China

Urbanization Express

Last Day in Shanghai

How time flies! The four days trip in Shanghai has come to an end without giving us the chance to feel it. Four days is a very short period of time in our lives, but the things that had happened in these four days have probably changed some people’s perspective about China.

Shanghai can be considered as a melting pot of both domestic and international cultures. As one of the most properous cities in the world, Shagnhai is showing the world a modernized Chinese city, welcoming everybody to do business in Shanghai.

Through visiting the companies, we were able to see and feel what kind of obstacle they were facing in terms of local regulations, and competitions; and at the same time, thebenefits, such as the massive developing market, the steaily these companies were enjoying from operating in China were presented.

Everybody enjoyed their time in Shanghai, they saw the business firms, and at the same time, they played well into the tourist role. They walked on the Shanghai Bund at night to see the beautiful lights of the city; they taste the famous Nanxiang little steamed buns to feel the food culture of Shanghai; they bravely taste the frogs and spicy food.

Food and shopping – there are more than 30,000 restaurant constitutes Chinese style, western style, leisure style, and fast-food chains. The commercial centers are concentrated on Nanjin Road, Huaihai Road, Zhengda Square, Ganghui Square and more. Famous brands had all found their home here in Shanghai.

We are looking forward to see Qingdao and Beijing in the upcoming trip!

Shanghai’s Past, Present, and Future

What do you get when you mix centuries-old history with cutting-edge architecture and plans for a green future? Shanghai – the dynamic megacity in which we have spent the last three days.  Sadly, today was our last day in Shanghai, and we spent the morning at the Urban Planning Museum in the People’s Square.

The museum showcases a scaled model of the entire cityscape that revealed the massive size of the city housing 20 million people.  However, before the unique buildings like the Pearl and Financial Tower were built, Shanghai was a center of cultural history that brought about early Chinese architecture in the Yu Yuan Garden and the later emergence of British and French concessions.  The modern age has transformed Shanghai into a hotspot for impressive skyscrapers and financial centers.  Like other cities in China and across the world, the city has a plan for a green future.  The pollution of China has forced Shanghai to innovate and design future structures and parks that will utilize less energy and promote a healthier environment.

Shanghai does a great job of incorporating style and function into their city design.  It seems impossible to effectively design a city with such a wide span of people, but Shanghai does it in a way that blends old and new, rich and poor.  The modernity of Pudong with its wide streets for flashy Bentleys winds into the working-class society with narrow lanes for rickety scooters.  The rich and the poor live together amidst thousands of restaurants, malls, parks, and functioning traffic lights – all working in tandem to run one of the largest cities in the world.

Shanghai might have grown too big for its own good. The most interesting part of the Urban Planning Museum was the scene outside in the People’s Square.  As we left the museum, hundreds of elderly Chinese men and women gathered in protest against the government.  I guess we have to take it literally that the People’s Square is full of people!  When these men and women were younger, the government forced them to move west to modernize the rural villages and cities.  Now they are old and want to return to Shanghai, but the housing is too sparse and too expensive for them to return.  The hand of the government in Shanghai forced these citizens out of their homes, and the recent boom of the city has eliminated an affordable option for them to return.  Perhaps Shanghai has outgrown its past and only welcomes those who will fuel its economic wealth and power?  One thing is for sure – Shanghai has a bright future filled with growth and sustainable infrastructure.  What I hope is that the city can also remember its past, and find a place to live for its oldest generation of citizens.

Reflections at 35,000 feet

At the moment, I am sitting on board China Eastern Airlines flying from Shanghai to Qingdao. As a former employee of the airline industry and a frequent traveler, it is interesting to reflect on the experiences here in China versus the United States.

As we had started the day at the Shanghai Urban Planning Exhibition, we had already seen the development of transportation expansion in Shanghai. So it was no surprise that the Shanghai Hongqiao Airport was new, immaculate, and very open, designed in much the same fashion as the Shanghai Pudong Airport to which we first arrived. The advertising within the airport was larger and bolder than most places in the US, although that space was still bought from advertising conglomerate JCDecaux, as is the case at home. Check-in kiosks abounded, not that I used one because as a group of 30, we checked in with an agent at the groups desk. Interestingly, we had a misunderstanding as to the complimentary weight allowed for checked luggage; here weight was given as a total rather than on a per bag basis. Anther difference was that absolutely no liquids are permitted in a carry-on, not even in the 3oz container in a 1-quart plastic bag enforced in the US, Canada and Europe. The misunderstanding in particular reiterates the importance of flexibility in international travel; sometimes you just must roll with the punches. It also reinforces the point that different airlines, countries and cabins of service will almost always have different requirements and due diligence is critical if one wants to avoid excess fees. This statement seems to be the catch-all that could be applied to most any aspect of business or life. The theme of attention to detailed rules and due diligence for success has been repeated at throughout this program:

• recently at UPS in Atlanta
• at organizations in China (namely Citi and US Commercial Service so far)
• in our legal environment course

After check-in, we proceeded through security, which was very similar to US security, complete with x-ray scanners and metal detectors. We were departing from Gate 53, which was a non-ramp, remote boarding process that involved a bus ride and steps to the plane. This is interesting as my understanding is that this is a relatively new airport offering additional capacity to Shanghai; often times the remote boarding is used only in space-constrained airports that already have traffic at capacity levels such as London Heathrow. If Shanghai’s secondary airport is indeed already experiencing these issues, the continued population and economic growth will certainly increase the need for additional capacity. This issue can be two-sided; on one hand it presents a problem of high traffic, but on the other it presents opportunities of further building and development that can create new jobs and wealth in the area.

For my final observations on the actual China Eastern experience, I toast their strong customer service. The plane itself (Airbus 320) seemed moderately new and in good condition. The seats were comfortable, reclining back farther and offering more leg room than many US domestic coach seats. We were offered both a tasty ham and cheese sandwich and a beverage on board, and the flight attendants were very attentive. Directions and information were given in both Mandarin and English in the airport and on board. This was actually a bit of a surprise for me as it was a China domestic flight. This international touch shows a sense of welcoming to Western business coming to China, both as tourists and business-people. This open reception is yet another recurring theme that has emerged on this trip.

Feeding the Monster – Citibank and US Commercial Service

Within today’s presentations, we got different perspectives on the outlook of China’s future as a world economic power, and the role that American business can and will play in this future.  To a large degree, this role seems to be determined by the rise of China’s middle class and its effects on the culture and consumerism.  On our first company visit of the day, CitiBank China, we were addressed by the CFO of China operations.  He covered a lot of material regarding the role of international banks like Citi and HSBC in the evolving banking environment in China, which is still highly restricted by the central government.  The extent to which such banks are able to compete with Chinese banks illustrated the challenges of foreign financial organizations operating within the nation’s borders.  For example, the normally core activities of investment banking and credit card services for Citi Group are not yet permitted by foreign banks in China.  Although the CFO seemed optimistic of their ability to participate in such activities in the near future, through joint-ventures and deregulation, it was evident that none of these opportunities are yet guaranteed.  In fact, it seemed quite clear that the limited operations and influence of banks such as Citi in China would not be acceptable for the company’s “hurdle-rate” of service offerings were they not the fastest growing market of consumerism, and thus financial services, in the world.  So, will the central government allow them to be competitive with the national banks in the near future?  This remains to be seen.

We then traveled to the US Commercial Service offices, where we were address by Keenton Chiang.  He spoke of the role that their services (part of the trade promotion arm of the International Trade Administration of the US Dept. of Commerce) play in making sure US companies are major players in China’s economic rise.  As we’ve been hearing over the last couple of days, China is seen as a beast that must constantly be fed.  As the middle and upper classes become larger and more affluent, their demand for products and services will increase exponentially.  As people gain more disposable income, they will want to buy more of the products and services that have become so popular in the other developed economies of the world.  Large multi-national companies will always be spending big money to gain wallet-share of these consumers, but for the United States to really establish it’s presence in China and take advantage of this exploding market, the small and medium sized manufacturers and professional services will need to have access to its consumers.  And this is not an easy task.  The US Commercial service attempts to provide assistance to these companies with customized market research, counseling, and other services.  Unfortunately, it seems these programs and staff are vastly underfunded, and thus are not as effective as they could be.  I found this to be disturbing, as it is often the case that the some of the most valuable bureaucratic programs of the government are often the most marginalized.  And in the case of the Shanghai office of the US Commercial Service, which represents the largest city of the fast growing economy of the world, we should be dedicating ourselves to establishing a trade presence.  It can be illustrated by the emphasis put on parts and service during our visit to the Ford offices yesterday – once you’ve sold a Ford to customer, the interaction does not stop there.  The car needs replacement parts and service from Ford plants and technicians.  The customer becomes a lifetime customer, and maybe so will his or her children.  This illustrates how important it is to become involved early on in the consumer development cycle, when American products and service can enter the mainstream.