Thursday, May 14, 2009

Some thoughts to date - From Professor DuBois

Hi Everyone, have been having some technical difficulties here in China trying to post to the blog...we’re trying a "work around" now that I think that will fix the problem.

So to bring you up to date – grad students arrived with no hitches on Saturday and on Sunday we did a little tour of Shanghai – mainly the Pudong area where we went to the top of the Shanghai World Financial Center for an amazing view of the Huangpu River area and the Puxi area of Shanghai. What is amazing is that 15 years ago the Pudong area was a virtual ghostown – nothing but little farming communities and perhaps some cheap housing – it was only connected to the Puxi area by a bridge in 1998...that was when things took off and the developers have not looked back. It is now home to the largest skyscraper in the world (not counting antenna!) and numerous other interesting buildings – it's the area that hosts the Oriental Pearl TV Tower – the bizarre looking space age structure featured on all the stories about the "new" China.

The "old" China is, of course, still around and will be for years to come, bicycles and scooters are everywhere as are many "old style" neighborhoods. Also to think that Shanghai is representative of China is totally off base – it’s a unique city and development area and there are few places like it in China.

On Monday we had two company visits: Zhangjiang Hi Tech Economic Zone and Alstom...the Hi Tech Zone is an industrial park developed to attract “desirable” businesses to China.it offers a “cluster like” atmosphere and is essentially trying to build on the silicon valley model with similar businesses and a professional orientation building on proximity to Shanghai...most of the tech oriented Multinationals have operations there for software development, systems engineering, chip manufacturing and so on….we got the basic overview – sales spiel from the public relations person...tranquil environment, business services – even a patent law office in the area! Interestingly there is also a lot of movie animation (CGI type stuff going on here too) in fact its said that the most beautiful actress in all of China was created on a desktop here! Those of you that may be into “World of Warcraft” should note that the animation is done here.

Alstom is a French company that makes rail and metro cars and power generation equipment. China is a perfect location for them given the incredible transportation and power needs here. One of Alstom’s major markets is power turbines – they are supplying the three gorges power project and are involved with a number of nuclear power projects. They also sell locomotives and metro cars to the various rail companies in China. We got a great presentation from the Managing Director who had only been with the company for about 3 months after being headhunted from Siemens. Interestingly the Managing Director is also a government official and is part of the future technologies committee for the Party...one wonders what benefits Alstom might get from his involvement in this committee?????

Tuesday found us back in Pudong for a visit with China Telecom – one of the three large telcos in China – we got a nice overview of the company and the IT industry in China and the Asia-Pacific region...great visit and knowledgeable presenter. Interestingly, the government purposefully created the three companies so that there would be some element of competition in the industry...like three brothers competing to see who is the best?

In the afternoon we had a meeting with a former Kogod MBA student Mark Ray – he is now working for a consulting company (JLJ Group) advising firms on market entry and HR strategies in China. Mark gave us some great insights about the realties of Chinese business culture and the importance of “guanxi” or relationships...relationships, of course, are critical to success anywhere in the world but in China it goes much deeper and gets ever more complicated...things that are common here would get you in great trouble back in the USA.

That evening we headed North to a city called Wuxi – which means “no tin” and derives from the fact that many years ago there was lots of tin there which was mined to make weapons – given this strategic resource, Wuxi, of course, saw lots of battles as warlords fought over access to this critical component in weaponry...when the tin finally ran out…the city changed its name to "no tin" to convey to the warlords that they needed to leave the place alone!

We were to have visited the Solar Panel manufacturer Suntech here – but were canceled at the last minute due to concerns that we would be bringing the employees an unintended gift of A1N1 flu virus...as it turns out this is not the first that we will encounter this issue. The Chinese are very sensitive to what happened in 2003 when SARs hit the country and ravaged the weak and elderly. Several thousand deaths occurred which might have been prevented had the government been more quick to react to the evidence that there was a serious epidemic beginning to spread. I get the impression that now the government is overreacting in the other direction to underscore to the citizens that they are doing everything to prevent its spread….this seems to be the policy of President Hu. Hu also appears to be taking on other negative aspects of the Chinese system – corruption (at least at the surface) is more under control and there is a somewhat greater effort to have more transparency in government actions.

So in Wuxi, we stayed in a brand new luxury hotel in the new part of town – Wuxi is what could best be described as a Sci-Fi city at least in this part of town where there were bizarre looking buildings, brand new expressways and neon everywhere...but still the trikes being pedaled by tired old men and women with stacks of cardboard on the back of them – off to the recycling plant to make a couple of yuan.

Given our canceled meeting we spent the next morning at a movie studio on the shores of Tai Lake – this studio is where the 84 part series “The Three Kingdoms” was filmed and is now something of a tourist attraction when it is not being used as a set for other films by Chinese production companies...given that I think we were the only foreigners there we become something of an attraction ourselves with a quite a few Chinese asking us to pose for pictures with them. Later we took advantage of our proximity to the major freshwater pearl producing area of China and browsed the pearl market...then it was back on the road headed north to Nanjing. I will update you on the events there in a later post.

5 comments:

  1. What's the state of green tech/clean tech. Chinese heavily involved in PV industry before recession. Any signs of life in that sector? China stands to gain as much or more from green tech than any country. Maybe the recession also slowed down all those coal fired power plants that were in the pipeline.

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  2. We got the blog this am.It's a shame you couldn't tour Suntech, because I wanted you bring a few panels home...nice energy efficient souvenirs!

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  3. With regards to Green tech - there is a lot of talk and planning. Recession has slowed things down but China talks the green talk...there is still a voracious need for power and looking at all the neon in the big cities you wonder if the State Grid is giving the stuff away. Hotels though all have lights rigged up to a switch that is operated by the room key so when you leave, the power to the room shuts down. The 3 Gorges project has already paid back 20% of the investment and it is not yet completed. Most of the PV cells are for export - only 14% of Sunergy output stays in Asia - and probably most goes to Japan. I have seen a lot of solar water heaters on roofs of individual houses but nothing in the way of solar panels except in High tech parks, one building in Nanjing had a green roof and I think it was owned by a German MNE. Hard to get good facts here because most of the presentations we have heard only give hard numbers through 2007. I get the feeling that 2008 would rather be forgotten. Word from students we have met is that job market has collapsed so many are taking whatever they can get.

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  4. Cathleen, Chris Chapman is going to be over here this weekend to check on his order for snow skiis - he is looking to fill up empty space in the container with solar panels. I take it our electric bill is still outrageous?

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