writes often about “fast trust.”  Greg really has this mastered. How do you create trust in a group of strangers (or even harder, in a group of coworkers, some perhaps with adversarial or supervisory roles) in the first hour or two of meeting so that meaningful conversation and self work can begin? And perhaps more importantly, create a change that endures past the 3 day retreat so that people do not regret what they’ve shared once they’ve left the safe environment. At its most fundamental, Leading from Within, is structured around the premise that you cannot lead others effectively until you are completely certain that you know who you are. And that being your authentic self, all of the time, is the most effective and powerful place from which to lead. 

We did some mundane things to poke at our values and life purpose. We probed those barriers, insecurities and anchors that hold us back from our potential (Greg has another name for these and a way to release them). We shared our biggest fears, our most embarrassing moments, and our greatest hopes. And at least for me, all of those things were the easy part. I’ve done many of these exercises in some form before. I’m pretty clear on my strengths and weaknesses. I’m largely comfortable in my own skin. I know where most of my major issues are and how they get in my way and under what circumstances. And then we wrote our own eulogies with the choice of today or some future day but we had to write them as someone in our lives (not as ourselves), and I broke, a little; OK I broke lots. I am still looking for the pieces to put back together.

For some in our group the other exercises were the big challenges and this one was easy. For me, even one month later, I still do not want to examine it too closely. There be dragons. Unresolved. Not quite ready for the light of day. If the metaphorical bus runs me over tomorrow, what will be my legacy? Will anyone know me well enough to speak a eulogy that represents me truly? Why have I allowed so few to know me fully? In the perhaps half of my life that remains how can I do more, be more, have more impact? And while I’ve blogged about them, how many who count me among their friends really grok  my core values and life purpose and know how fundamental it is to me. 

For some this was so easy. They were incredibly certain in their roles as sons/daughters of god, as parents, as children, as spouses, as business people. I envy them. All.

And that perhaps is the secret of the Leading from Within 3 day retreat. One exercise may bring one person to their knees while the rest of the participants remained unfazed. But after 3 days, there will be at least one that will cut to the core. It’s not comfortable, and I don’t recommend doing it often, but every year or two, these things should be poked at. How big are your dragons getting? How can you shrink them? I am pondering mine. 

I’m thinking about impact and openness. ALL.OF.THE.TIME. I want to do more, be more, make more. But how? Where?

We’re hosting Greg & Steve (picture below is Greg, me, Steve) for a brief seminar on June 22 from 5:30 to 6:30 PM at the Bard Center. Let me know if you’d like a taste of what they offer. Else catch them in July in San Diego at the  Destiny Now event  or register for their next  Leading from Within workshop in September in Colorado. 

 

In Search of Colorado Entrepreneurs

I am the Executive Director of the Bard Center for Entrepreneurship at the University of Colorado Denver. Each year we host an annual business plan competition that is open to all early stage Colorado companies. Over the years, the Business Plan Competition has grown from a narrowly focused University of Colorado Denver event to a statewide competition. Last year more than 76 entries were received. We will award more than $100,000 in cash and in-kind services to promote the development of successful new Colorado based companies.

Recent winners span a variety of Colorado industries, including: biotech (2006; Tensegrity Prosthetics); transportation engineering (2007; Apex Design); software services for the collection and analysis of special education data (2008; Developing Minds Software); and natural foods (2009; Olomomo Nut Company). All of these companies are progressing well, as are almost 100 others that have been formed by Bard Center alumni; they are enhancing economic development and furthering the entrepreneurial spirit throughout the region.

The deadline to enter our 9th Annual Bard Center for Entrepreneurship Business Plan Competitionis 11:59PM MST on Monday April 5, 2010.

In addition to our business plan competition, there are many other local opportunities for entrepreneurs such as the 22nd Annual Colorado Capital Conference (April 6^th deadline to apply; PDF info).

Biotechnology focused companies (medical device, pharma, biofuel, etc.) should apply to attend BioBootCamp (April 29 & 30; free to qualified entrants). The application deadline for BioBootCamp has been extended to April 15^th but apply early to reserve your seat.

CleanTech (sustainability) focused companies should consider entering the Rocky Mountain Clean Tech Open.

If you are not ready to enter our business plan competition this year, I hope you will consider applying next year. RSVP to watch the competitors present in the morning or buy a ticket for our June 10 awards luncheon.

9th Annual Bard Center Business Plan Competition Rules:

• Each team must complete an Executive Summary, Participant Waiver Agreement & Competition Application  on or before 11:59PM MST April 5, 2010 to enter the competition. Please submit documents as PDF files to [email protected].
• Executive Summaries must be based on original work: creating a new business or substantially improving an existing business. Applications for both for- and non-profit Colorado based companies are welcome.
• Companies must be early stage: with < $150,000 in Angel or other equity funding received on the date of application. SBIR, STTR and/or other grant funding is OK.
• Previous Bard Center business plan competition finalists may only enter with a new business idea.
• Executive summaries should be concise, to the point, and clear (max 3 pages) with Proforma Financials (see example). Executive Summaries without Financials or in excess of 3 pages will not be reviewed.
• Key metrics used for scoring include potential viability of the company, innovation, scalability and overall quality of the written plan (Scoring Matrix)
• The Top 20 Finalists must be able to attend Elevator Pitch Night (May 25, 2010 from 5:30PM to 8 PM at the Bard Center which will be used in combination with the written business plan to select the Top 6 Finalists.
• The Top 6 finalists must be able attend the June 10, 2010 Business Plan Competition.

Days 14 & 15: Hong Kong & Home

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Days 4 & 5 are here. Lots of meetings with companies and other experts on Chinese business development.

Days 6 is here. Our journey to Hangzhou.

Days 7 & 8 are here. Hangzhou, Alibaba.com & Harsco Metal Company & travel to Guangzhou.

Days 9 & 10 are here. Guangzhou.

Days 11 & 12 are here. Guangzhou to Hong Kong.

Day 13 is here. Hong Kong.

Day 14 (January 15)

Friday was much like being back in school. We had several formal presentations in one of the conference rooms of our hotel. We heard from Dr. Leslie Young (Chinese University of Hong Kong), George Mansfield (Coors Brewing Company) and John Miller (Alumnus, University of Colorado Denver Business School).

We first heard from Dr. Leslie Young, a Professor of Finance & the Executive Director of the Asia Pacific Institute of Business   at the Chinese University of Hong Kong. I used to think that I was in an elite group starting college at 16 and completing my PhD by 26. Dr. Young finished his PhD in Mathematics at age 20. As one of my martial arts teachers used to say, “there is always someone out there who is smarter, faster, stronger or better looking.” Indeed.

Leslie spoke to us about the growth of China and the US and what made them economically the top two nations in the world. Specifically the title of his talk was “Capital Accumulation in China vs US: Institutions, Resources and Elites.” Any errors or misrepresentations of his talk are due to my inadequate note taking skills. His talk was educational, entertaining and at times inflammatory. I suspect that his students either love or hate him.

In Dr. Young's opinion, China was still a 3rd world economy in 1979 but is now a leading industrial power and exporter. This change required both capital accumulation and utilization. China made it up as they went along by experimenting and improvising. Importantly, they immediately shut down the failures and copied the successes. This experimental approach obviously worked. He stated that the system in use today in China is somewhat hard to describe, “a post modern pile of things that work.” Whereas the US system, which took 300 years to get us to where were are, used to be the “gold standard” but it most likely past its prime.

While Chinese institutions (e.g. law enforcement, environmental protections, worker protections) are “rickety” compared to the US, in part it was the US processes and procedures that allowed things like the recent subprime mortgage crisis. So in Dr. Young's opinion, both China and the US have succeeded despite troubled institutions and processes. Both countries had vast resources (land/natural resources) that could be accessed for essentially free by their governments. China reappropriated vast swaths of land during the cultural revolution, whereas the US essentially claimed all of the lands from the native peoples giving the Chinese & US governments access to the 3rd and 4th largest blocks of real estate in the world for free. So in his opinion, places like India may never catch up in part because Ghandi did not take the land from the people whereas Mao was a “murdering bastard” who turned the land into profit.

He said that if you looked at the current PPP (purchasing power per person), China is #1 even though their GDP is not more than the US. Apparently China, Brazil, Poland and Hong Kong all lead the USA on this index. (Note: This does not match data found on Wikipedia which defines PPP as purchasing power parity, the CIA or the World Bank websites although the metrics are not completely identical.)

In his opinion the free land allowed low wages (since no rent needed to be paid by farmers), the workers then had low food prices leading to cities with low rents and low food costs. Thus, the overall quality of life could be good with low prices and low wages. At the same time, the (Chinese) government could actively build infrastructure and industrial parks with housing on the same land (selling the housing to offset costs) near export zones. Because state run companies had no shareholders, all returns were reinvested to either start new companies or to grow the existing businesses.

Dr. Young pointed out another big difference between China and the US. China has funded many social services: health, education and pensions but citizens who leave state owned enterprises (SOEs) lose access to those services and needed to increase savings to replace the value kept by the state firms. In this way the social capital can grow unburdened by social obligations (the workers have no real claim on it). This is the opposite of how it works in the US. The US has entitlements (social security, medicare, medicaid) that are not backed by assets whereas China has assets without entitlements.

The only real danger to China's current economic boon may be the proportion of their assets held as US dollars.

Dr. Young spent a good amount of time comparing the similarities of China and US with respect to how expansion and urbanization was driven by public-private partnerships that increased land value and industrialized the nations. One major difference was that in China the rewards for success were often tied to power and status, but not necessarily wealth as would have been the case in the US.

Dr. Young used to think that the US system was stable and flexible and a real showcase was technology, e.g. Silicon Valley.  However, the “bad boy” in the US was the financial system where innovation was utterly counterproductive. He believes that the people in charge of rules with integrity have been tempted by rewards in a way which caused them to shatter them. In contrast, in China there is no real system to collapse. There are plenty of local scandals but no national system to collapse. Because China is a system where relationships matter, the scale of a corrupt coalition is limited. The problems are local not systemic.

Dr. Young described several other systemic differences between China and the US. In China, the system is structured so that the incentive is the elite can “grow the pie” and then skim from it. Because the metaphorical pie is growing, the skimming really does not hurt the system and those with the most integrity and best capability can be be promoted. In contrast, in the US, the elite are reducing the size of the pie in order to capture a larger percentage of it for personal gain. Our own system of law and rules allows those individuals to “bend” the laws to their personal advantage. This system allows the US business elite and political elite to essentially corrupt each other. He then moved onto a commentary on the US mechanisms for presidential selection. For the last few cycles, we have picked Presidents for their packaging, people who appeal to us in 30 second sound bytes.

I asked him how the US can stay competitive in this global landscape. More specifically I wanted to know what can my entrepreneurship center do to ensure that our students and incubator companies are competitive? He said we should just continue doing what we are doing with the understanding that we (the USA) will be less important on the global landscape in the future. This answer was NOT reassuring or compelling.

After meeting with Dr. Young, George Mansfield, the head of international marketing for Coors Brewing company, spoke to us about his experiences in Asia. George has been with Coors for about 25 years and in Asia since 1996. Like most entrepreneurial ventures, he initially worked out of coffee shops in Hong Kong before finding a Chinese national to serve as his general manager. Many international beer companies have failed to enter China successfully. It sounds like Coors resilience thus far is due in large part to flying under the radar by focusing on being a niche brand in the high end market. They are only distributed at very high end bars in large part so that they do not compete with local beer brands. Furthermore, while Coors has developed the expertise to reach the wealthy high end of the market, they do not yet have the expertise to penetrate the local markets.

We discussed several “loopholes” that need to be exploited to operate legally in China. Much of the discussion turned cultural – recruitment & retention of employees, management styles that need to change in Asia, compensation and the use of scantily clad PGs (Promotion Girls & related products) to sell the beer. We also spent some time discussing the ongoing demographic shift in China. Young men will soon outnumber women by about 24 million.  This of course may create social dysfunction or alter beer drinking habits. However, he reminded us that people always underestimate how fast things change in China. But he cautioned us to not underestimate the country or the people. He believes that economic recovery in China is vastly underrepresented in US media.

We briefly discussed US competitiveness. How can you compete in US if you don't learn a foreign language, and need protection for everything? Especially when in China people will work for 4K US per year, work 80 hours per week, are happy, hard working, etc. He did not have any answers beyond investing in China.

Finally we chatted briefly with John Miller, an alumnus of the University of Colorado Denver 11 Month MBA program.  John first went to China with Chen Ji as a student and recently took a job in Hong Kong with with AECom  – an environmental engineering firm for SE Asia ( but NOT mainland China). John had only been in Hong Kong for 2 months but was simply loving it. He stated that the pace was amazingly fast and that many American simply could not handle the pace of change and gave up to go home. He thought that employees must be open and willing to learn and accept that the US way may not in fact be the BEST way to approach a problem.

While historically many Americans (and foreigners) moved to Hong Kong for the “expat packages” that these are largely becoming a thing of the past. He was hired as a local with very few perks for living expenses. However, the salary is good and there is clearly no hardship to living in Hong Kong. However the US has punitive tax regimes which lower incentives for working abroad. His company handled the visas and contracts and will hire him an accountant when the time comes for him to file his US taxes.

After this educational morning, I spent the remainder of my time in Hong Kong as a tourist. Among other things, I took the tram to Victoria Peak, which was one of the prettiest places I have seen on this earth (though I did not expect to see a multi-story shopping mall there). While I was unbelievably ready to come home to the USA, I wish I'd had more time in Hong Kong. I want to go back!

 
Day 15: Back to Denver

I was once again grateful for upgrading all of my seats to Economy Plus. Thank you United! I did not have anyone sitting next to me for the long flight from Hong Kong to San Francisco. We were all hand searched prior to boarding our flight from Hong Kong to San Francisco but customs screening in San Francisco was uneventful, almost cursory. I cannot adequately express how happy I was to get home, to hear and see English everywhere, to sleep in my own bed, and to safely drink water from the faucet, any faucet.

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Days 4 & 5 are here. Lots of meetings with companies and other experts on Chinese business development.

Days 6 is here. Our journey to Hangzhou.

Days 7 & 8 are here. Hangzhou, Alibaba.com & Harsco Metal Company & travel to Guangzhou.

Days 9 & 10 are here. Guangzhou.

Days 11 & 12 are here. Guangzhou to Hong Kong.

Day 13 is here. Hong Kong.

Day 14 (January 15)

Friday was much like being back in school. We had several formal presentations in one of the conference rooms of our hotel. We heard from Dr. Leslie Young (Chinese University of Hong Kong), George Mansfield (Coors Brewing Company) and John Miller (Alumnus, University of Colorado Denver Business School).

We first heard from Dr. Leslie Young, a Professor of Finance & the Executive Director of the Asia Pacific Institute of Business   at the Chinese University of Hong Kong. I used to think that I was in an elite group starting college at 16 and completing my PhD by 26. Dr. Young finished his PhD in Mathematics at age 20. As one of my martial arts teachers used to say, “there is always someone out there who is smarter, faster, stronger or better looking.” Indeed.

Leslie spoke to us about the growth of China and the US and what made them economically the top two nations in the world. Specifically the title of his talk was “Capital Accumulation in China vs US: Institutions, Resources and Elites.” Any errors or misrepresentations of his talk are due to my inadequate note taking skills. His talk was educational, entertaining and at times inflammatory. I suspect that his students either love or hate him.

In Dr. Young's opinion, China was still a 3rd world economy in 1979 but is now a leading industrial power and exporter. This change required both capital accumulation and utilization. China made it up as they went along by experimenting and improvising. Importantly, they immediately shut down the failures and copied the successes. This experimental approach obviously worked. He stated that the system in use today in China is somewhat hard to describe, “a post modern pile of things that work.” Whereas the US system, which took 300 years to get us to where were are, used to be the “gold standard” but it most likely past its prime.

While Chinese institutions (e.g. law enforcement, environmental protections, worker protections) are “rickety” compared to the US, in part it was the US processes and procedures that allowed things like the recent subprime mortgage crisis. So in Dr. Young's opinion, both China and the US have succeeded despite troubled institutions and processes. Both countries had vast resources (land/natural resources) that could be accessed for essentially free by their governments. China reappropriated vast swaths of land during the cultural revolution, whereas the US essentially claimed all of the lands from the native peoples giving the Chinese & US governments access to the 3rd and 4th largest blocks of real estate in the world for free. So in his opinion, places like India may never catch up in part because Ghandi did not take the land from the people whereas Mao was a “murdering bastard” who turned the land into profit.

He said that if you looked at the current PPP (purchasing power per person), China is #1 even though their GDP is not more than the US. Apparently China, Brazil, Poland and Hong Kong all lead the USA on this index. (Note: This does not match data found on Wikipedia which defines PPP as purchasing power parity, the CIA or the World Bank websites although the metrics are not completely identical.)

In his opinion the free land allowed low wages (since no rent needed to be paid by farmers), the workers then had low food prices leading to cities with low rents and low food costs. Thus, the overall quality of life could be good with low prices and low wages. At the same time, the (Chinese) government could actively build infrastructure and industrial parks with housing on the same land (selling the housing to offset costs) near export zones. Because state run companies had no shareholders, all returns were reinvested to either start new companies or to grow the existing businesses.

Dr. Young pointed out another big difference between China and the US. China has funded many social services: health, education and pensions but citizens who leave state owned enterprises (SOEs) lose access to those services and needed to increase savings to replace the value kept by the state firms. In this way the social capital can grow unburdened by social obligations (the workers have no real claim on it). This is the opposite of how it works in the US. The US has entitlements (social security, medicare, medicaid) that are not backed by assets whereas China has assets without entitlements.

The only real danger to China's current economic boon may be the proportion of their assets held as US dollars.

Dr. Young spent a good amount of time comparing the similarities of China and US with respect to how expansion and urbanization was driven by public-private partnerships that increased land value and industrialized the nations. One major difference was that in China the rewards for success were often tied to power and status, but not necessarily wealth as would have been the case in the US.

Dr. Young used to think that the US system was stable and flexible and a real showcase was technology, e.g. Silicon Valley.  However, the “bad boy” in the US was the financial system where innovation was utterly counterproductive. He believes that the people in charge of rules with integrity have been tempted by rewards in a way which caused them to shatter them. In contrast, in China there is no real system to collapse. There are plenty of local scandals but no national system to collapse. Because China is a system where relationships matter, the scale of a corrupt coalition is limited. The problems are local not systemic.

Dr. Young described several other systemic differences between China and the US. In China, the system is structured so that the incentive is the elite can “grow the pie” and then skim from it. Because the metaphorical pie is growing, the skimming really does not hurt the system and those with the most integrity and best capability can be be promoted. In contrast, in the US, the elite are reducing the size of the pie in order to capture a larger percentage of it for personal gain. Our own system of law and rules allows those individuals to “bend” the laws to their personal advantage. This system allows the US business elite and political elite to essentially corrupt each other. He then moved onto a commentary on the US mechanisms for presidential selection. For the last few cycles, we have picked Presidents for their packaging, people who appeal to us in 30 second sound bytes.

I asked him how the US can stay competitive in this global landscape. More specifically I wanted to know what can my entrepreneurship center do to ensure that our students and incubator companies are competitive? He said we should just continue doing what we are doing with the understanding that we (the USA) will be less important on the global landscape in the future. This answer was NOT reassuring or compelling.

After meeting with Dr. Young, George Mansfield, the head of international marketing for Coors Brewing company, spoke to us about his experiences in Asia. George has been with Coors for about 25 years and in Asia since 1996. Like most entrepreneurial ventures, he initially worked out of coffee shops in Hong Kong before finding a Chinese national to serve as his general manager. Many international beer companies have failed to enter China successfully. It sounds like Coors resilience thus far is due in large part to flying under the radar by focusing on being a niche brand in the high end market. They are only distributed at very high end bars in large part so that they do not compete with local beer brands. Furthermore, while Coors has developed the expertise to reach the wealthy high end of the market, they do not yet have the expertise to penetrate the local markets.

We discussed several “loopholes” that need to be exploited to operate legally in China. Much of the discussion turned cultural – recruitment & retention of employees, management styles that need to change in Asia, compensation and the use of scantily clad PGs (Promotion Girls & related products) to sell the beer. We also spent some time discussing the ongoing demographic shift in China. Young men will soon outnumber women by about 24 million.  This of course may create social dysfunction or alter beer drinking habits. However, he reminded us that people always underestimate how fast things change in China. But he cautioned us to not underestimate the country or the people. He believes that economic recovery in China is vastly underrepresented in US media.

We briefly discussed US competitiveness. How can you compete in US if you don't learn a foreign language, and need protection for everything? Especially when in China people will work for 4K US per year, work 80 hours per week, are happy, hard working, etc. He did not have any answers beyond investing in China.

Finally we chatted briefly with John Miller, an alumnus of the University of Colorado Denver 11 Month MBA program.  John first went to China with Chen Ji as a student and recently took a job in Hong Kong with with AECom  – an environmental engineering firm for SE Asia ( but NOT mainland China). John had only been in Hong Kong for 2 months but was simply loving it. He stated that the pace was amazingly fast and that many American simply could not handle the pace of change and gave up to go home. He thought that employees must be open and willing to learn and accept that the US way may not in fact be the BEST way to approach a problem.

While historically many Americans (and foreigners) moved to Hong Kong for the “expat packages” that these are largely becoming a thing of the past. He was hired as a local with very few perks for living expenses. However, the salary is good and there is clearly no hardship to living in Hong Kong. However the US has punitive tax regimes which lower incentives for working abroad. His company handled the visas and contracts and will hire him an accountant when the time comes for him to file his US taxes.

After this educational morning, I spent the remainder of my time in Hong Kong as a tourist. Among other things, I took the tram to Victoria Peak, which was one of the prettiest places I have seen on this earth (though I did not expect to see a multi-story shopping mall there). While I was unbelievably ready to come home to the USA, I wish I'd had more time in Hong Kong. I want to go back!

 
Day 15: Back to Denver

I was once again grateful for upgrading all of my seats to Economy Plus. Thank you United! I did not have anyone sitting next to me for the long flight from Hong Kong to San Francisco. We were all hand searched prior to boarding our flight from Hong Kong to San Francisco but customs screening in San Francisco was uneventful, almost cursory. I cannot adequately express how happy I was to get home, to hear and see English everywhere, to sleep in my own bed, and to safely drink water from the faucet, any faucet.

Day 13: Hong Kong

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Days 4 & 5 are here. Lots of meetings with companies and other experts on Chinese business development.

Days 6 is here. Our journey to Hangzhou.

Days 7 & 8 are here. Hangzhou, Alibaba.com & Harsco Metal Company & travel to Guangzhou.

Days 9 & 10 are here. Guangzhou.

Days 11 & 12 are here. Guangzhou to Hong Kong.

Day 13 (January 14)

While our hotel, Royal Pacific Hotel, was dated and the rooms microscopic, Hong Kong was terrific. Hong Kong was returned to China in 1997 but remains a relatively autonomous Special Administrative Region through at least 2047.

We started our day walking through Kowloon Park  to take the MTR  (mass transit railway)  to the Central station for our meeting at Invest HK.

Our host was Simon Galpin, the Director General of Investment Promotion, who shared with us the myriad reasons why a company should locate at least its headquarters to Hong Kong (versus for example Shanghai or Singapore). Their website outlines the reasons shared with us and many more. However, they include the legal system (modeled on British Common Law), the convertibility of the currency, the location in Asia, the low tax rate, and the informational freedoms. More than 1100 US companies have an office in Hong Kong. Approximately 60,000 US citizens call Hong Kong home. It's very easy to get a Visa to work in Hong Kong and the long term British influence made Hong Kong the most familiar of the cities we visited.

From here we moved on to Cyberport (official site) where their COO Mark Clift gave us a tour and explained their history and operations. I fell in love with Cyberport (wiki version) as a model for economic development. It's run by government but is a true partnership between government, private industry and higher education. It was built to support the IT and telecom industries and has both anchor tenants (e.g. Microsoft), core facilities and incubator companies. The $2 billion US paid for itself (and then some) through the management of the 5-star Meridien Hotel and sale of the on-site condominiums. So far their incubator has a 90%+ success rate. Many of us expressed interest in moving to Hong Kong after seeing these facilities.

From here we went to lunch at a cooking school Hospitality Industry Training and Development Centre (HITDC) at the Vocational Training Council (vocational training council) with a member's only English speaking dining society. The students are taught not only how to cook various regional cuisines but also how to serve and communicate with English speaking customers.

The food was terrific. I tried Ostrich for the first time and it was outstanding. Like so many of the businesss we toured during this trip, the corporate Core Values (Integrity, Client-Focused, Excellence, Entrepreneurship, Partnerships) and Mission (To help learners succeed -by providing a valued choice for achieving lifelong learning and gainful employment; to help industries thrive- by providing valued supports for promoting manpower development) were on prominent display. 

We returned to Cyberport to visit a satellite campus of Hong Kong University where their executive education and executive MBA classes are hosted. These programs were launched in just April of 2009 and are “the most expensive in Asia” at $1Million HKD over the 3 year program. We heard a faculty presentation by Kevin Zhou about the Role of Guanxi versus Market Orientation in Chinese Business Success. Interestingly, as a Chinese company grew and aged, the impact of guanxi on company success decreased.

We also toured the main campus of HKU where their motto, Sapientia et Virtus or wisdom and virtue was everywhere. Our business student tour guides were from Eastern Europe and Africa. We spent a very long time at the lily pond with the Sun Yat-Sen statue (see e.g. this link).

We ended our day at Gateway Cuisine  feasting on a seafood dinner. We walked through the markets at Lei Yue Mun  looking at the myriad live fish and seafood. Our tour guide had pre-ordered for us so we did not select our own fish to be prepared but all of the restaurants here allow you to bring your own seafood to be cooked. This was an outstanding meal although I was somewhat relieved that it would be our last group meal and therefore the last meal where my food would be staring at me.

Hong Kong harbor at night was one of the most majestically beautiful places I have ever seen.

Days 11 & 12: Guangzhou to Hong Kong

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Days 4 & 5 are here. Lots of meetings with companies and other experts on Chinese business development.

Days 6 is here. Our journey to Hangzhou.

Days 7 & 8 are here. Hangzhou, Alibaba.com & Harsco Metal Company & travel to Guangzhou.

Days 9 & 10 are here. Guangzhou.

Day 11 (January 12)

We started the day with a visit to the Microwave Group at Midea  where they use two mottos: “my idea” or “it's your idea”. This is a 100% privately owned Chinese company (not state owned) which was founded in 1968 by a group of 23 men for about 5000 RMB. Their initial goals were modest (to make bottle caps) but Midea (formerly May Dick) has morphed into a multi-billion dollar company with 14 manufacturing bases, several key product divisions (AC & Refrigerator; Living Appliances; Mechanical & Electrical; Real Estate & Logistics), and approximately 100,000 employees.

One major division at Midea is their microwave division (part of Living Appliances; 11,000 employees) where they make microwaves for major brands such as Samsung, Cuisinart, GE, Emerson and many others. In 2009 alone they sold 21 million microwaves. We were shown a new promotional video for the microwave division before a Q&A session. While this video highlighted coming products it also described the business “swords” of “wisdom, science and heroic spirit” that allowed Midea to compete, grow and thrive in this highly competitive market. The ended the video with a quote “Gods help those who help themselves.”

We ended our visit with a tour on one of their assembly lines, a major product testing area, a nutritional cooking laboratory and a recipe testing area as well as a component manufacturing plant. It was an impressive operation. Each assembly line makes product for a different manufacturer with different quality requirements. Many of the employees who assemble the microwaves are migrant workers from rural regions in China. While compensation packages for executives at Midea have approached US levels, compensation for other workers are more on par with industry standards. Midea could afford to pay more, but this would create hardship for their competitors. Instead they provide additional worker training, improved safety measures in their factories, meals, dormitory housing, placing workers from the same regions (with the same dialects) on the same assembly lines and teams, etc. to improve the living standard and quality of life for their workers. Even with these incentives, with the coming Chinese New Year, they mentioned concerns about what percentage of workers would return from their homes after the new year.

The head of the Microwave Group told us that their strict quality control, significant investment in innovative R&D (leading to 500 patents), and development of the steam standard for microwave cooking has allowed Midea to become a leader both locally in China and around the world. Many new products are in development that I wish were available here, such as their steaming microwaves. Many of us were dismayed to learn that it may be 2 or 3 years before some of the new steaming microwaves will be available in the USA. We gladly offered to be product testers! Midea sells microwaves to 190 countries (mostly under other brand names) yet only 30% of their sales are exports. Midea is the 6th most valuable brand in China. I suspect this is comparable to Coke or Nike in the USA.

We asked about their long term foreign goals. Obviously they have high aspirations for their products. It's been challenging to enter the US under their own brand name (although this is a long term goal) and so for now are focusing on making products for other companies. One advantage to this approach is it has allowed them to product advances made by others that can be reverse engineered into their own products. They have also acquired rights to a unnamed (to us) US brand that might facilitate their penetration into North America. Given their 30% compounded annual growth rate from 2000 through 2009, I expect to see them succeed.

Because we spent more time than expected at Midea and later at lunch, our tour of the Shunde Administration Service Center  was extremely abbreviated. One county has assembled 80 of the various government offices that an entrepreneur might need to interact with to start a new business into a single magnificently beautiful new building. This region was apparently farm land about 10 years ago and is now a lush, well planned, urban center. One activity that our group routine participated in was the Chinese Massage, especially Chinese foot massages. On our last night in Guangzhou, several of us went to the local Chinese Medicine Center(they are generally open from 11AM to 6AM) for one last Chinese Foot Massage. They generally start by having you place your feet in very hot water while you are seated on a stool. Your masseuse/masseur will then massage your back, neck, head, arms and perhaps buttocks. I did not catch my masseur's name, but he gave me the single best massage of my life. I'd pulled something in my neck perhaps 6 months ago and have not had full range of motion since that time. At the end of 70 minutes for less than $15 US, I was pain free with full range of motion. And my feet felt great too. I made the mistake of trying the ginger wrap add-on to draw out impurities. They covered my calves in a thick paste of ground raw ginger and then wrapped my legs in very hot damp towels. I lasted at most 7 minutes before I thought my legs were going to spontaneously combust. My legs were bright red and radiated heat like sunburn for at least 3 hours. I did, however, feel terrific the next day.

Day 12 (January 13) We left the White Swan Hotel  early to begin our trek to Hong Kong, starting with a visit to Walmart in Shenzhen. This stop was requested by one of our participants and for the first time at one of our shopping adventures I think just about everyone wanted a few more minutes. This was a massive 2 story Walmart that had both similarities and differences to US stores. For example, you don't often see a live fish market in US stores.

I had developed a terrible cough in Guangzhou. It's a beautiful city but between the construction, pollution, pervasive smoking, and humidity, my allergies and congestion spread to my lungs. Walmart was my savior but not in the way I expected. I was hoping that Chinese Walmart would have a pharmacy area where I could find Afrin nasal spray (or equivalent) and perhaps some more benadryl. I did not find either but the girl at the pharmacy pantomimed a productive cough and handed me two boxes of over the counter (for China) medicine: one a chinese herb and one that was called mucosan (which based on the name made me hopeful that it would help). She also offered me some prescription drugs (I declined) and a nasal spray of Silver (Ag+) extract (I also declined). I started feeling better almost immediately. I googled the drugs several days later and learned that mucosan (which does not seem to be available in the US) is a terrific expectorant (great stuff). One of the components of the herbal preparation was ephedra (now banned in the USA). That's disappointing as it worked wonderfully and had the side benefit of making me feel very alert, and positively perky.

Shenzhen  was an incredible city. Over the last 30 years, it's grown from 20,000 people to approximately 8 million. It's home to a variety of tourist attractions such as Window of the World, Happy Valley,  and Splendid China Park.  From Walmart we journeyed to the Yantian International Container Terminal(YICT) in Shenzhen  which is one of the largest shipping ports in China. They began operations in just 1994 as a joint venture between the Hutchison Port Holdings(HPH)  and Shenzhen Yantian Port Group (YPG). YICT has many advantages including: (1) its location near the manufacturing hub in the Pearl River Delta; (2) its proximity to Hong Kong; (3) the depth of its water; and (4) the great road serving YICT. It takes 11 days for a container ship to travel from Shenzen to Los Angeles. Shipping is carefully controlled because while YICT is open 24 hours a day 365 days per year, US ports are generally open only Monday through Friday.

YICT directly employees 2,500 people but through subcontractors and various support industries may be indirectly responsible for more than 100,000 jobs in the region. The recent global economic downturn decreased their growth rate for exportation and resulted in a major surplus of empty containers being returned. Something like 500,000 containers were returned empty last year. More than 20 billion Hong Kong dollars have been invested over the last 15 years to develop and expand YICT. Recently they have also invested heavily in their IT infrastructure so that users can check the statusof their shipping container in real time on line. YICT also invests heavily in employee training to nurture talented employees. More recently they've embarked on a number of green initiatives that also result in significant cost savings such as replacing diesel power with electrical systems to decrease exhaust and carbon dioxide emissions.

After our tour of YICT we crossed the border by bus into Hong Kong. This required two checkpoints. To leave mainland China we needed to exit the bus, collect all of our bags and clear customs to leave China. We then re-boarded the bus, drove 100 meters, and repeated the process to enter Hong Kong.

Our final hotel was the Royal Pacific Hotel  in the Kowloon district of Hong Kong. These rooms were the tiniest by far on our trip and the hotel gym was the smallest and least equipped. Luckily the gym was open 24 hours so I used the facility at odd hours (e.g. 1 AM) to ensure that I could use the equipment I needed. At the other hotels there were 6 or 7 of us that routine used the gym between 6 and 7 AM. This would not have been possible at the Royal Pacific Hotel.

Days 9 & 10: Guangzhou

You can find pictures from my trip on Flickr.

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Days 4 & 5 are here. Lots of meetings with companies and other experts on Chinese business development.

Days 6 is here. Our journey to Hangzhou.

Days 7 & 8 are here. Hangzhou, Alibaba.com & Harsco Metal Company & travel to Guangzhou.

Day 9 (January 10)

On Sunday we played tourists again. A business school student led us around the new Guangzhou Higher Education Mega Center. Several years ago they decided to consolidate campuses from 10 universities onto a single campus (on a separate island), almost all for undergraduates. These universities still have other campuses throughout the Guangdong province. They built 300 buildings (including student housing) using something like 3000 construction crews in just 3 years. For the purpose of efficiency, electric, water, and internet were installed as shared services. The campus was lush and beautiful but few students were outside.

We toured the Sun Yat-sen University student library which was jammed packed with students. 

Later we toured the Chen Family Museum which is a major repository for Chinese folk art. Our group is definitely supporting the Chinese economy. Now number 2 in the world. Many have needed to buy additional luggage to hold all of their souvenirs.

Our hotel, the White Swan Hotel, is an interesting place. It's on Saiman island in Guangzhou where many of the embassies are located. This is a place many American couples come to adopt Chinese baby girls (and yes only girls). Several couples we met were adopting their second or third child. One girl told me on the elevator that they came here to get her a new sister and also a cell phone.

You never really know what you are going to see here. And obviously, the Chinese take security very seriously here. The amount of construction going on in Guangzhou in preparation for the 2010 Asian Games is simply incredible. For example, this was the view from our hotel room at the White Swan Hotel.

Everywhere buildings are covered with scaffolding for renovation. They are resurfacing and “capping” the buildings. New roofs are being installed everywhere in various colors except green. One of our tour guides told us that green roofs were unlucky and suggested that a husband or wife was being cuckolded so no one wants a green roof. Of course later in our trip he told many jokes that were sometimes lost in translation so I don't know if this was a pun or fact. The expansion of infrastructure for highways and rail lines continues at an amazing pace. Some people on our trip who had been in China 10 or 20 years ago say it is currently unrecognizable.

Day 10 (January 11)

We spent the morning at the main campus of Sun Yat-sen University which has 80,067 students on all of their campuses. The business school (with 6305 graduate and undergraduate students) was founded in 1985 and is already a leading institution in China. It's the #4 Chinese Business School, the #4 MBA program, and the #5 Executive MBA program. Back in the 1920s, Sun Yat-sen founded SYSU as well as the Huangpu Military Academy. The goal of the business school is to become the business version of “Huangpu Military Academy in the business community with a view to education of senior executives with international perspectives, high ethical morality and professional competence.”

This was a very formal visit. An Associate Dean of the Business School was our host. After a formal presentation on the school and an extended Q & A session we went to a campus coffee shop to meet and speak with many of their faculty members and department heads. They had reviewed our credentials and expertise prior to our arrival and so had us sit and meet with people with shared interests. Their coffee shop had a terrific lunch buffet which they shared with us. Impressively, their MBA program has a 98% placement rate with the average starting salary of $10,000 RMB per month (~USD $1500 per month). While this is not a great salary in the USA, it's terrific compared to some of the jobs we've observed on this trip. A variety of high tech jobs (biotech, IT) here seem to start at $4,000 RMB per month for college graduates. Salaries can be a bit misleading though. For example, we toured a manufacturing plant where the migrant workers were payed perhaps $500 RMB per month. However, they were also provided dormitory housing, health insurance, as well as lunch and dinner each day. The cost of living is much lower here so it's difficult to make comparisons to US salaries and even more difficult to factor in the value of these additional benefits.

Sun Yat-Sen University also just established a separate school for Entrepreneurship. The Netbook I'm traveling with does not have a DVD player but they made me DVD of their promotional video for this new program. I'm looking forward to viewing it when I get home. Of course it's in Mandarin so I'm going to need some help getting it translated.

In the afternoon we toured the Guangzhou Zhujiang Beer Company which markets its products as Pearl River beer. Interestingly, the CEO and essentially their COO (head of management department) were both women. Our group asked many questions about the role of women leaders and difficulties faced by women in such positions but as at other companies the women being asked always seem perplexed by these questions. It's interesting that a place, which so values male children, really does not seem to discriminate in any way against women in leadership positions. The beer company, which partners with InBev (a Belgium company), like so many other businesses we've toured, was massive. Production capacity for bottling was approximately 40,000 bottles per hour. Beer consumption in China is growing rapidly and this year the Chinese may consume as much beer as people in the USA, although they still have some catching up to do on a per capita basis.

The brewery was attached to a beer history museum and tasting area. Our group really enjoyed the Pearl River white beer as well as beer made from pineapple. While the majority of their customers are in Asia, they are rapidly expanding across the globe with their products.

Days 7 & 8: Hangzhou

You can find pictures from my trip on Flickr.

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Days 4 & 5 are here. Lots of meetings with companies and other experts on Chinese business development.

Days 6 is here. Our journey to Hangzhou.

Day 7  (January 8)

We started the day with a visit to Alibaba.com. This company was founded in 1999 in Jack Ma's apartment and now has 17,000 employees with offices across China as well as in London, California, Turkey and Southeast Asia. The company is listed on the Hong Kong Stock Exchange and at US $1.7 billion had one of the largest Internet IPOs since Google in 2004. The scale of this company is simply incredible; it's like Ebay for business to business (B2B) transactions, like Amazon for business to consumer (B2C) transactions, like paypal but with an escrow function, like Google for affiliate marketing, and they run China Yahoo! They are also expanding into many other areas.

Alibaba's goal is to enable the success of small and medium sized enterprises. Like in the USA, these smaller companies pay most of the tax and employee the majority of the people in China. Alibaba and its subsidiary companies help entrepreneurs and small businesses to establish and develop their e-business expertise. They provide extensive training to their members on how to reply to email, set up a website, etc. For now, all of their revenue is generated from membership fees and advertising. There are no costs to the users. Ebay had initially come to China but was largely nudged out by Taobao.com, a subsidiary of Alibaba.com by 2005. While Taobao is still privately held, in the first half of 2009, transaction volume reached US $11.8 billion serving 145 million registered users. Our tour guide suggested that Taobao alone was selling more than Amazon.com. They have also bundled in affiliate advertising and classified advertisements into their portfolio of offerings.

Several of us were interested in their Alipay.com platform (free to both buyer and seller). They hold the buyer's money in escrow until the product is received. At this time the buyer will release the money to seller. This decreases consumer risk and allows the seller to build trust and a good reputation in the online community. Since the Chinese people do not use credit or credit cards the way we do, this allows them to pay for items over the internet safely and with cash.

Many comparisons were made to Google on our tour. Like so many dot.com companies, they even had foozeball and pingpong tables in the break areas. The average employee age is only 26 years old. We toured their very colorful call center which had many decorations (cows, flowers, etc.) We learned that the one team had cows because this was their “cash cow” initially. Alibaba.com is considered a very desirable place to work with competitive salaries, lots of training and a much flatter corporate structure than traditional Chinese companies. We even joined them in their staff cafeteria for lunch.

In the afternoon we toured a joint venture between Harsco Metal (80%) & the Hangzhou Iron & Steel Group Company (20%)  This partnership is just one of many that Harsco has in China (see e.g. this news release).  This was an extremely formal meeting. We were greeted by many representatives from both companies, drank tea, heard formal presentations from company leaders and got safety training prior to touring two of their production facilities. Because Harso is a US company, many more regulations pertaining to worker and visitor safety were required. We geared up with neon vests, hard hats, ear plugs, safety googles, masks and gloves.

In one area, we watched the steel bars get turned into large reels of wire. The other area was their Superfine production plant. They grind steel production and mining manufacturing waste into an additive that can be added to cement. This additive causes sequestration of carbon dioxide from the air making it a very clean product. The cement takes slightly longer to cure with this additive but it's much better in the long term. Overall, the facilities at Harso were not as impressive (or large) as those at Baosteel, but they are very environmentally conscious in their practices.

Day 8 (January 9) 

I skipped the group tour of the historic MeiJiaWu tea village at Westlake in Hangzhou. People who went said it was terrific. I had a great workout, a leisurely breakfast and long walk around Westlake. It was beautiful but very foggy. Hangzhou is a definitely a tourist destination but mostly for Chinese from other regions and visitors from Japan.

 
In the afternoon we began our journey to Guangzhou. We flew out of Hangzhou airport and into Guangzhou. Like everywhere else we've been in China, the airports were spacious and modern. The flight was uneventful and on time. It was late evening when we arrived at our hotel, the White Swan Hotel, in Guangzhou. Everywhere along our drive there were buildings under construction. The 2010 Asian Games are coming here in November 2010 and major renovations are underway to beautify the city.

Day 6: Traveling to Hangzhou

You can find pictures from my trip on Flickr.

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Days 4 & 5 are here. Lots of meetings with companies and other experts on Chinese business development.

Day 6 (January 7)

Thursday was largely a travel and cultural experience day. We had about a 2 hour bus ride to Haining China Leather City. The Chinese know how to build shopping malls. Haining Leather City is massive with about 2000 leather companies. All of the stores were selling leather or fur items. In the USA, it seems that malls will sometimes restrict the types of stores that are near each other so that competitors are at other malls, not across the hall. In China, the competitors are all grouped together. While it was jam packed, there were very few non-Chinese tourists here. Many in our group stocked up on coats, gloves, shoes, slippers, hand bags and luggage. There were many products that were crafted to look like well known American or European brands. The etiquette in this mall was quite different than I'm accustomed to in the US. Here stores throw their trash into the hallways of the mall as there are people who go around to collect the bits of trash. So it can be pretty surprising when you are standing in the hallway waiting for someone and the storekeeper comes and sweeps or throws trash at your shoes. Similarly, spitting is very common and men would simply spit onto the hall floors. Smoking is also pervasive; it was fairly common for shopkeepers to be smoking while trying to make a sale to you.

I'm not much of a shopper so that best thing about this leg of the trip was Chen Ji,  our host, talking about his experiences as a young man during the Cultural Revolution. From ages 17 to 25, he was sent away from his parents (University professors who'd done translations for Americans) to live in the country to be reeducated. While the conditions sounded fairly brutal and primitive, he spent a lot of time talking about the benefits of this experience to him personally and professionally. He also shared how the village he lived in, and China as a whole, have evolved since he had this experience in the 1960s and 1970s.

From Leather City it was another 2 hour bus ride to Hangzhou. The landscape became much more rural. The buildings were shorter with cultivated land and some farms. In many areas, old buildings had been turned to rubble with tall office towers being constructed in the background. They are also in the process of constructing a high speed train rail line (159 km) from Shanghai to Hangzhou.  All along the way the cement pillars had already been established and many crews were working to add the rail connecting them. The goal is to have this new line finished by 2011.

Hangzhou is a very rich city with many entrepreneurs. They even market it as such. This picture was taken at a screen (with a repeating marketing video) near Westlake just across the street from our hotel.
Our hotel, the Sofitel, was in a very impressive neighborhood. There were BMW & Mini Cooper dealerships on the first floor of our hotel. On our drive over, we passed by dealerships for Bentley & Lamborghini. I did not expect to see these in China. There are many VWs and of course Buicks and Chevys, but in Hangzhou there are also many Audis, BMWs & Mercedes. Mostly the larger sedans as people who can afford such cars typically have drivers.

You never know what you'll see in China. We passed the following sign and message “Excellence Pursuer, Prevail Forever” as we went through the toll to enter the city.
Similar signs, with similar messages of optimism, perseverance and dominance are everywhere (and I'm only noticing the ones with English translations). I find myself wondering about the long term impact on the people being exposed to such messages daily and the lack of similar messaging in a meaningful way in the USA. Instead we now give trophies to youth for just showing up. Everyone is a winner. This concerned me before I came to China but I find my concern and worry about this American practice to grow more each day I am here. I'll write more about this in the coming days as I find myself wondering how we as a nation will remain competitive in the future.

Days 4 & 5: Shanghai

You can find pictures from my trip on Flickr.

Day 1 is here. The next two days were all about getting acclimated.

Days 2 & 3 are here. These days were pretty much spent as a tourist in Shanghai.

Day 4 (January 5)

The quality of the fitness center and breakfast buffet at Le Meridien Shanghai hotel should not be understated. I used the gym each day and the buffet had a terrific selection of foods from around the globe. Most mornings I had a traditional Asian breakfast of rice, fish, and fruit. Sushi, congee, normal American choices (pastries, pancakes, custom omelets, bacon, etc.), cheeses, cereals, and salads were also available.

Today we began the real content portion of our FDIB program. We started by meeting with Stephen Jacques, the Deputy Principal Commercial Officer of the US Commercial Service  which is somewhat like an FSO position but it is part of the Department of Commerce and not part of the State Department. He spoke candidly about his role trying to help US companies start businesses or branches of businesses in Shanghai and nearby areas. In 1990, Shanghai was first opened to foreigners and the economy is growing strongly. He shared both success and horror stories of companies that have located here. Most of the horror stories stemmed from the US company's lack of due diligence prior to entering China or after initiating contracts. We spent some time discussing “quality fade”  and some of the recent product safety issues like the melamine in the milk, lead paint in Mattel toys and the less than optimal practices of some prescription drug manufacturers (see e.g. this article). Stephen recommended that if your company was considering relocating to Shanghai that you start by exploring the resources available from the US Commercial Service (his organization) as well as the branch of the American Chamber of Commerce   located in Shanghai. He outlined several major challenges to establishing a business or branch of a business in Shanghai and other regions of China remain especially when compared to Hong Kong: (1) the RMB is still not fully convertible, (2) there can be a lack of clear Intellectual Property protection or enforcement and (3) there are regional variations in enforcement of certain laws. In comparison, Hong Kong has a long history of British Common Law, 100 years of Western (British) influence, and a more established financial system. In spite of this, he has observed that some companies moving to China for the first time are choosing Shanghai as their corporate headquarters.

We had a very different presentation from Kyle Sullivan, Manager, Business Advisory Services of the US China Business Council, a 200+ member non-profit NGO that was established in 1973.  Their role is to provide members business services, government advocacy and host educational programs and events. Their website has a number of reports and articles that highlight much of what we discussed with Kyle (US-China trade deficit, the volume of trade the US does with China, the growth and change in China over the last decade). Kyle was much more optimistic and positive about the opportunities available to businesses in China.

These meetings were followed by a group lunch at the Red Chicken Restaurant.  This trip was memorable for the roller skating waitresses and the non-Western toilets (see my Flickr pictures).

In the afternoon we drove to tour Baosteel. They are the largest steel company in China and the third largest (or most comprehensive) in the world – the grounds of the company are larger than Macau. An entire city has built up to support the steel production and processing facility. There was a university, high end shopping mall, and all of the normal city infrastructure. We toured one of their hot steel pressing plants seeing large sheets of hot steeling moving down conveyor belts getting pulled, thinned, narrowed as water was sprayed across it. At the end, big rolls of steel were being produced about every minute or two. If I understood our guide correctly, each roll has a value of approximately $15,000 US. Almost all of the iron ore is imported from other countries: Australia, Brazil, etc. They built an entire port and delivery system to transport the coal, iron ore and other materials needed to efficiently manufacture the steel. The steel is used almost exclusively here in China with a small percentage being sent to the pickiest international customers.

The infrastructure that has been built around Baosteel and in Shanghai is simply incredible. For example, 20 years ago the Pudong District, where the airport is located, was farm land. Now it is a massive metropolis with some of the tallest buildings and biggest highways in the world. All of them less than 20 years old. This is a country that builds for the future.

Day 5 (January 6)

We toured two additional major businesses today: Desano Pharmaceuticals  & GM Shanghai. 

Desano  is a large (5500 employees) pharmaceutical company founded in 1996 and located in the Zhangjiang Hi-Tech Park. They are primarily involved in the creation of generic and biosimilar drugs with an emphasis on anti-retroviral drugs (especially for HIV and Hepatitis) and anti-malarial drugs. The production capacity for some of their drugs or active ingredients was impressive and on the magnitude of 14,000 kg per year per drug. Desano Holding Company has several other subsidiaries in development with different foci: Cdymax (oncology & steroids), Hegno(vitamins & animal health ingredients), and Biomabs (monoclonal antibodies, biosimilars).

GM Shanghai  is a joint venture with SAIC (Shanghai Automotive Industry Corporation) producing Buick, Cadillac, and Chevy. Some models have been 100% designed and sourced here in China. Some of the new models, such as the Chevy Cruze , are currently available in China and will be coming to the USA in 2011. We were able to tour one of the GM Shanghai manufacturing plants. We saw the steel get converted to frame, and then get painted prior to final assembly. It looked like one new car rolled off the assembly line every 2-3 minutes. Even though they are producing about half a million vehicles each year in China, they cannot fully meet the current demand. Even in this economic downturn, sales have been strong. While we might hear that GM is struggling in the USA, in China, it's one of the largest and most profitable car manufacturers.

After several days of Shanghaiese cuisine, I was delighted that we dined at a Thai restaurant for dinner. I love Thai food. It was a very special restaurant with singing and dancing waiters and waitresses. They sometimes performed solo (e.g. they did a great rendition of Michael Jackson's beat it - complete with choreography) and sometimes invited restaurant patrons to dance with them. Our more extroverted group members enthusiastically joined in. If pictures or video (I know some were taken) come available I'll edit them in here.