The Dinner – Part II – NCUSR Delegation

Well. I wake up in the morning (at 8:30 AM). I believe the delegate has already assembled at the lobby of hotel and heading to Suzhou. And me? The baby was like a alarm clock – he cried exactly at 1:00 AM, 2:00 AM, 3:00 AM, and I wake up to take care of him. Pretty tired today.

The NCUSR Delegation

This is the second time I met with Jan Berris from National Committee of US-China Relationships. I recorded our last gather on June 9, 2006 one year and two weeks ago (see? the benefit of having a blog).

I admire Jan a lot for continuously organizing delegates in U.S. from all fields, and all industry to visit China. According to the booklet about this visit, Jan organized 250 such visits since 1971, including the famous China Ping Pong Team’s visit to U.S. in 1972, which everyone knows a historical event on the history of China-US relationship. What I am also impressed so much is, she personally visited China for 90 times – I believe the data is out of date since she came to China recently these years also.

It is just like writing a blog – keep doing the same thing for a long enough time means something significant. If Jan is a blogger, she did it really well – 90 times of visit to the same country – the difference is, pay a visit is much more time-consuming than writing a blog.

I do agree with Jan that the only thing (well, maybe not the only, but at least very powerful thing) for people to understand a country is to have them visiting the country, experience it in a way that reflects the nature of the country, and have them talk with people inside the country.

This is many be the 5th time I talked about the bridge. Seriously, U.S. and China need many bridges to connect the two strong economic bodies and help to reduce the pain of culture and system conflicts. Jan is doing admirable job!

Wonderful Night with Mayors from U.S.

Please note that I archived this entry under “West Meets East” category.

I am just back from a wonderful night with some great persons from the delegation of National League of Cities/League of California Cities, and National Committee on United States-China Relations. I just used one not-so-accurate word to keep the title short.

To be more exact, I should not be so short about saying Mayors. There are mayors from Sacramento (Heather), Bluffton (Ted), Riverside (Ron) and Council members from San Diego (Jim), Madison (Cynthia), and executives or attorney from the National League of Cities, and League of California… Of cause I met with the great bridge between the two counties – Jan Berris, from National Committee on US-China Relationships… Oh. and we have Haisong who introduced me to the group.

I promise I will write about what we talked today, and the interesting topics from democracy to violence in online games, to legal systems, to culture differences… but not today. It is too late and I think I should go to bed to have my eyes rested. My eyes suffer a lot recently due to heavy usage to write computer programs with the dev team in my company. Considering how long the conversation was, and how long I may write, I hope I do it tomorrow.

P.S. I got permission to blog about the night from my friendly guests, and I will write more tomorrow.

P.S. The baby was still awake when I am back home at 11:30 PM. He wanted to sleep but couldn’t, so he seemed impatient and making little noises. I held him in my arms and wanted to calm him down. This is the 20th day since he was born, and for the second time, he reached out to get my glasses away with his tiny and soft hand – the second time in his life. I was amazed. Now he finally falls asleep as an angel. This is also the first night I am not with him since he was born. I hope I will be at his bed every night from now on, and see him growing and growing. I firmly believe every single day, he change a little bit – he is getting 50 g everyday in weight anyway – there must be some change.

Who is Chinabounder

From today, a new name appeared in my search engine referrer log: ChinaBounder. This seems to be a hot term on the Internet today. I didn’t take close look at what the blog is about. Very briefly, I know this is a misbehaved British person in Shanghai, and made people angry by showing off his sex experience with Shanghai girls. A professor in China called for a “Hunt for ChinaBounder” and the goal of the mission is to find out this guy and get him out of China.

Recently, how foreigners should behave in China is a raising issue. During my conversation with people coming to Shanghai from other countries, I found many of them are very nice, wise, smart, and respectful, but I did meet some guys who behaves really bad in the “new land” (in their term). ChinaBounder is an English teacher in Shanghai. The debate put the role of “Foreigners as a English Teacher in China” into the center of the controversy. I don’t want to comment specifically on the ChinaBounder’s issue before I really have time to read about it. But I believe it is a very meaningful subject to explorer later.

Related resources:

The Hunt for Chinabounder | Sinosplice: Life in China

Chinese Internet users hunt author of

ChinaBounder left two comments on my blog, and that is the reason I know people are searching for this keywords these days.

Dong Fang Ji Bai from KFC

KFC is more successful in China than McDonald’s. In my oppinion, it is because KFC is doing a much better job in localization.

KFC’s Local Brand: Dong Fang Ji Bai 东方既白

KFC’s parent company – Yum Group’s Asia headquarter is located in the Metro City. So many KFC’s experiment happens in the Metro Tower area.

Two years ago (April 27, 2005), they have ever tried “K-Cafe”, the KFC Cafe, and it didn’t work out, and they closed it the first and the only K-Cafe in Asia.

More than one year ago, they opened another store with a Chinese brand: Dong Fang Ji Bai, meaning “The East becomes Bright” or “East Dawning” in Chinese. It is a KFC style Chinese restaurant. The food they serve is completely Chinese style.

What is in the orange cup? It is not Coke, not Pepsi, it is Doujiang (Bean milk 豆浆)

The Chinese dishes in western food style.


1111 Zhaojiabang Road

It is at the opposite of the Metro Tower.

TianYao Qiao Road


|| [Metro Tower]

|| #########[Metro City]

|| [DFJB]

|| [Hotel]

============Zhao Jia Bang Road

Going out of #10 Exit of Metro #1 Xujiahui Station, and you can find it.

The Food

All the foods are Chinese food, and the process is the KFC process – you get your dishes when you order. The price is reasonable – very similar with KFC. It may works. They have the second store in Changli area in Pudong.

The World of Different Rules

The Story of the Mason

Three years ago, I re-modeled my apartment. I hired a mason, who helped me to install floor tiles and wall tiles in the kitchen.

The guy was a 40-year-old skillful mason. We couldn’t get along very well. He didn’t show any respect to me, was rude when talking with me. He did crazy things like laughing at me when I asked about the schedule, or using my room as it was his.

“How can you behave like this!” I didn’t understand at all. “How can someone in the service industry survive without knowing anything about ‘service’, and ‘respect’?” I complained to Wendy: “This guy knows nothing about how the world works”.

I tried to educate him about what is customer service. Obviously, the attempt failed miserably.

I didn’t want to continue to hire him, and he didn’t want to work for me. Finally, the guy who introduced him to me asked him to stay and suggested me not to change a mason in the middle of the work – for quality purpose.

The argument continued, until one day, I found the secret.

The Secret

I consulted with my friend. He suggested me that his behavior indicated one thing – “He needs some money”.

I talked with the mason the second day, and gave him 50 RMB. I said: “Thanks for the good work. Here is the ‘red bag'”.

He smiled.

After that day, he changed to another person – polite to me, worked harder, and seemed to be very considerate to me. The good relationship continued to the end of completion of the project.

His Rule or My Rule

This experience is still vivid in my mind after 3 years.

It was me who didn’t understand the rule – the mason’s rule. I adopted the mason’s rule and got what I wanted.

What I didn’t understand at the very beginning was, the mason had his rule, just as I had mine: “Pay me the extra money, and I work harder for you.” The rule was simple and straight forward. The challenge was, no one except my friend told me about the rule.

I Follow Your Rules, or You Follow Mine?

When there is a conflict, there is a choice. Choice is on both sides.

If I insist my rule (a mason should be good to his customer), I could go to B&Q, and pay 4 times higher than directly hiring him. This way, I feel good, but in terms of $$$, I lose.

At the same time, if the mason insists his rule, and doesn’t follow the customer’s rule, he remains a poor mason for ever.

I am still smarter than the mason, right? I got what I want with little money, but he gave up his future just for small money.

Rules in China

When foreign companies come to China, they find “unreasonable” local business partners or business practices.

If people in the foreign company think their supplier must follow their rule, they can find the suppliers, but with much higher price than needed, because suppliers who know the “international rules” are rare resources in current China. Many companies did choose this approach and suffered from high cost, and finally failed.

On the other side, if companies in China change themselves to follow the international rules, they are more competitive in international world.

Smart people make the right choice, and not-so-smart people complain about rules, or “lack of rules”.

Typical Dialog

Mr. Smith: “China does NOT have rules!”

Mr. Zhang: “China does NOT have rules that you can understand.”

Not to follow the written rules is a rule in China. Believe it or not.

That is the Reality

My observation is, China needs to change smartly to adopt widely accepted rules to be more competitive in the world economy. Local businesses that move faster than average get bigger benefit.

For companies coming to China, to wait for the change (this may takes decades) or to follow the local rules is a choice. Smarter guys make the right choice.

Which is the Right Rule

Controversial about which rules is the right rule will continue, and I expect it to continue for ever. The difference of rules is a universal matter.

  1. The rule of the older generation are different from the younger one.
  2. Men use the rule from Mars, and women use the rule from Venus.
  3. Every industry has its own rules.
  4. Human being has its rules, and the nature has its own…

The whole world is made up of smaller worlds running by different rules. There is not always be the right rule or the wrong rule.

It is all about the difference. In a modern word, it is called “diversity”.

“The Right to Refuse Service to Anyone”

Anyone could help me to understand this? I visited a restaurant in San Jose. At the counter, they have a poster at dominate location that says:

“We Reserve the Right to Refuse Service to Anyone”.

Here is the picture:

My question is, although it is the private property of the restaurant owner, does this violate the anti-discrimination law? Is it offensive to anyone? What are the cases that the owner refuse service to some one?

Don’t get me wrong. I am not assuming this is not correct. I just want to have better understanding how freedom works in U.S.

My top two observation during my last few trips in U.S. are:

1. Freedom is all about the right to say NO in one’s place.

2. Property is protected by walls, and in U.S. by laws.

I will talk about these two conclusions later. Anyone help me to understand this disclaimer? Obviously it is legal, and allowed, and this is not the first time I saw the sign. How come?

We Need a Bridge, Seriously

I ended my 6-day (150 hours) trip in United States of America.

During the trip, I had the opportunity to drive to many places in the Silicon Valley on Saturday, and had the honor to be invited to two typical American homes, and chatted with guys from different companies, include MBA class of Stanford University… We have the opportunity to talk on the difference between the two great countries: United States of America, and the People’s Republic of China.

The more I talked, the more I feel we need a bridge between the two countries, seriously. Not one bridge, but thousands of bridges that connects the two country and help to promote mutual understanding.

People in U.S. Don’t Understand China

It is clear that people in U.S. are interested in China, but based on the limited information on newspapers, TV, and even on Internet, it is very hard for them to get a full understanding of China. People often get confused about what is happening in China (while they are very curious).

On the facts part about China, what people in U.S. get is typically correct. The problem happens in the reasoning logic.

For example, people understand the terms of law in China, but are lack of information about how laws are enforced in China. So they interpreted in U.S. way.

People may see something terrible, but may ignore the fact of improvement (or becoming worst) over the last few decades.

People may see the fact some business fails in China, but don’t know the deeper reason and propose remedy that follows the same way that caused the failure.

I don’t think it is any one’s fault. It is just the nature of how the world works.

What we need is a bridge, to connect people and to promote understanding. I was continuously encourage by how people in America are willing to learn more about China and surprised by how little or how inaccurate people’s knowledge about China. Again, it is just the nature.

One typical example is the controversial about Google’s censorship in China. It is a long story and I promise I will cover this topic later in another entry.

People in China Needs to Understand American As Well

I think generally, people in China know U.S. better than people in U.S. know about China. The hollywood movies and Internet familiarize Chinese people of what is happening in America. However, movies and news reports are always misleading. For example, the frequently appeared street gun fighting in movies is not common in U.S, and Kongfu fighting is as rare in China.

I am among the group of people who know U.S. better than average. But I was often surprised by how people live with laws, and freedom in U.S. I understand it better only after I personally visit U.S. for many times, and had the chance to see the society in a closer way (for example, going into families). I saw with my own eyes that many assumption I made before the visit was wrong.

For example, many people in China don’t understand why freedom is so importance to the people in the States, and don’t understand why American are so “simple-minded” when dealing with laws.

These are long stories again, and I will cover in details in future blogs.

Building the Bridge

I repeat it for the third time: We need the bridge, seriously.

I am so happy I stumbled into the area by starting this blog. It may become one of the bridges connecting the two worlds, two cultures and the two people.

The advantage is, I have both Chinese and English blogs. I hope I can use English blog to talk more about China, like Hukou system and use the Chinese blog to describe about what I saw in U.S. (for example, how on earth does freedom work in U.S.). The effort is limited, but anyway, this must start from some where.

P.S. Thanks again for everyone who hosted me at home and for meal. To protect their privacy, I am not going to list their names. But my appreciation for letting me to understand more of the country is never less.

P.S. 2: I created the category named “West Meets the East” and put all related article on this topic under this category. At the time of completing this entry, there are already 14 articles in it. I hope there will be more.

It is not Impossible, But Difficult

I enjoyed chatting with George from New York the other day in my garden. We discussed about doing business in China.

George said, when he consulted his friends about anything in China, he often got the answer: “It is not impossible, but difficult”.

“It is really frustrating to me”, George said, “basically they didn’t answer my question at all.” George added, “What on earth does it mean by Not impossible but Difficult?”

That is the Way it Works

I laughed out load. I rest assured George that it is very common answer, and is absolutely the right answer to many questions he asked. If he asks me a lot of questions, I would answer the same way, “it is not impossible, but difficult”. Let me tell you why.

In China, the culture is not based on philosophy, reasoning or mathematics.

Mathematics and most science has predictable and certain answers.

If you ask

What is the result of 1+1?

The answer is 2.

But human being is not that predictable.

If you ask

What happens if I show this picture to this person?

The human interaction is not that predicable.

He may smile;

he may turn away;

he may be angry;

he may also run into tears.

It depends on all kinds of factor including what the picture is about, what the relationship you have with the person, what time do you show the picture in his life. When there are too many factors, we call it something like an ART.

U.S. rules works more like mathmatics; China rules more works like human being.

In U.S., rules works like science and mathematics. If you ask:

“Can I do this?”

Typically, you get a Yes or No answer.

In China, it’s more like an art, instead of an equation.

“Can I do this?”

“Well. It depends.

Typically, you CANNOT do that.

BUT if you know the person who is in charge of this, MAYBE you can do that.

BUT if it is the time that the law is enforced these days, even your friend MAY NOT be able to help you these days.

BUT if you wait for several days, your friends can help you with that….

The scenario is on show everyday.

Here are some examples.


The new law system in China is just developed within 50 years, with 20 years of interruption (when basically no law at all). So it is not mature, and people didn’t get used to laws and regulations yet.

For example, if you ask “Can foreign Internet companies run business in China?” Well. It is a tough question. If you expect YES or NO answer, it is your problem that you don’t under the country at all.

The right answer MAY be “NO”, because there are regulations and laws explicitly says foreign Internet companies cannot operate in China.

But don’t stop here. Otherwise, you are assuming no one in China ever realized the existence of Microsoft, Yahoo!, Google, or any NASDAQ listed Chinese Internet company, like Sina, Sohu…

It seems the answer is “YES” despite of the laws, but you cannot say that. It is very complicated to hand the situation in China, that requires skills not available from someone who never lived in China.

It is Not Impossible, But it’s Difficult

You will experience these type of answer all the way.

Something I feel very strange with I discuss topics with my foreign friends is, they try to think stuff in a logic way.

People keeps asking questions to me. It sounds like “What is the difference between the two markets, China and U.S.?” “Why does people do this?” “Did they do this because of this…?”

Well. For me, I tried very hard to answer the questions, but to be honest, I felt I am not telling the truth. It is not accurate to answer with either “YES”, or “NO”. There are not directly reasoning between cause and results. For me, I do be able to answer many questions in the western thinking model, but many times, if I do care to help people to under the local market, I would stop and say: “The reasoning and logic people use here is different from the one you use.” “Let’s start again by analyzes it in this way….”

That is the reflection of Asian culture “Harmony” + “Ambiguity”

When the West Meets the East

When the West culture meets the East in Shanghai, there are a lot of conflict.

I see people from the States come to China to make money. They just come and go. Some makes huge money, and some just keep losing money. The difference relies on the way people think. I am quite amazed to see how difference the gap is.

It does not work that well to believe rules, science, mathematics, western logic and all these stuff to be the ONLY and Universal way. There are countries in Asia that human factors play more important rules. It does hurt efficiency, I agree, but it is the reason why the culture lasted thousands of years – no single way to run smoothly in this country, but no single force can destroy this country. It’s like how the nature works.

If you don’t understand what “It is not impossible, but it is difficult” means, you don’t really understand China yet.

P.S. I have a special category called westmeetseast in this blog, and put all observations about this culture conflicts under this category. As you may noticed, I finally decided to remove Google Adsense from my individual entry page, and use the precious place to place a navigational box of “related entries”. Hope you will find the small box helpful to find related articles.

Business of Zhending Chicken – Part II

I talked about Zhending Chicken and their strange policies days before. After that, there is another similiar discussion on airlines. These discussion reveals the difference in culture and business conduct in China and U.S (representative of western or international world). There are other articles on this topics: Diversity, Consistency, and Efficiency, Diversity, Consistency, and Efficiency – Part II. I am afraid this will be the sixth article along the row on this topic.

Zhending Chicken Continued

On the previous article, I outlined many strange conduct of Zhending Chicken. I don’t think it is 100% wrong, or right.

People Takes People-People Relationship Seriously

I am reading some China ancient books, like confusious, and Laos, Daos. They all focus much more about the relationship between people – how you should be havior to archive the harmony of the relationship (instead of efficiency).

In Kening’s comment, I, for the first time, learnt the term: Judeo-Christian. During my search for this term, I was let to this page:

But what does “Judeo-Christian” mean? We need to know. Along with the belief in liberty — as opposed to, for example, the European belief in equality, the Muslim belief in theocracy, and the Eastern belief in social conformity — Judeo-Christian values are what distinguish America from all other countries. That is why American coins feature these two messages: “In God we trust” and “Liberty.”

With the common believe of God (the system we are in), people in U.S. are more willing to follow the rule instead of people. However, in China, at least from what I see, people tend to follow other people’s instruction, stead of laws. Why a policeman at the cross-street can greatly help to enforce the traffic law is an example of “people-people relationship” or “people-system relationship”.

Customer’s Need: Price or Quality?

I totally agree that quality, consistency, and value are very important for business, but businessman need to have much better insight into the Chinese market before using exactly the same belief in China.

For example, Price really rules in China. See the long line in the shopping mall. When people said they are willing to pay more for something if the quality is better, they are not typical customers. Whenever people are willing to pay additional money for better quality, that means it is just a very small portion of spending in their life. What if it is the major one? I still remember the time when I was in university. To go to KFC is very luxurious for the 20 RMB meal. We only plan once or twice in the whole term to go there. In this sitution, Zhending Chicken obviously offers much more than KFC. We always need to distinguish the so-called “middle-class” (i don’t like this term), and the majority of consumers in China.

China is changing

China is changing, and consumer’s behavior is changing (in a very slow fashion).

Culture Differences – Part II

I went to a church in Pudong with in-laws this Sunday morning. I am not a Christian, but I found the religion service beneficial for me. It helped me to understand the life better, and also on cultural difference.

The pastor talked about difference between Chinese and Israel cultural. As put it by the minister of Israel, culture in Israel is all around the relationship between people and the God; in China, it is all about the relationship among people.

This echos the observation of “Deal-oriented v.s. Relationship-oriented” difference. It is too complicated a topic to discuss in blog, so let me spend time in ancient Chinese books like Tao (Dao).

Mashup Pictures

On March 17, there is an invitation only event called “Mashup China” in Nanjing (again, Mao, Isaac, 6e, Owen, me, etc) along with the Search Engine Strategy summit there. To prepare for the format of the small 7-person (may be 17?) event, I am looking at the pictures of Mashup Camp.

Image from Flickr, in courtesy of chachra

From the question, my question is, why there are so many guys from Microsoft attending the event? I saw the familiar black Microsoft ribbon.

The other event appeared in the Idea Factory China mail list is Carson Workshop

Cultural Differences Between China and America

The comment of mcgjcn mentioned a name R. R. Gesteland. I research the name in Google and found some interesting resources on cultural differences (like this, and this). In all the works, Norihiko Shimizu’s paper “Today’s Taboos may be gone tomorrow“, Tokyo Business, February 1995, p.51. is a very frequently quoted materials in all MBA courses on International Marketing, and Cross-culture business. It was comparasion between Japan and American. I found many of the points also applies to China.

Cultural Difference between Japanese and American Individual



A Culture of self-expression


A Culture of Self restrain

Clear expression of Joy and sorrow Ambiguous of joy and sorrow
Unequivocal expression of “Yes/No”. Equivocal expression of “Yes/No”.

Strong Personality Weak Personality
Priority of self-interest Priority of harmony with others

Source: Norihiko Shimizu’s paper “Today’s Taboos may be gone tomorrow“, Tokyo Business, February 1995, p.51.

Cultural Differences between Japanese and American Business

American Business Japanese Business
Game concept: Business is a game in pursuit of profits under the rules of laws and contracts Mutual trust-oriented business: business is based on trusting relationship among people rather than the rules of game
Efficiency-oriented and approximate accuracy simplicity, clarity, and quickness Highly precision-oriented and perfectionism-high dependency on human awareness
Easy layoffs, dismissals of employees, and selling of businesses Job security
Low mutual dependence between employers and employees High mutual dependence between employers and employees
Heavy dependence on machinery and technology, vs. Light dependence on human resources Heavy dependence on human resources

This comparision answered many of my questions on effeciency v.s. diversity, why the way of doing business is so different cross the two continents.

P.S. Isaac shared Flickr photos with tag Einstein with Idea Factory China. It is so interesting – I am amazed more that how people follows the rule so well.

Diversity, Consistency, and Efficiency – Part II

After the entry Diversity, Consistency, and Efficiency, many readers posted so great comments that I cannot help quoting it. (Quoting in full text is rare on this blog.)

Roger Chan commented:

Good points in your article above. Some other important factors I’d mention, to nurture the growth of companies like Google in Chinese cities:

1. Transparency, transparency, transparency. You *absolutely must* have transparency for a company to be successful and to attract wide-scale investment, that is, transparency in the management, transparency in the financial records, transparency in both successes and errors. Without transparency, investors will not trust your company and it will fail. This is why there must be intolerance for corruption in the Chinese companies and the government– this damages transparency and leads to mistrust by investors.

2. Innovation by the company with R&D. Research and development, translated into products, is the cornerstone of success in places like the USA’s Silicon Valley. This applies both to new products, as well as to Chinese cultural exports (such as films)– to reach the “big leagues,” you have to innovate your own products and come up with your own ideas, not copy those of others. As all the cheap knock-offs of Hollywood films in Hong Kong and Shanghai indicate, many smart Chinese people still spend too much time copying the ideas and culture of others, rather than innovating their own.

3. A more solid banking sector and stock market. Many other people have talked about this, but China’s banking sector does need reforms, and banks have to be smarter about their loans and avoid bad loans.

4. More partnerships between universities and companies to do the most innovative scientific and engineering work. I know that Chinese companies and university laboratories can be incredibly innovative– I’ve read Chinese scientific journals before (I can read the characters), and the work in there is as good or better than universities in the US. You need to increase the volume and output of this scientific work and increase the collaboration of university and corporate laboratories. To do this, increase both the number of trained scientists and the specialized journals in which they publish their ideas. Then encourage them to work together.

5. When you start up new scientific and engineering journals in China, the journals should be *in Chinese*, your native language. I heard an idea a while ago to start up a bunch of English-language journals in China, but this would be a total waste of time– it’s very difficult to write a scientific paper in a foreign tongue even if you’re very good at it, and 10 times faster to write a paper in your native language. For example, the Japanese started up a bunch of English-language journals in the early 1990s, but the editors and paper authors wound up wasting years of delay *even after the labs had finished their projects*, trying to nitpick the English composition while their competitors just published in their native Japanese (with the best papers being translated into other languages anyway). Your scientists would be wasting precious time mastering the fine points of English composition when they should be focusing on publishing their ideas in their native language. You have that luxury since you have 1.4 billion people and soon the most scientists and engineers in the world. It may be useful to have online versions of the journals in both the Chinese characters and in Romanized pinyin, which can help many non-Chinese read them; it’s easy to interconvert between them, a simple computer program can convert the characters to pinyin. (Millions of non-Chinese, including Europeans and Americans, can read pinyin well even as they’re still learning the characters.) As a bonus, millions of Japanese, Korean, Vietnamese, Singaporean, and even some Western and other scientists would soon publish their papers in the Chinese journals (since the Chinese characters and the language are extensively studied throughout East Asia). But the journals should be in Chinese to encourage efficient publication and communication. I emphasize this especially.

6. Strengthen your patents, trademarks, and copyrights system. This is very important– the countries with the most innovation and most successful companies (like Google) also have the most robust patent and trademarks systems, since this ensures that people are rewarded *financially* for their ideas. You have to have that sort of economic incentive to convince people to put in the hard work that creates a company like Google and makes it an economic enterprise. You have to reward them and also protect them from others who would just copy their ideas. China’s intellectual property laws are still too weak– you need to make them stronger.

7. Finally, stop buying up so many US Treasury bills, and instead focus all your surplus dollars from trade into development and infrastructure at home. Companies like Google, Hewlett-Packard and Dell require reliable roads and telephone lines to do business, which requires infrastructure investment by the local, state and federal governments in the USA. You in China earn many dollars from your trade with the US, but then you waste your profits by buying up US T-bills, on which you lose money as the US dollar falls. So, you are essentially giving away your hard labor and your products to the US for free! You should instead use your profits from exports to the US, to build up your own infrastructure and focus on development in China. This will make you a mature economy and able to start companies like Google, Microsoft and IBM. As long as you continue to send Chinese export profits (and savings) to the US in those T-bill purchases, China will continue to be a third-world country (and the US will try to impose tariffs on you as well). Instead, use your profits to build yourselves up at home. In the process, just allow the RMB currency to rise, *gradually*. A rapid renminbi rise would be dangerous, as it was for the yen in Japan in 1990. Instead, just gradually reduce your US T-bill purchases and diversify into buying Euros and yen so that the RMB gradually rises, then use your excess dollars (and other export currency profits) to invest in infrastructure at home and purchase of strategic resources. To have big and successful companies, you need to be focus more of your export profits at home.

mcgjcn added:

R. R. Gesteland said “One group of the world’s societies worships the clock and venerates their Filofaxes. The other group is more relaxed about time and scheduling, focusing instead on the people around them.”

U.S. as Rigid Time society value schedule and discipline… may lack of flexibility.

China as Fluid Time society value flexibility… may lack of efficiency/consistency.

Globalization is causing culture mix, but it takes time.

Just continue to add some points (again, random thoughts)

  • Consistency produces efficiency; efficiency produces quality. As Martin put it, quality, by nature, is consistency.
  • I cannot comment on whether efficiency (or in other word, lower cost) and quality (in other word, consistency) are two major competitive factors on global market. It is especially so with WTO (World Trade Organization), and free trading zones. We don’t know whether cost/quality combination will still work after 100 years, but at least, it is the current worldwide standard.
  • Whether the standard of the world will change from value/money/business driven to other fact driven? I have no idea and don’t see any sign yet.
  • China’s diversity has deep historical and culture reasons. Just as Gesteland put it, focusing on people instead of worship time/schedule is key China culture element.
  • Efficiency of thinking can be archived by mathematics. The quantitative thinking in western culture tend to convert all problems to number problems (from modern economics, to chemical, to (the extreme extend) computer). It is another effort to drive the common essence among different stuff, while in China, people keeps diversity as it is.
  • China will change, but very slowly. The world is also changing
  • Dennis Waitley said: “The only danger raised with adversity, mistaking the mistakes to yourself.” It is very true in current China – the economy problems do not 100% due to the current system/culture. Don’t mistake the mistakes.
  • Many business in China are flexible, but not consistent.
  • In the Business of Zhending Chicken case, it full respect diversity of users, but lose efficiency.
  • To survive in China, people from foreign countries need to put aside of criticism options, and learn the philosophy used here. To keep one’s finger crossed and pray for the change of China is not realised in short time
  • People power is one of the key weapon to fight against diversity.
  • By default, employees are different with each other. They are diversified and can handle diversified questions they face everyday. People don’t like well trained customer service representatives with U.S. standard, because lack of the human element. “Human element” is diversity (in particular, pleasant surprises). It is removed for consistency. However, this is exactly what customers in China expect – they always expect pleasant exceptions (the enemy of consistency).
  • Diversity is the reason of low efficiency.
  • People need to accept lower efficiency does not mean failure in China. Highest efficiency does not always mean success, especially in those industries requiring people-to-people interaction.
  • According to the book The Botany of Desire, a plant’s-eye view of the world, diversity is grand rule of the nature. Human’s effort to drive consistency will eventually fail (after several centuries). Single-type tomato in South Ireland has called half of the popular starving to death when one type of plant cannot resist a new virus. It may be true for huge international companies.
  • Conflict of culture (flexibility v.s. consistency, strategy v.s. ad-hoc, people v.s. system) will be ultimate question in the process of any internationalisation process.

Feel free to post the content or link to other forums, since I am really interested in this topic. Deep dig into the topic is worthwhile, since it helps to answer lots of questions people in both continents have.

Diversity, Consistency, and Efficiency

I have some point-of-views for diversity, consistency, efficiency, and the difference between China and U.S. It is just some random thought, without any systematic thinking…

  • When a company just went IPO (like Google), internationalization is the only way to keep up with the fast pace of Wall Street.
  • Internationalization is hard. It is harder than one can imagine.
  • In U.S., consistency across all the states, and across all the business, and people have been established. Consistency is the key to efficiency. Only when people can handle all the request in the same or very similar way, they can be efficient.
  • China is a diversified country. Difference between geographic locations, businesses is obvious.
  • No surprise when we see several people can run a huge business, because the shipping, payment, law, etc are pretty consistent. In China, the challenge is, there are so many banks that have different interfaces. The same bank has different system in each region. The business process varies greatly from company to company… etc.
  • I won’t say consistency is the only right way. Diversity is the essential part of the nature. The nature is diversity. Although the human effort to force consistency in recent several hundreds year worked, it may eventually fail.
  • Currently, at least in this century, the economy is designed that only the country with highest efficiency win. That is the biggest challenge for the process of globalization.
  • With WTO, China is unconvertible moving to be part of the global world. So it is critical for people in China to start to learn the international rules.
  • For people doing business in China, it is also critical to understand the difference, get insight about the culture. It does not make sense to complain the rule is not the same as other regions. This rule has been there for thousands of years.

Related: 20 Years of Professional Managers in China

Business of Zhending Chicken

This noon, we went to our favorite restaurant Zhengding Chicken (振鼎鸡) for lunch. It is famous for its chicken. It is a successful business, just like KFC for fried chicken.

Zhending Chicken meets the need of local market precisely, because people are very sensitive about cost and the value. They have some rules in their restaurant I feel strange.

Close The Business at Rush Hours

I remember the store at Tianlin closes at 6:00 PM. Many times we rushed to the store only to find out the store is closed. A server stands at the door and politely tell us: All chicken sold out.

It is the very few restaurant that I would keep my finger crossed on the way to there, hoping I can get permission to enter the store, for chickens.

Cold Coke or Not?

The price for cold coke and normal temperature coke are different. You have to pay 0.2 RMB more for the coke to be cold.

People clearly see the value that the coke is sold at a very low margin, that they cannot aford to pay for the refragerator to cold it.

Take out or sit in

The price for the chicken are cheaper if you take out. It is quite reasonable in Shanghai.

Estimated Price Only

When you order, say, one chicken, the server will charge you based on their estimation. The precise amount will come only after they choosed the chicken, weight it and calculated based on the weight.

Devils are in Details

Everything in Zhending Chicken pointed to the cost-saving direction. It is very cheap to have lunch in their restaurants compared to many local chicken stores. This is quite unique. I believe to do business in China, when we study MBA programs, we need to learn more from the practical local restaurants on how they control their cost and strike for operational excellency.

P.S. Long Google Search String

Today, I found someone reached my website using this long Google search string. I Fule U.

(intitle:blog | inurl:blog) unix | linux system=administrator | systems=administrator | system=administration | systems=administration network | networking | network=engineer -~jobs -~papers

20 Years of Professional Managers in China

The latest issue of Shanghai Managers featured “20 Years of Professional Managers” in Shanghai. The topic is good since the phenomenon of “20 year professional managers” is unique in China, and it involves many people just around us. The people and their stories told in the report are just like “manager sitting in the next cubicle” (just created this phase after “girl living next door”).

Professional Manager is Still Rare in China

The growth of the country’s economy benefits greatly from the abundance of labor (which many countries are lack of), and the huge talent pool, but it is not that abundant when we talk abou experienced professional managers.

If you look at the heads of multinational companies, you will find many of them are managers from Taiwan, Hong Kong or Singapore, for example, the management team in Microsoft, in Motorola, and eBay (as far as I know). There are not so many native professional managers if you consider the big base.

How come?

20 Years!

As stated in one article in this issue of Shanghai Managers, FESCO (Foreign Enterprise Services Co.) started the history of foreign enterprises in Shanghai.

This is very true.

When I worked for Microsoft, as all my colleagues in Shanghai, I was actually an employee of FESCO and dispatched to Microsoft. It is same for me now.

FESCO was setup just to help foreign companies to overcome the human resources barrier and many difficulties old system presented to a modern company. It was the only organization to select, hire, train and dispatch employees to the multinational companies. They did much more than that, like keeping the Dangan for its employees. Now it is not the only one, but still the most important one.

FESCO was setup in the year 1984 – 22 years ago. The first round of foreign companies entered China around that year. I remember HP, as one of the first big foreign enterprises in Shanghai, just celebrated their 20 years in China last year. I believe most foreign companies have presence in China (or re-entered China market) within the last 20 years.

The report described how difficult it was to find someone who can speak a foreign language, (more importantly) is willing to give up their state-owned enterprise secured job and join a foreign company. These employees are under management of a special police station. The station has two chief to ensure safety. The FESCO provide months of training to the employees to teach them how to use Fax machine and how to dress up.

It is unbelievable in nowadays, but it is so reasonable in 1984 when China just opened up after closed for half centaury. Thanks for the editors to refresh that piece of history for us.

Now, many of the employees in 1980’s grew up and become experienced managers. But the problem is, there are not enough senior people there, and those experienced managers are not senior enough to manage multi-national businesses.

Talents from Hong Kong, Taiwan and Singapore

The last Hong Kong trip impressed me a lot. I saw how experienced managers in the International economy world are. As the generation of senior managers in China grew up to learn English (Oral English), learn those terms so new to them, and how to work in an intentional company, managers in other Chinese worlds like TW, HK and SG moved forward in faster pace. When first round of employees just became managers, people in other regions may have started to be exposed to international business that span across Asia region or global geography.

When businesses grow big enough and the management team is looking for a senior executive, when thousands of CEO positions are opened to the market, there are just not enough local executives filling into the pool. It is nature that candidates from Taiwan, Hong Kong and Singapore stand out.

They have both insight about Chinese culture and business rules, and international experiences. They are fluent in both Chinese and English. They are in their 40’s to 60’s with enough experiences. The conclusion is, they are the ideal candidates.

How about the Next 20 Years?

20 Years Anniversary of Professional Manager in Shanghai (and in China) is a great milestone. I personally feel very excited to see how big the change it is in the last 20 years. When China moves to the next decades or two, when younger professional managers like my peers in Microsoft and eBay grow more senior and become more experienced, I believe there will be enough candidates to compete in the global market as a business leader.

The market needs more people who can speak both languages – not only Chinese and English, but also the local business language and the international business language. China can be a stronger country with all these small contribution of new generation of stronger professional managers.

Two Side of the World – Where Should I Stay?

How interesting that on one hand, so many people are looking for services and goods and on the other hand, many services and merchants are spending too much but still cannot find customers.

I often receive emails to help on recommend good tour guide, hotel to stay, or places to buy stuff. Many times, I have to reply that I don’t have much more information than the information already on the Internet, or on my blog. :-)

I believe the difference is, there is not a strong TRUST between two side. Even though thousands of ads are running every day to tell you what is the best hotel, people (you and me) will still ask the question to our friends: What do you recommend to stay? We do NOT trust advertisement as much as friends. If people cannot find some friends who know the area – if no one from around has visited the place, they turn to someone they think a little bit more trustworthy, say, Jian Shuo in Shanghai for Shanghai information.

So to run a successful advertisement business, the key opporunity is, to build trust between the two sides…

Different Views on Typhoon

Just get back from a business trip. Sorry that I was not able to catch up the blog and didn’t find a chance to post an OOB – it is among the longest break in blogging recently.

When I am on the bus back from Hangzhou to Shanghai, I finally find several minutes to use my Dopod 515 to check out the comments on my site and noticed annick and Angela were pretty upset about my comment to Typhoon: “But it’s first time that I learnt that somebody quote Typhoon as pleasant experience.” and “It is really disappointed to know you enjoy the Typhoon so much”. I also noticed a lot of my frequent reader made comments after it.

I can understand Annick and Angela’s upset. Typhoon is typically very bad thing. But meanwhile, several books, including the Art of Travel, taught me how importantly to see the world in different views – switching between point of views makes people happier. Sometimes, lack of local information blocks understanding and cause misunderstanding.

Many People in Shanghai Loves Typhoon

Many things have many different aspects. When we read about Typhoon, we only read about the area hit by typhoon. So the general image for typhoon is bad, very bad – killing people and destroy houses. But Shanghai is in a lucky position that every time typhoon hits, it will only pass Shanghai on the sea instead of landing on Shanghai. Since there will be several typhoon every summer, we will see typhoon as part of the summer season, just like the two continuous raining months.

When I first arrived in Shanghai in 1995, people told me typhoon is coming. I was so frightened, and soon got very confused that many people are so happy about it. I asked why and people explained the story 10 years ago to me, a new comer: Typhoon mainly brings cold air without causing too much trouble every year. When people feel too hot, and when Typhoon alarm comes, they know it will cooler soon.

Typhoon Does Cause Too Much Trouble For ME

Life is fill of happiness and sadness. Our attitude toward it does not prevent Typhoon from coming but greatly affects how happy we are. When Typhoon hit Zhejiang province, it caused a lot of trouble, but people their just take it as the routine – every year, just like people use Air conditioning to fight against summer and heater for winter, they have their own way to protect their home. Typhoon also went the long way to Beijing, which is 1400 km north, and it only turned out to be small rain. The same typhoon is not the same for lives in different cities. It means different even in people in the same city.

Just like someone pointed my nose and say: Hey, why not distroy your car? I ask why? They say: It killed millions of people world wide already. I said: But it is not THIS car. The typhoon in this city that I described is not the typhoon which killed people.

My Life, My City

As part of the mission of this blog, I just want to describe honestly about my life, and small things around me. The smallest part matters most for future visitors and people who are thinking about relocation to Shanghai. Most of the things I am even not aware of. Just like I completely forget the surprise I experienced 10 years ago when I first hear someone say they love typhoon, I didn’t expect this sentence will cause argument. But this is the most interesting thing.

When people talk about something, they tend to image it in the way they are used to, and from an angle from where they stand. However, the real situation may be different people who live with it. For example, people in America get upset about a lot of things they heard about China, for example, the one child policy, thinking “OMG. How can it be possible?” Actually, the real fact is different. Only by living on this land for some time and also taking history into account can we make a better judgement. That is a strong reason that keeps me writing for this blog – smallest thing like attitude toward typhoon can help a lot for cross-country understanding. Understanding is the most critical to world peace, as I always believe in.

P.S. Carroll, so nice to hear from you again. I want to add additional thank you for hosting me in SFO when I visited. I always think I should put it again somewhere on my blog again since it was so nice experience for me.

Do You Have a Calendar?

Last time when I chatted with my friends from U.S (I think it was on the top of the Jin Mao tower), he introduced a new tool that helps people to use calendar more effectively. He asked me whether it will be a good application for the Chinese market. My short answer was no. My longer answer was “I am not sure how many people in China really use calendar.”

People in China don’t use Calendars as Often

It is a major difference between people in China and in U.S. I don’t know why people in U.S. use calendar, either software or paper based, in daily life.

If I hadn’t worked in a foreign company, I would NOT have used calendar either.

Is it because of the educational system that uses the task based time management theory, or because the schedule of each person depends on the other so much? My friends in have schedules, and I have schedules, but the schedule is flexible enough and not so many and people don’t need something to help remember them.

Restaurants don’t require reservation (Shanghai is the exception). A waiting line is always a good solution.

This is an interesting difference.

Updated July 26, 2007

Recently, I think the question should be asked as “Why people in U.S. use calendars, instead of why people in China don’t use them”.

When I look at the time management theory symbolized by a clock, I found it is not a tradition in western countries either before 1800. The industrial revolution in England forced farmers to go to factories, and for the first time in history, people need precious clock, so the work can be synchronized, and people can depend on the work of each other.

In the recent 50 years, to-to-list as a time management tool get popular in U.S, and task based management, prioritizing, and the concept of goal based time management as a theory get so popular in U.S., that people all rely on calendars and task list to do their work. The current generation of American (and maybe their parent generation) grew up and learn the time management when they are young.

That MAY answer the question of why people (almost everyone) in U.S uses a calendar.

In China, on the contrary, didn’t go through the industrialization revolution yet, and people still keep the pace of the previous hundreds of generations, and time is not that important in the current society.

So, people in China don’t use calendar.

T.I.C Moments

My foreign friends told me that when something goes wrong (sometimes because of culture shock and sometimes not), they will say: T.I.C.

Later, I found out T.I.C means: This is China! They even have the expression of the “T.I.C moment” to describe the time they want to say T.I.C.

It is the most interesting term I heard today. T.I.C! Sometimes it gives me some negative feeling because it may be perceived as “Don’t complain. You should have your expectation here. This is China.”. But generally, it is still a positive thinking if you say it with the meaning that “When in Rome, Do as the Romans. Accept the difference and find some workaround…”. The topic of T.I.C. can be interesting and helpful for both people in China and foreigners to understand the differences. It is the same for me because I also have many T.I.A. (This is America) moments in U.S. and T.I.X (X may be the city I am visiting). It is normal and it is the reason we travel. Maybe when we travel, we are intentionally seeking for T.I.X moments in the destination.

T.I.C! The three letters may mean their understanding of the differences between countries/regions. It may serve as relief of anger or shock that they have nothing to do for it; or it simply means their acceptance of the reality that it is their homeland and something may not work as expected.

I believe there may be many T.I.C moments for foreigners who just arrived in China. What is your T.I.C. moment? Do you want to share some? It helps me to see the same city in a different angal I have today.

Top Two Differences in China

Tip and Tax are among the top differences between China and most western countries.

Before someone steps out of the door of his/she own country, he/she cannot really understand how different people do the same thing. I try to list top differences for foreign visitors to China. Check if you have known this before you pack your package to China.

  • No tip required. You don’t need to pay tip for any service – in restaurants, hotels, taxi… The salary for hotel or restaurant servers is fixed and there is almost no relationship between their performance and their income. In most of the business, accepting tips are strictly forbidden to “protect the right of consumers”. Personally, I believe tip is a good way to encourage good service.
  • Tax is included in all price. If you see something labeled 300 RMB, you pay 300 RMB. All the tax is included in the listed price. This makes the goods in China even cheaper compared to other places. For large goods, like house or business to business transactions, tax are calculated separately.