Sunday, January 28, 2007

Cab Advertising

Yesterday I was in a hurry to head over to my aunt's house in meilin (about 10km northwest of me) to play tennis. So, instead of getting onto a bus that costs about 4 yuan ($.50), I choose the faster, taxi that costs about 35 yuan ($4.50) for the trip.

This taxi trip, however, was different from all the previous rides ive had before. When I entered the cab, I was overwelmed by a media/entertainment and advertising frenzy. They have started to install a 4" LCD tv monitor in the back of the passenger seat head rest with its own variable speaker system. How cool, The only place I have seen this is on MTV's Pimp My Ride. Shenzhen has just started to pimp their taxis. Let's analyze.
  • Profits for the taxi company would go up with the added revenue for advertising. This is actually surprising that taxis in other chinese cities, and even in cities all over the world have not added these on.
  • Taxi drivers will be annoyed as hell since they have to put up with the 3-looping commericals that dont stop.
  • Passengers could get entertainment while waiting in the frequent Shenzhen traffic jams.
  • Tourists could be given a lot of good information about what's going on in the city.
  • People who have motion sickness (like me) will have a harder time preventing nausea.

Keep an eye out for them.

Tuesday, January 23, 2007

Hunters & Gathers

Yesterday, I was talking to my grandfather on the phone. They have a "winter house" in Zhuhai, the sister city of Macao (like Shenzhen is the sister city of Hong Kong). They usually interchange living in Harbin (freezing cold in the winter but perfect in the summer) and Zhuhai (perfect in the winter and too hot and humid in the summer). We were talking about why he's been feeling lethargic lately.

Gramps: I have nothing to do here. I only tennis twice a week in the mornings (he's 80). Otherwise, I play some majong and that's about it. Life is pretty uneventful during retirement.
Me: Doesn't my grandma go out all the time. It seems like she's always hanging out in the malls. Why don't you go with her?
Gramps: Because she walks too slow. It takes her hours and hours to do anything. I get too bored when I'm there with her. Do you know why she's so slow?
Me: Please tell.
Gramps: It's because in the old days, men were hunters and women were gathers. Women would be working in the fields and had to pick which fruits were ripe and which were not. They had to choose. However, when we men were hunting, we just shot anything that came along. That's why I just go and buy what I need.
Me: I guess some things are the same no matter where your from.

Saturday, January 20, 2007

Chinese Small Business Taxation

For those of you who haven’t lived in the UWS of Manhattan or haven’t gone to school at Columbia, you probably don't know that much about Koronet's pizza.

Koronet's Pizza- between 110th and 11th on broadway is THE best pizza in nyc. TRUST ME. just go there. their pies are about 3.5' in diameter, and the slices are almost two feet long... fun! cheap! a definite neighborhood hangout if there ever was one.

This place is small, cozy and friendly. The Hispanic guys behind the counter are quick and efficient and after a couple of drinks themselves, they become very generous. The best part about Koronet’s (aka K-nets) is that during the weekend, it is open until 3am. During my college days, I definitely made many a trips there for a last minute pit-stop before going to bed after drunken night bar-hopping the Columbia neighborhood. In fact, the first night I spent at Columbia included drinks at the West End (RIP) and pizza at Koronet’s. That greasy pizza just hits the spot.

The Chinese version of Koronet’s pizza is the neighborhood sidewalk barbeque. These are small mom and pop operations on the side of the street where all they need is a makeshift grill, meat and veggies on a stick, and a few chairs and tables. No matter where you go in China, you’ll find these little operations EVERYWHERE.

Last night I was walking around with my cousin, Simon, just south of the Shanghai Hotel (上海宾馆) in Shenzhen. We had already been drinking for a while, but wanted to go buy some snacks for the night. After getting our assortment of chips, crackers, cherry tomatoes and tangerine oranges, we started walking back to the KTV room all our friends were at.

In the middle of our walk, Simon decided to stop at one of these little bbq places and get some chicken wings. While waiting for the thing to cook, we hung out and chatted. The husband/wife team operating the place were very nice people. They gave us chairs while we waited and chatted with us. Being interested in their little business, I asked them about how easy it was to make money. It turns out that the margins were decent 30% to 40% but most of the profit depended on the volume of sales. In a given weekend night, they could sell as much as 700 yuan worth of food (remember: each the individual bbq skewers cost between 2 and 5 yuan. That’s a pretty decent side business for migrant workers trying to make a buck or 2 at night.

Before we were done with the conversation, we discussed the costs of the coal, the veggies and meat, ect. The highest costs came from the meat they buy as well as their makeshift bbq grill. Each one of these stainless steel U-shapped sheets cost about 3 yuan each. However, they prepare a lot of them each night.

Without understanding the reasons behind that (I was a little tipsy), the husband, who was in charge of the grill quickly took the top grill piece of and placed it (with the meat) away from the grill. A split second later, a pickup truck/minivan with 3 guys quickly stopped right next to us. A person came quickly came out, went over to the makeshift grill and dumped the coals on the ground. In my confusion, I thought these people worked for the little business and were going to help them change their coal to a new batch. However, after the guy dumped the coal out, he went back into his car and drove off.

What just happened!?!?

“Why did a guy jump out and dump your coal on the ground?” I asked.

The husband/wife explained that those guys were cops who’s job was to enforce business permits. Since they did not have one and were doing their own thing on the street, they were something illegal. Who knows what kind of “cops” they were.>

Not completely understanding, I asked, “why didn't he just destroy your stand and throw your food on the ground?”

It turned out that these police never were violent, but only confiscated the different 3yuan makeshift grills. Without going into too much detail, the couple just continued saying how difficult it was to make money, while simultaneously placing the dumped coals back into the makeshift grill to finish our chicken order.

Before our food was done, the same truck made a U turn and came back in our direction. I could see it coming for a ways away and I became quite nervous for the couple. They don't make that much money in the business and have to constantly look over their back in search for police who could, at any time, screw them over.

After Simon’s chicken finished cooking, were continued walking back towards our private room singing KTV. Before we could walk too far, a different van pulled over. This time, the husband quickly ran over to his supply of grills to replace the one that was about to be confiscated. While stopped to watch from a distance, the husband quickly went back to his stand with his brand new grills before the police even left.

“What the hell is he doing,” I asked Simon. “Isn’t his new grill going to be taken away too?”

Before he could answer, the husband walked over to the police man who was confiscating his grill and GAVE him his new one!


While walking with Simon and talking about this, I finally understood what was going on:

  • The police officers could never arrest any of these people because there are just soo many of them. In the general area I was in, there were at least about 1000 different little bbq’s being run at that time of night. The jails can’t hold that many people.
  • It was not in the officer’s interest to tear up the stand. It’s his job to deter these kinds of business, but in actuality, these officers were probably from the countryside as well and knew how hard it was to earn money.
  • The business owners know that the officers have a certain “quota” for confiscated grills per night. Therefore if they just gave the officers the grill and extra ones, the officers would 1. leave them alone, 2. leave others alone and 3. not come back in a while. I kind of compare this to American State Troopers and their monthly “quota” for speeding tickets.
  • A specific system of conduct has been created for these interactions…a social contract, if you will, between the illegal businesses and the police.

A couple of hours after this event, I revisited it with Simon while we were playing pool. He added something very interesting to the situation.

It seems that after the teams of 3 would confiscate about 50 grills per night. Afterwards, they would SELL the grills back to the operators of these businesses the next day for 3yuan!

HAHA. How crazy is this? It kind of reminds me my senior year International Politics class when we analyzed the illicit economies in Kosovo in the late 1990s. (If you don't know, a black market was formed where one side was basically supplying the other side with weapons that was shooting back at them.)

I really think this event shows how business is done in China. Of course, it’s true that not all business leaders and government officials are corrupt, but from my experience, it seems semi accurate.

For any business to be able to operate properly, it needs

  • to find a good market (people wanting munchies after going out at night)
  • to make decent margins/profit
  • to work within the establish social standard of interaction between the government and the specific industry
  • to “pay off” the proper people, whether its for building permits or restaurant licenses (the 3 yuan grills) so that they don't bother you too much

Ultimately, its true that the officials always have the upper hand. In this story, they confiscated the grills and resold them back to the businesses, only to confiscate them later…a revolving cycle. The funny thing is that this governmental advantage is very much part of the Chinese tradition where the government will, do and should profit from any of its businesses making a profit. Think of it as a tax…

Friday, January 19, 2007

Weaponizing Space

So it begins… (finally)

The weaponizing of space has officially started.

As reported by CNN:

“A Chinese Feng Yun 1C (FY-1C) polar orbit weather satellite launched in 1999 was attacked by an asat (anti-satellite) system launched from or near the Xichang Space Center.”

The satellite was complete destroyed into “hundreds of pieces of debris” was in low earth orbit.

“Low Earth-orbit satellites have become indispensable for U.S. military communications, GPS navigation for smart bombs and troops, and for real-time surveillance. The Chinese test highlights the satellites' vulnerability.”

This development is very interesting in many different ways.

I have long said that weaponizing space will be the next great race. It is not only inevitable given that land, sea, and air are already weaponized, but it also is needed for future technological advancement, very similar to the atomic bomb and the iron clad. If the movie “Independence Day” actually happened, we should have stuff up there to shoot those bastards down.

  • American unilateralism backfires again: By changing its space policy by claming “a right to ‘freedom of action in space’ and says it will ‘deter others from either impeding those rights or developing capabilities intended to do so’” the US has given China the unbelievable open door into legitimizing its space weapons development. I guess its just another thing that has come back and bite the Bush Administration in its ass at the expense of the American people.
  • In the midst of the expanding global economic market in which China, Europe and the US are enjoying, there is still much tension and distrust in military matters and issues of national defense (offence). No matter how the economies are becoming more integrated and interdependent, nothing matters when national interest is at stake.
  • China has sent a message…and has showed their big balls while doing so. While spending less than 1/20 of the US defense budget, with this 1 successful attack on a satellite, China has successfully struck worry and even maybe fear in the heart of the US Defense community. China doesn't need comparable satellites that cost billions of dollars… it just needs missiles that can shoot down the billion dollar satellites that are only millions of dollars. Cost savings at its best…not to mention it’s making the front page of many of the world’s papers.
  • The democrats are pissed! I worked for Sherrold Brown in the 2004 election campaign in northeast Ohio to support John Kerry. Even though I know him personally and can say with all certainty that he is a great, honorable and capable American, the freshman Senator from Ohio is going to have a field day with this with support of the protectionist, pro-labor side of the Democratic Party. The democrats need to look strong to their constituents on national defense and this is the perfect forum for that. I wonder what bills or resolutions will be passed on this issue.

I can’t wait to see how this situation develops. There are a lot of things that could happen and change. However, my prediction is that other than lots of political posturing and media hype, as well as specials on the Chinese military capabilities on CNN, the economic relations for trade and investment will stay the same. Everything is too integrated to be hampered by a little missile. Just look at how the war between Hamas and Israel, earlier this year, affected the stock market. After the initial decline, the Dow went on steroids and reached an all time high. No missile is going to stop that.

Thursday, January 18, 2007

The Chinese Worker: Part 1

The Chinese Worker, Part I:

Guangdong province is the factory of the world. This is a easily proven statement. Something like 60% of the world’s underwear, 80% of the glass frames, 30% of the computer chips, electronics, ect. ect. ect. are made in this single southern province. I don't know how many toys are manufactured and made here, but I do work at a toy factory that employs more than 2000 workers. That may seem like a lot of workers but in actuality, my factory is quite average. There are much bigger ones that employ 20,000 to 50,000 and even 100,000 workers!!! That’s crazy. Combine that with the amount of factories in this vicinity (CONAIR and Privatex are right down the street from me) and you can have an idea of what’s going on here. The shear scale and scope of this operation is just tremendous.

My mom was here a couple of weeks ago to visit me. When she was here, I invited her over to the factory to check out what I’ve been doing. When I was touring the factory floor with her, showing her the different assembly lines and machine shops, she mentioned that someone should look into this more specifically… especially into the lives of the workers who make all of this possible. I agree. These migrant workers, who are from all parts of China, are the untold story of the factory of the world.

In my 3 months at the factory, I’ve had various social interactions with my coworkers. Of the 300 office “management” colleagues, I’ve hung out with about 50 of them so far. In two different occasions, I invited them out for drinks (to get them wasted at a bar) and dinner (to get them wasted, while eating food). From these interactions, I’ve observed a few things:

  1. Most of the workers who are employed in the companies and factories are from the countryside. Very few of them are from the cities.

This is an interesting revelation. There are many studies out there that state how most of the Chinese population is still in the countryside rather than cities (about a 35% to 65% ratio). I had never realized this fact before.

There is a definite hierarchy in the China between city people and rural people. The hierarchy is rather stupid considering it’s based upon the rural person’s lack of experience in the city. Ultimately, “country bumpkins” are discriminated against and looked upon by the city folk as ignorant and dumb.

  1. These workers take life as it comes and don't really expect anything. They rarely have future goals and aspirations.

In my conversations with my fellow colleagues, I have always asked “as a kid, what did you want to be when you grew up” to have a semi-comparison between Chinese and Western children (that I grew up with). The answers were very similar across the cultural divide. Doctors, sports stars, astronauts, teachers… everything was the same. However, when I asked them: “what do you want to be now, what do you want to do in the future,” the answers change dramatically. In the US, I believe people have a basic idea of what they’re doing. Maybe they like medical school and law school and business, but cant decide between them, but they definitely have future goals and aspirations that they have a desire to achieve. In China, this question has only been answered in 2 different ways among the people I work with:

“I don't know, I’ve never thought about it before.”


“I want to be my own boss.”

It is quite amazing that no one seems to have any desires, any plan, any agency to work and achieve for the future. Instead, they are only working for working’s sake. They make their money, hang out in 4 person dorm rooms and are perfectly content with life. The people who have thought about it don't know what they want to do, but do know that they like money and hope to make lots of it. Isn’t that amazing?

  1. The workers are good people and whole-heartedly appreciate anything other people give them.

All of the people I’ve interacted with, who are “lower” on the social scale and from the “countryside” have been all incredibly generous and have treated me wonderfully. They live in non-air conditioned dorm rooms with no hot water and 3 other people. The lighting is shabby and the floors are dirty. Nothing is ever given to them and only in a few instances are their interests “taken care of”.

Whenever I have visited a friend or had food with one of them, it seemed like none of that mattered. They opened up their rooms and generally offered to pay for the meals. It can be said that although they do not have that much money or the best apartment, they offer things that money can’t buy: their help, their time, their strength, their knowledge, and sometimes, even their money in a genuine caring manner that is incredibly endearing and good.

Wednesday, January 17, 2007

Shenzhen, here we go

Working in any company is an interesting experience. However, when it's a random toy company in the heart of Shenzhen’s Special Economic Zone miracle, it gives a unique frame of reference.

I have been fortunate enough to be given the unique opportunity to go directly from graduation to a position of influence and decision making. As the head of foreign communications and a manager in the R&D department, I have began to see, experience and to be apart of many interesting aspects of business, production, and the corporate lifestyle. Also, as a yuppie, living in the vibrant dong-men area of Shenzhen, I will learn and experience many of the social and cultural aspects of Chinese modern life that is unknown to me. Through my friends and relatives in around Shenzhen, I will be given many opportunities to interact with the local population as locals do.

It is my goal to document these situations. Not only will I document them, I will also attempt to analyze these experiences in the context of globalization, culture, society, the global economy and personal relations and interactions between people. Ultimately, I hope to bring a little more light to the world behind the great wall.