Wednesday, January 24, 2007

Some more from Beijing

Before I continue, I'm not the only one who has noticed certain chinese habits:

See: http://news.yahoo.com/s/nm/20070123/od_nm/china_spit_dc_2

Now back to the regularly scheduled blog entry:

Just because I was traveling by myself in Beijing, doesn’t mean I was always alone. By booking my tours at the hostel I met up with some other travelers. The most interesting was a Chinese girl, my age, from the Sichuan province who was on her way to Cameroon (yes in Africa) to be an English-Chinese translator for a Chinese manufacturing company with operations there.

We met on the trip to the Great Wall, and I learned she had been in Beijing for a week trying to get her visas settled and she was flying out the next day for Cameroonbut wanted to see the sights before she left. She bemoans the fact that she has to endure an 18 hour layover in Paris on her way to Cameroon the next day. Turns out she couldn’t get a French visa in time so she can’t leave the airport during her transit. She explained it was because:

“China is 3rd World”

- “I disagree, it may not be first world but it’s not 3rd world.”

“Yes it is, you have only seen best cities and not the country. In the country we’re 3rd world. That’s why I couldn’t get my visa.”

Touche, she had me there. I take this as my opportunity to ask about the changes she’s seen in her life.

“Well, when I was young my family cooked and heated with wood, had no hot water, and no TV. Now my family has 3 digital cameras, computer with internet, TV, and heat. Plus, the provincial capital now has 8 Starbucks.”

That my friends is China for you. Despite it being "3rd World" it is developing at an astonishing rate. That's not to say there aren't problems, but despite these advances she was still pretty pessimistic.

Earlier as we were walking. . . I mean climbing. . . she said: “The old Chinese were so smart, unlike the Chinese of today.”

- “Why do you think that?”

“The older Chinese were able to build something like this. All we do now is copy.”

- "True, but don't you think you'll innovate, once you learn everything you need to from copying?"

She gives me this weird look, as if I were dumb, and says no without further explanation, and I drop the topic.

Later on, I met a couple of friends of friends who also happened to be in Beijing. Both were friendly Mandarin-speaking expats (I consider someone from HK as an expat), and we had some interesting conversations. I bring up this last conversation to one of them, and she agrees, but elaborates on how the younger generation values making money and consumption above all else and aren't too concerned about how it is achieved.

These are just 2 data points, and whether this sentiment will evolve over time is an open question, but if true it does pose some interesting implications for the future if Chinese society is content only on immitating advances made elsewhere. First it means foreign companies will have to continue to be careful about their IP in China as there won't be a momentum to strengthen IP protections. There will be too many people profiting from the status quo and there will be little Chinese IP to protect, so there won't be an impetus to change. Secondly it poses some interesting questions for Chinese growth. Without strong innovative/entrepreneurial forces, China will achieve a limit as to the growth it can achieve. At some point, the growth coming from getting more labor force participation and basic development will cease and growth will have to comefrom innovation and prodcutivity improvements which will be hard to copy. . .

Other interesting points I learned from my conversations included:

  • The infrastructure (legal system, financial markets, etc.) for full market reform isn’t there yet.
  • Despite your perceptions, there is sometimes talk on Chinese TV about becoming a democracy. It doesn’t get too radical, but talk happens.
  • The Chinese value stability and are worried that liberalizing too radically would undermine that stability. They worry about following in Russia’s footsteps. I'm not sure whether this is a common view, or just one held by elites...
  • The managers of the state owned businesses can be shrewd businessmen.
  • They get CNN and western media, but sometimes when a sensitive topic comes up the signal will get lost or pages will be missing. However, that is relatively rare.
Another topic that came up involved Hong Kong's competitiveness in the new China. One of the
friends of friends mentioned that she had a conversation with a Chines businessman who said that HK and Taiwan used to have an edge and that he sees that edge being whittled away. In that businessman's eyes the HKGese are too demanding of institutions(like the government) and rule-following (i.e. pollyannaish)to succeed, unlike those from China or Taiwan who are willing to use a little Guanxi(connections) to do what needs to get done. Don't know what to think on this point, but it does give me caution about business in China. . .

Another nerdy post, but again I am supposedly here to get an education. . .

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