Understanding China, One Blog at a Time

An American in China

Archive for December 8th, 2009

Big Family Hello- Da Jia Hao

Posted by w_thames_the_d on December 8, 2009

Da jia hao, or big family hello (大家好 for those of you counting) is a common greeting here in mainland China. When commentators, stars, whatever, collect and speak, this is usually the first phrase from their mouths.

It is a simple gesture but actually quite profound. The meaning could be ‘everyone hello’, ‘many houses hello’, or ‘hello the the family’. What I have found, is that quite often people who are unrelated will refer to one another as if they were family. For instance I work with a lady called Zhang and they call her sister Zhang. In fact, most of my colleagues refer to themselves as such.

I thought about this and the notion of calling one another big family, and it struck me. China has had some luck and a few gifts over the past years and another big one to come in 2010 (world expo)., thus they have had quite a lot to be proud of, which would unite them. They had the Olympics ( an international gift), they kicked butt in the downturn (all from thier efforts), and they will host the world trade show next year. All of these things have come at a time when the world, to a great extent is helping them to avoid the problems that the rest of us are experiencing now (what would Brazil’s economy be luck if the Olympics were to be held next year).

But the key is that the level of national pride has to be admired. I am all for free speech, but what I have seen is that while many foreigners are busy bashing their countries and feigning shame at their world dominance, China merely says "Da jia hao."

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Falcon and Snow Man- Blogging on the DL

Posted by w_thames_the_d on December 8, 2009

Wow, did you ever see that movie “The Falcon and the Snow Man”? Great flick, with Timothy Hutton, and Sean Penn (overview here). Basically the guys were selling useless secrets in the cold war. The parallel is that Timothy Hutton is basically easy-going does falconry etc. He doesnt have any gripes, just wants to live and let live. He and Penn are then pursued for selling this fake secrets. It is this part that I am reminded of, but in the reverse. It is as if, I by putting my thoughts  into digital 1’s and 0’s, am exposing some secrets of the PRC for which I may be punished.

Obviously I am joking, kind of. I had a friend from England who had been here for over 7 years, this guy had every whacked out conspiracy theory story imaginable. When he first spoke to me I was like, wow, this guy is on the edge. After living her for a bit, I now am surprised by little. Would this keep me from blogging, nah, it’s just part of my nature. But just an FYI, if the next post you read is titled “Understanding Brazil, one Blog at a Time” then you will know.

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Construction work…

Posted by w_thames_the_d on December 8, 2009

Um,, no relation to quality blogs below…(scaffolding for building a new Military unit by my old place).

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Pimping China-Proudly Made in China

Posted by w_thames_the_d on December 8, 2009

Just saw this about the fact that China is trying to increase its esteem in the eyes of buyers by running a “made in China” campaign. The site reporting it is xinhuanet one of the mouthpieces for the  Chinese government. I say this not with a sense of judgement nor anger, just a fact. I found two things in the article interesting (article here):

1- “The TV commercial was designed to tell overseas consumers that Chinese companies work with overseas firms to produce quality products

2-The Ministry of Commerce (MOC) has said it was supportive of the ad campaign.

As for number 1, I think the world is well aware of China’s pre-eminence in the manufacturing realm. In addition, obviously companies such as Apple and others do work with locals on products that do achieve high levels of quality. The funny thing is that we all know this, but we know that the true value-add is from the home country and not the PRC (especially in terms of quality control). As a businessman here, it is obvious to all that one can obtain quality, many Chinese companies have excellent quality.  In addition, all of the value add that typically goes into our products comes from places other than the PRC (due to many factors). Thus, this article confuses two issues, the fact that quality goods can be made in China, and quality goods can be made in China, by a Chinese company.

The general confusion here is that people dont  trust Chinese manufacturing, and to a certain extent, that notion is well deserved. We have seen to many scandals to not feel jaded. The problem is that absent strong governmental oversight and transparency, it seems as if buying goods from local suppliers and local manufacturers by a local company is quality Russian roulette. Most people are willing to give the benefit of the doubt to foreign firms, as they feel that there is some level of inspection and oversight that goes into the manufacturing of a good that one does not get here. Thus, a better story may be something like, China- Government Declares a war on Home Grown quality issues.  (Offing the people from the milk scandal does not really address the fundamental problems that they face). Chinese businessmen, as other countries are going to maximize profit even if it means cutting corners. The problem is that here, the government has not done their part in protecting consumers at the expense of the companies. The west has been dealing with these issues for over a century, but to China, they are still new. The governement has to take a proactive role.

The second issue, that of the Ministry of Commerce approving of the ad. That takes a measure of thought that a single-celled amoeba could produce. Basically that Ministry is a government entity, and remember ALL news agencies in China are owned by the government, and ALL media agencies must obtain permission before ANYTHING goes out over the air. Thus, the message is favorable to commerce and the man would agree, in addition, those decisions were made at a level much higher than his pay grade, and thus approval is basically guaranteed.

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Damn you Government- the Chinese one…

Posted by w_thames_the_d on December 8, 2009

Conundrum-2 a : a question or problem having only a conjectural answer b : an intricate and difficult problem www.m-w.com

Yes I yell damn you Chinese government. I am now in what you could call a conundrum. It appears as if the good old government of the PRC has done an end run, seems they have liberated the blogosphere to us. Yes, it seems as if we do not have to resort to technological wizardry in order  to access or blogs. Good thing right, I mean maybe they have had a change of heart, maybe the government has decided to open up and allow the citizenry to express their discontent. Hm.. well…uh, yeah scratch that idea.

On the other hand, at the risk of being paranoid, maybe it is all part of a devious plot to flush out the malcontents, track their blogs and IP’s stamp their visas and give them the boot. Sound paranoid, well it is, but then again they say something like this happened in China in the 50’s.  A group of scholars was collected to advise on the future of China and her problems. From what I can gather, it would appear that these people who were trying to help out, were actually later declared malcontents and persona non grata, many were killed (parts of it here).

Damn this is confusing, accessing blogs seems a benign act, just like protest or voicing one’s opinion… but then again… but I never really say anything bad… but then again….

Hmm, discretion being the better part of valor, I think I may just have to keep it on the down low….

blogging from China… or am I…

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On quality…

Posted by w_thames_the_d on December 8, 2009

Had a friend over, he was pissed, I had just told him that the pens he’d purchased were shit, wouldnt last a week.

“Nah, these, they will last me the next 4 months,” he said and held up the 24 pack of pens.

He thought I was belittling him, in a sense I was. In China, pens just like disposable lighters, have the shelf life of a loaf of bread, are good for about a dozen uses. Products, no matter where manufactured have an associated level of quality per the manufacturing cost.   Take a fake Iphone for instance. Lets say that Apple sells one (without discount etc.) for U$400. We then subtract a health profit margin (say 25%), which leaves U$300, then lets say that due to internal voodoo finance calculations, part of the Iphone’s cost is supporting some other product, (for example a MacBook), so that part may be some 10% which gives us a price of U$270 to manufacture, going further lets say that much of the design work etc. is done in the USA with engineering costs of 4 to 5 times higher than other countries (assume this cost represents 35% of the total cost) which would bring it to around U$165, to manufacture. Now lets consider marketing and sales at a level of 25%, this would leave us around U$90 just on parts and labor. If we do this is RMB then we see that in RMB that quantity is about 630.

Now lets look at the typical counterfeit good. If I am lucky I pay 400 RMB, remember that is to the end-user. Most Chinese would pay 350 RMB lets say. Now again, remember that is to the end-user. From this we must subtract the reseller’s markup (25%), a middle man, potentially and the profit margin of the seller. Suffice it to say, that the fake Iphone is probably being manufactured for 175 to 200.. RMB that is or around 25-28 U$! Remember that this estimate is conservative.

Thus, if we look at the two goods, it is quite obvious as to why those pirated goods last 1/10 as long as their brethren ( a thing my friend hadn’t learned yet).  I actually told him this, he scratched his jaw, considered me a pessimist, that is until he looked down, at his shirt, at the large ink spot.  Sure enough, as we sat and spoke, one of his new pens had leaked staining his new shirt.  He looked at me, I looked at him. Welcome to China….

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