Berkeley MOT China

China vs. India, revisited II

2006-01-30T20:00:00.000-08:00

Jeremy Siegel, a columnist for Yahoo! Finance, chimes in. See link.

China vs. India, revisited

2006-01-17T20:00:00.000-08:00

Nicholas Kristof of the New York Times captures the debate well:

The great race of the 21st century is under way between China and India to see which will be the leading power in the world in the year 2100.

President Bush's trip to India next month is important, for we in America must brace ourselves to see not only China looming in our rear-view mirror, but eventually India as well. India was the world's great disappointment of the 20th century, but now it's moving jerkily forward with economic reforms, reminding me of China around 1990.

One of India's (and China's) greatest strengths is its hunger for education. Most American newspapers lure readers with comics, and some British tabloids with photos of topless women, but a Calcutta daily newspaper is so shameless that it publishes a column on math equations. Imagine titillating readers with trigonometry!

I visited the ramshackle Hasi Khusi Kindergarten and Primary School in a poor area of Calcutta, where most of the pupils' parents are illiterate street vendors, rickshaw drivers or laborers. Out of an average family income of $23 a month, the parents pay a one-time fee of $13 for registration and then $2.30 a month.

"What they didn't get, their children must get," explained the principal, Sampa Sarkar. Even kindergartners study English, Bengali, math, art and music - and do 30 minutes of homework. Private schools like this one are booming all across the country.

With India's ever-deepening pool of English speakers, its outsourcing boom will continue. Your next employment contract may be prepared by an Indian law firm, your mutual fund advised by Indian analysts - and if you need elective surgery, you may get it at a luxurious Indian hospital that will let foreigners combine their medical care with a recuperative vacation in Agra or Goa.

India has a solid financial system, while China's banking system is a catastrophe. And India is in better shape demographically for long-term growth: China has already reaped most of the economic benefits of population control and is now rapidly aging, but India's population will be disproportionately working-age for many decades to come (a factor that strongly correlates with economic growth).

India's democracy, free press and civil society also provide a measure of political stability. Sure, India can erupt, as it did with the slaughter of Muslims in Gujarat in 2002. But the risks of social and political explosions in India are declining, while in China they may be rising.

China will probably manage its eventual transition to democracy with bearable turbulence, as Taiwan and South Korea did, but with China anything is conceivable, including a coup d'état, mass unrest or even civil war.

Yet if democracy is one of India's strengths, it's also a weakness. Prime Minister Manmohan Singh knows exactly what to do, and I've rarely met a leader more competent (or less charismatic). But his reforms are stalled or slowed in the Indian political labyrinth. India's basic problem is that its economic policy-making isn't nearly as shrewd, pro-growth or farsighted as China's.

That's a tragedy: we should all want India to demonstrate that democracy is an advantage. But Indian lawmakers aren't helping.

Foreigners are still blocked from directly investing in some sectors in India, like retailing. Privatization is lethargic. Food subsidies are soaring and are so inefficient that it costs 6.6 rupees to transfer 1 rupee's worth of food to the poor. Restrictive labor laws mean that companies hesitate to hire, and regulations tend to suffocate entrepreneurship.

The upshot is that India has enjoyed a boom that has added few jobs. Only about one million people work in technology, and manufacturing, which could absorb tens of millions of poor rural laborers, trails even Bangladesh. The losers are India's poor.

And while China has been exceptionally shrewd in upgrading its infrastructure, India has been pathetic. India's economic future is marred by its third-rate roads and ports.

India is also horrendously mismanaging its AIDS crisis; it may already have more H.I.V. cases than any country in the world. AIDS casts a cloud over this nation's entire future.

The bottom line is that the once-great nation of India is reawakening from several centuries of torpor, and facing less risk of a political cataclysm than China. India is poised to again be a great world power.

But over all, my bet is that China will still grow faster and win the race of the century. I'm going to tell my kids to keep studying Chinese, rather than switch to Hindi.

The End...

2006-01-14T06:00:00.000-08:00

... of our official trip.

An aside: the strangest sink ever

2006-01-14T05:00:00.000-08:00

The sink in one of Shanghai's trendy bars.

Shanghai New Source Real Estate

2006-01-13T23:00:00.000-08:00

After discussing the Shanghai real estate market with us, Mrs. Tang took us on a site visit of one of her company's complexes. She then invited us out for dinner where...

Wu laoshi (aka Jihong) returns to celebrate the end of our trip!

A wonderful feast.

A toast to the host!

Old friends closing out the night.

PayPal China

2006-01-12T20:00:00.000-08:00

Jeff Liao, Country Manager, James Zheng, COO/CFO, and us

We also met with Ying Wang, Chief Marketing Officer (not pictured)

Linktone Ltd.

2006-01-12T12:00:00.000-08:00

Xin Ye, CTO, and us

UC Berkeley Haas Alumni Dinner

2006-01-11T22:00:00.000-08:00

Beard Papas

2006-01-11T14:00:00.000-08:00

Japan's finest cream puff goodness, available not only in East Asia, but select US cities. Look out Krispy Kreme...

Shanghai bound

2006-01-11T11:00:00.000-08:00

Morning train to Shanghai. Most tried to sleep. Others had too much energy.

Recommendation: Nanjia's Kitchen (sp?)

2006-01-10T22:00:00.000-08:00

Nanjia's Kitchen. This place was a lucky find. Excellent, full meal in a great atmosphere. Cost per person: 15 kuai = $1.86. We loved it so much, we went back our second night and splurged: $2/person.

Blogcn.com

2006-01-10T21:45:00.000-08:00

Alibaba Technology Co.

2006-01-10T21:30:00.000-08:00

Trapp Lewis, Senior Director of International Business Develpment, with us

Sightseeing in Hangzhou

2006-01-09T22:20:00.000-08:00

Twice the tian.

The famous Hangzhou Dragon Well Green Tea, being dried.

This "ancient" pagoda, complete with escalator, may have only been built earlier this decade (to be fair, "rebuilt"), but it makes for good pictures.

Beggar's Chicken: the chicken which keeps on giving

2006-01-09T22:00:00.000-08:00

You can pick at this for hours and still find tasty morsels hidden in this dish.

To Hangzhou by train

2006-01-09T11:00:00.000-08:00

These trains were exceptionally nice. Everyone slept well on the overnight to Hangzhou.

A visit with the Vice-Governor of Tianjin

2006-01-08T16:00:00.000-08:00

Luo Jia Jun and us

China Unicom

2006-01-08T12:00:00.000-08:00

Day off... Tourists at last

2006-01-07T22:00:00.000-08:00

It may not be as multi-ethnic as our group, but I think this perfectly captures China's new direction (zoom in on the new book). Actually, perhaps it better captures the rest of the world fighting to get into China. Hmm...

Just in case you have a Starbucks craving while you're busy being a tourist, have no fear - there's one in the middle of the Forbidden City. Seriously.

Another recommendation. When in China, take full advantage of the massages. You should ask around to find legit places, but at around $10 for 90 minutes, you can't beat it. This place even gave us complementary food and drink.

Expat nightclub recommendation: Latinos

2006-01-07T01:00:00.000-08:00

I'll be the first to recommend checking out the hole-in-the-wall local joints to anyone visiting a new country - but if you need a change of nightlife scenery in Beijing, check out Latinos, a trendy salsa club. I know what you're thinking - Salsa... "Latinos"... in China... - but the live music was great and many of the patrons were excellent dancers, both expats and locals alike.
We were guided there by our Haas alum/CCTV producer friend.

SINA.com

2006-01-06T22:00:00.000-08:00

We spoke with Hurst Lin, then COO of SINA.com. In what was becoming a trend for the day, Hurst later announced he was leaving SINA for Doll Capital Management (effective March 31st, 2006) - he will also become a Director of SINA.com.

CCID Group

2006-01-06T21:00:00.000-08:00

Zhang Xu Ming, President of CCID Group, and us.

Four hours later, Mr. Zhang left CCID to become an administrator of Qingdao. This is a common occurance for top government officials - 5 year rotations through both state-owned enterprises and government administrative positions.

China Information World: one of CCID's many publications.

It was amazing - every floor had a welcome message to us, either on a printed sign or projected image. We felt very welcomed.

Cultural Research

2006-01-05T23:20:00.000-08:00

In any new cultural environment, it's important to sample the local cuisine:

Yes. Beijing (Peking) Duck flavored Lay's chips. (Hey, when I was in New Zealand, the flavor was mutton and mint. Actually, pretty tasty. FYI: This here Beijing Duck flavor was basically rebranded barbeque flavor.)

It's also important to experience the traditions of ethnic minorities, like the Uigurs.

Ah... snake lady. She charmed us all.

[As seen at 'A Fun Ti' restaurant. Very expensive by Chinese standards, but a lot of fun. Dinner with friends from Microsoft.]

WuMart Stores, Inc.

2006-01-05T23:00:00.000-08:00

Dr. Wenzhong Zhang, CEO, and us

WuMart Hypermart store visit

CapitolBio Corp.

2006-01-04T22:40:00.000-08:00

Tsinghua Science Park Venture Capital & Tsinghua Tongfang

2006-01-04T22:20:00.000-08:00

The Official Trip Begins in Beijing!

2006-01-04T22:00:00.000-08:00

Alright... maybe we'll start in the morning.

Tianjin Zhong-Huan Semiconductor Joint-Stock Co.

2006-01-03T22:00:00.000-08:00

Outside

Inside

Tianjin Samsung Telecom Technology Co.

2006-01-02T18:00:00.000-08:00

Panda! Panda! Panda!

2006-01-01T12:00:00.000-08:00

When in Chengdu, it's necessary to visit with the "National Treasure of China", the Giant Panda, living in the Chengdu Research Base of Giant Panda Breeding. These are cute, lazy bums. If you don't catch them during their morning breakfast, you'll miss them - they're asleep the rest of the day.

Sightseeing in Sichuan

2005-12-31T21:00:00.000-08:00

Sichuan Province has a number of incredible sites...

A beautiful ceiling design in the library of a large Bhudist temple in Chengdu.

The steps leading to one of the large Buddhas at Leshan.

A thousand hands of Buddha, at Leshan

One of many gorgeous scenes we passed racing down Mt. Emei Shan.

Gastronomic Research in Chengdu

2005-12-29T18:00:00.000-08:00

When in Rome...

Frog and a small river fish in hot pot. (David, Shusaku, and I converge on Chengdu.)

Merry Christmas!

2005-12-28T19:00:00.000-08:00

Yes, Christmas. With Santa. And the jingles. In China. Still going strong after 12/25.

Chongqing - Old meets new

2005-12-28T18:00:00.000-08:00

It's really fascinating to see the remains of an older system inside the new, modern Chongqing. Walking around today, we passed by the hip Jiefangbei and happened across a couple of small alleys with lots of small stalls selling to locals. On each side, though, are large skyscrapers.

Some people may now go to modern supermarkets, but there's still the older wet market - each stall is a different vendor.

And once you've made a purchase and need to get it back to your freshly constructed house or office in this hilly city, why not hire a bangbangjun?

These guys are all around, ready to carry very heavy boxes and other objects up the hills, balancing them on the ends of bamboo sticks.

Chongqing Jinou Science & Technology Development Co.

2005-12-27T21:00:00.000-08:00

Our first day here, we got in contact with Charles Jin, a Chinese entrepreneur who worked for a time in Silicon Valley at Microsoft. He came back to Chongqing to start up his own company, creating Bluetooth devices and solutions. He was kind enough to introduce us to one of his employees, Lizzie Chen (Chen Xing Xing), who took us out for a late lunch to a hot pot restaurant (dude, Chongqing hotpot is very, very spicy - Shusaku was in heaven - I ate... gingerly) , and later showed us around the center of town. We had a great conversation about the investment and development environment of western China, and her experiences in school and at her company.

Here we are in the center of town (Jiefangbei).

Hello from Chongqing, China!

2005-12-27T12:00:00.000-08:00

Now that I've had a moment to catch my breath... Hello from China!

I arrived in Shanghai from San Francisco just this past Monday night, met up with Shusaku at a hotel near the airport, then crashed. After only 2 hours of sleep Saturday night, and a fairly sleepless United Airlines flight (predictably uncomfortable), I was dead tired. We then woke up at 5:30am to catch a flight to Chongqing, where we've now been for a day.

Let me relate my impressions so far... China is great! 'much more advanced than I (admittedly) expected. I had frequently heard comparisons made between China and India in the past - how both are the up-and-coming economic and political super-powers in the world, each with a billion+ people moving forward by leaps and bounds.

Well, I went to India last year, and it was interesting to see where it was making progress and where it had a long way to go. I was impressed by the determination of many families to educate their children in the sciences and become successful - they have a number of excellent schools and very bright youth, and the IT sector is booming. On the other hand, India is very, very dirty, and has a fairly underdeveloped infrastructure - and that's what hits you first.

China, though - in my very brief time here so far - gives off a different impression: growth, everywhere. Shanghai's airport is big, clean, and very modern. The short trip I took on the highway from the airport to my hotel was fast, on a modern highway with modern cars, passing by modern billboards advertising modern electronic devices, with nicely manicured shrubs lining the sides of the road. I saw no litter or tobacco juice stains or people urinating nor animals wandering as I saw frequently in India. When our plane landed in Chongqing, everyone pulled out their PDA/cell phones and started chatting and tapping away. When we deplaned, I was also greated by a modern airport and a modern, clean airport shuttle, and decent infrastructure. Of course, I was also greeted by a very thick layer of fog/smog, an unfortunate byproduct of rapid development meeting a large population.

Now, granted, I haven't seen much of China yet, and I'm sure there are areas where it can improve, especially outside of major cities - but props to the government and its people for at least giving a great first impression. (Shusaku pointed out how in some places in the very modern airports, the construction materials and techniques were a little suspect. Kind of like Ikea - looks nice on the outside from a distance, but of questionable quality. I think this provides a useful counterpoint to the above accolades - a healthy sense of skepticism is important.)

MOT China Fellows Program 2005-2006

2005-12-25T18:00:00.000-08:00

This year's fellows will focus on two themes:

The Evolution of Innovation in China
Over the past decade, China has come to be known as “the manufacturer to the world” – the de facto source for inexpensive labor. However, the low cost competitive advantage will not remain significant forever, and there are other opportunities that China is poised to provide. Already, a few indigenous core technology companies are popping up amongst the sea of manufacturing and service oriented companies. Is this the start of a trend?

We will explore how China and the US compare in this innovation game. Among the questions we seek to answer:

How has the US maintained its leading position in creating and successfully launching new technologies, and how can China follow suit?
What barriers to innovation do Chinese entrepreneurs currently experience, and how do they see those barriers falling?
Where can foreign investments and MNCs’ ventures into China stimulate the process for mutual benefit?

We will consider management practices, methods in education, and government policies. During our trip to China, we will meet a broad spectrum of leaders involved in this issue, from universities, technology parks, and incubators, to venture capitol firms, large SOEs and MNCs, and government.

The Transformation of the Chinese Consumer
The Chinese consumer now has greater access to a wider range of products than ever before. Both foreign and Chinese companies have realized the importance of segmenting the consumer base beyond those who live in the largest cities. From Chinese manufacturer Haier Group to Nokia, companies are offering an array of products to serve the range of basic to more sophisticated needs of the Chinese people. In addition, it is now common for focus groups and surveys to be widely conducted across cities as well as in rural areas.

We will explore the transformation and evolution of the Chinese consumer’s purchasing behavior and how they are using technology such as Internet research, m-commerce and e-commerce to make purchasing decisions. We will juxtapose how American and Chinese companies research and segment customer markets and suggest ways in which Chinese companies can better understand the Chinese consumer. Ultimately, we believe that MNCs and Chinese companies can increase profitability through better understanding their relationships with consumers