SIB China: Goodbye

I’m writing this post from the airport trying to digest all the excitement, adventures, insights, and friendships developed during this trip. It’s difficult to put into words the feelings you go through when you are away from home for so long and you dive into an accelerated learning experience in a country that is so fascinating as China. I do have to say, it was totally worth it.
Looking back, I think China has great potential and looking at the business side makes you understand the excitement of its potential. China is doing a lot of good things but also has huge challenges ahead. From the second you land you can not only see the pollution but you can feel it. Business practices contradict so many things that we have learned in our western world. Human Rights are definitely an issue and as the country advances they will have to address these rights. As the only LGBT member of the group, I can say this is not the place where you will find equal opportunity. Westerners wanting to do business in China have to understand all of these issues and adapt their ways to fit better as they should not expect China to change (although I think some things will change).
In terms of friendship, this was a marvelous experience. I went to China not knowing most of the people and left with twenty one wonderful friendships. One of the things I will remember the most is that we were a YES group,  from trying any kind of food (including scorpions) to taking, what felt like, a pretty dangerous toboggan ride to get down from the Great Wall. Of course, there are other memorable moments including (in no particular order):

  • searching for a lost Yu
  • sitting in a government meeting in Xi’an not knowing what the heck was going on (we all had name plates and were arranged by some unknown sorting algorithm and negotiation style q&a)
  • rushing for food in between meetings without knowing what we were doing
  • the endless questions of Zhenyu (granted they were all great :))
  • KTV
  • eating very very strange foods
  •  our tour guides Arthur “the nice guy”, Tony “the noodle man” and Candy
  • Alex’s sarcasm
  • Jeff’s jumping up all around
  • the endless food at dinners
  • sharing the flu (everybody got sick at some point)
  • metro ride in a rainy day during rush hour
  • And many more…
    I hope to see my friends back again soon, as for China I have no idea when I can be back but for now I will treasure this experience.
    Cheers, Alvaro

SIB EWMBA: China – Shanghai, the beginning of the trip’s end

Shanghai, the ultra modern chinese city, gave us a very warm reception with clear sky and a full moon to die for. The contrast with Beijing and Xi’an is striking, this is definitively a city where a westerner would have an easier time living (I know I would :))

On our first day we had a very busy schedule, we went to Silicon Valley bank (US listed under stock ticker: SIVB) who is very excited as they starting full operations in August. We then drove across the city to meet Intel and understand all the strategy thinking they have to do in order to operate in China. After Intel, we rushed back to the city for a another great presentation by the GAP business leaders to understand their strategy on market penetration in China.

As we experience China one of the things that is extremely interesting its full of contradictions, as one of our guests pointed out. The moment you think you understand it, you are thrown a curve ball breaking your theory. But one thing is true, China’s 1 billion population has woken up from a very long cut-from-the-world sleep. If we think of China as a teenager you will find they are eager to find who they are, have super high energy, are willing to take risks and have big dreams of becoming number one in the world.

Food microblog: not exotic but delicious Xiao Long Baos

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SIB EWMBA: China, hello and goodbye Xi’an

The last three days have been pretty busy. We arrived to Xi’an after a short two hour flight. We were greeted by our cheerful guide Tony “The noodle man”. Our impression of the airport was that it looked really new and Tony confirmed that Xi’an’s new airport opened three weeks ago. On the ride to the hotel we saw some of the new building developments that are now considered “ghost” cities as are all empty. Apparently developers have been hesitant to lower prices, so instead they give your more room, for example buy a two bedroom condo and they give you a third room free. Developers also don’t feel very worried about the empty cities and to understand why this happens, we only need to look at the influx of people in the cities. Xi’an has 8 million people today, of which four are in the city and the rest in the farmland. By 2015, they expect the population to increase by 2 million people and they believe they can get their investment back.

On Sunday, we ventured to see the impressive ruins of the Terra Cotta warriors. The scale of the work done in there is impressive, even more knowing that it’s more than 2000 years old! The group was pretty tired by the end, especially after doing a massive search for one of our lost team members who will remain anonymous :p I was particularly tired, but the hour ride back to the city helped us regain some energy for the next two sights we saw.

The first was a Buddhist garden more than 1000 years old. It’s supposed to be the oldest garden in the world. In it, one can find the Small Pagoda (a 15 story high Buddhist library), a rose garden, a huge bell where you can buy your good fortune, but most of all you can find peace. From there, we ventured to the City Wall which was an extremely memorable experience as we decided to ride bikes on it. How can it get any cooler than riding bikes on top of a thousand year old wall!

In terms of the business visits, this was a very interesting experience and definitively very different than Beijing. We were greeted as an official delegation and we were all impressed by the cordiality. There were a couple of key things we took from it, first is that the government here has a full development plan and it’s extremely interested on getting new businesses. The buildings where they present you with the city’s plans are very professional and something that would even impress Walt Disney. In one presentation they had a huge screen on the wall (probably about 20m high) coordinated by 30 projector that projected on the floor. To me personally, it made me think how much of a difference that the government can make in helping businesses. It’s not about reducing or expanding but an attitude change.

New food micro blog: no new ingredients, but amazing food in the muslim street
Visits: Honeywell, Applied Materials, Gov officials in the High Tech Zone & Economic Development Park

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SIB:EWMBA china goodbye Beijing

This instance of the blog is one where everybody contributed.

Let’s talk a bit about the Chinese culture and misconceptions that we have learned. For the ones of us that have never been to China we have been enlightened on how ignorant we were about this culture. Coming from the US we all thought that China equaled cheap stuff, thiefs (ip), people are repressed and no one can talk about anything without getting in trouble. Also, we thought that our way is the way to do things and they should follow. Interestingly enough most of this is not black and white, China has a lot of innovation, the Internet has given the people a voice and now one can find very high quality items. One of the things I found extremely interesting is that you cannot see a lot of misery as in other countries. Now, all of this does not mean that there are no problems, of course ip protection is an issue, the government presence is felt everywhere and doing business is challenging.

In the past two days we went to the Forbidden City, this place is just amazing. The scale of the place and the thought that this was built for only one person is daunting. With 9999 rooms this is probably the largest house in the world.

After touring the Forbidden city we went to Baidu which was a great experience as it gave us a chance to compare with the other Internet companies we visited. The biggest difference we saw was that Baidu has been able to succeed in China with a very similar business model to Silicon Valley.

During the trip we kept hearing that KTV (video karaoke) is really big in China. Seven of us ventured to one and I have to say it was a great experience. I also realized that my karaoke skills are no better than that in the US. Thankfully we had a couple of great singers in the group.

For our last day in Beijing we travelled to the Great Wall of China. Arthur, our tour guide, told us there is a saying in China that until you climb the wall you are not a real man. After climbing it we realized why they say that, it was a pretty darn tough climb! Funny enough one of the most memorable events on the wall was going down. We took a very exciting toboggan where your life depended on a single break stick. For lunch we had what Chinese call farmer food. The food was really good, the main difference was that the dishes were a lot simpler.

Here are some insights from my fellow travel buddies:

When you only have 30 minutes to lunch in a mall it truly feels like the Amazing Race.

Relationship, the myth and the truth. Relationships have evolved more to I do you a favor you owe me a favor.

Interestingly enough for companies to be listed in China, regulations require 3 years of profitability. This is despite the fact that successful companies in US such as Amazon did not making profits for the first 10 yrs.

The importance of balancing localizing product and work environment, versus bringing in western work ethic (no hierarchy) keep companies attractive to users,employees and still be innovative.

The Chinese government recognizes that the Chinese people are climbing Maslow’s hierarchy, fulfilling basic needs first before they value the freedoms that we, Americans, believe they want. They all want a better quality of life, comparable to the American way of life first. Once they achieve their material goals, they will eventually value freedom of expression.

Top misconceptions: 1) China isn’t just stealing, they’re innovating. 2) GDP per capita isn’t important, but instead Chinese consumers buy products that give them status. 3) you can take what made you successful at home and succeed overseas, but localization is important in foreign markets. 4) issue with chinese censorship isn’t the great firewall, it’s local censorship.

The government focus is on the societal harmony. China has 6 million graduates per year so there is a need to keep the educated employed to avoid social unrest and, hence, focus on innovation in tech.

When doing tours and going through the croweded subway we need to stick together like sticky rice!

Guanxi is not anything mysterious in China, it is the same how you go golf with business partners. The only difference is that people do that at the dining table in China.

One way of looking at how Chinese think about products and business is with a quote from one of our speakers “I don’t care if you bring me a white cat or a black cat. If it catches the mouse than it is a good cat. “

The national bird of China is the crane.

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SIB:EWMBA China post 2

Wow, has it only been four days here? We’ve been so busy and had so many adventures in that it feels way longer and yet I would like it to be just the beginning, as it’s clear that we have just scratched the surface.

In the days since my last blog entry we have visited three other companies and a University. There is a trend emerging from all the companies we have visited, that one cannot do business in China without being able to localize the mentality and business practices. Many Western companies have failed here mostly because they are not able to do so. It’s also clear that the business opportunity here is immense, and capital is shifting from international to investments from within. To have an idea of why this is happening you only need to look at the rising individual wealth and investment opportunities. The government limits the areas in which you can invest so investing in local companies is becoming more attractive.

There are a couple other topic trends emerging, the first is that relationships (guanxi) are critical. Everybody we’ve met lives by it. Now, it’s not only about knowing someone but really understanding them and making  sure that you take the time to build trust. The second trend is the advice to do what you love and the money will follow; “find a place where you make a life and then a living”. And third, speaking with proverbs is pure awesomeness.

On Wednesday, we met with the local Haas alumni that were kind enough to share their experiences with us. And, the following day we had a similar opportunity to meet with local students from the Tsinghua university. Both of these experiences were extremely valuable as they provided us with individual perspectives on all types of subjects.

Last night, the group adventured to the “special” food alley way. We were reminded by our candid tour guide, Arthur, that the Chinese do not eat these exotic foods. Nevertheless, we found our way there by taking the most exciting subway ride all of us had. We got into the subway in pure rush hour. There were so many people there that there was no space for an extra pin. Once out we found the street to find live scorpions (small), huge scorpions, sea horses, frogs, sea stars, and the list goes on and on. And I have to say, we have a very brave group because most of us tried the small scorpion. Kenji and I ventured to try the big one which we have to say it was not a pleasant experience. The group also continued to master the skills of negotiation as for me I wouldn’t mind a few more days to practice.

We’re off to the Forbidden City! More later…

Company visits: Lenovo, Tencent, Tsingua University and China Fortune Capital
New ingredient micro blog: scorpion