Brothel or Hair Salon, Hair Salon or Brother- The Difference in China

Ok here is a quiz to test your level of China awareness. Three of the places above MAY off you a little extra pleasure, with your haircut or massage and one of them will not. I dont mean to disparage the good name of the places, but for one day they were actually closed down for accepting cash for a little touchie feely… hint, in China both barber shops and massage parlors have those spinning barbers poles. In china, barbers do not typically wear micro mini skirts and lounge in the front room on

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How Do You Teach Corruption, Or Why an MBA is Useless in China

I went to a big state owned enterprise the other day and will blog it later, but going there, I thought of an MBA and what it can offer and how useless it is in China. MBA’s teach you how to analyze, to think, to make pretty business plans, chart cash flows etc. But in China all of this is pointless. As the saying goes, its not what you know, but who you know. In China this can be changed to “Its not what youi know, but how much you pay who you know.” And I am not exaggerating on this account. As an example, a friend and I started a business here. Both of us graduated from a premier MBA school back in civilization-usa. We learned how to project sales, and do trend analysis, look for the right human resource mix, all with the end on making a good profit and bringing value to the consumer. And then I came to china. We pitched our idea- attempted to get venture funding or cash, to keep it afloat. Being semi-industrious and westerners, we attended meetings with our chic laptops, product mock ups and financials, it was a waste of time. The people with whom we spoke, lawyers and VC investors, were ill-versed in any of this. We did get money, mind you, but it had more to do with connections that any of the team had, or some guy looking at the product and liking it. They have no idea how to value goods, and what your true value proposition is. So, if you come to China, ditch the MBA (digression- nowadays, many older Chinese get them, but they are merely paper mbas more paid for than earned), but if I were a chinaman, the last thing on my mind would be to get an MBA, in china its useless. After all, how does one teach you how to be corrupt…

Chinese “Innovation” And Why Chinese Products Suck

Why Chinese Products Suck! I will shed some light upon this subject for you, based on my experience in purgatory, I mean China, and abroad. First an overview of how manufacturing works in any ethical reputable country. A company needs a part or a product so they can either do it in house, or outsource it, lets use outsourcing here. The company asks an engineering/design house to build them a part with certain specs (specifications), lets take a desk as an example. The desk should be three feet high and 3 feet deep and 5 feet long (I know nothing about desks, but will use this as an example as its easier than talking about auto parts). The design company works up their samples and presents them. In this instance, lets assume that the design company had 3 ideas. options: a-great design, most expensive wood imaginable-African blackwood (I looked this up here) cost U$500,000 b-great design, medium wood – cost U$10,000 c-great design, ok wood- (maple)cost U$2000 The owner decides that option C is ok as his consumers wont pay 10k for a desk. The design company then provides the design with measurements and tolerances, this is important. What this means is that they will say “in order to maintain the integrity of the product and its quality, the product MUST FALL WITHIN THESE SPECS. As an example, they may say that only wood of 1 inch thickness, plus or minus .1 mm be used. Due to aesthetics and quality reasons, anything that is not 1inch +/- .1mm needs to be reworked or destroyed. (tolerances also provide a uniformity of product look, how would you like to buy a new bottle of Coke, and half the time it is one-quarter to one-third full? So, the ethical businessman, gears up to build the desks. They obey and follow the rules and make a quality product. That is in the west, but in China The owner will buy a copy of the western product. He will then go to a KTV and leave its dissection to an underpaid, overworked underling. He will return and ask they underling what he found, but not listen because he must go meet with a government official and give him that red envelope-hong bao (bribe) soon. In any event he will tell the lacky to reproduce the same thing at 30% the cost or 600U$, and do it fast so he can earn a bonus. The owner goes meets with the officials, pays them goes to KTV, avoids his wife and burden of a child he has, returns home late then reappears at his company a few days later. The lacky, now near exhaustion has a solution. He says that the design is ‘too western’ its too robust. He says that maple is a fine choice but Chinese can do better with a lesser quality wood- pine. He also says that one inch of thickness is too much and they could get away with half of that, plus the tolerances are too tight, so the product should be 1/2 inch +/- .2mm. The boss commends him on his fine work then fires him, after all, he doesnt want to pay a bonus does he? The boss, after meeting more officials, smoking, consuming more cheap chinese alcohol and playing with local ktv hussies, returns the next day. Upon returning he commands the HR wench, who he hasnt fired yet, as she has recieved no bonuses, to send in the next manager in line. The guy enters, the boss tells him he has a great idea and proceeds to tell the next “new lackey” that he will make a desk. He shows a picture of the good western product. He tells the lackey that it should be 1/2inch thick with a tolerance of .2mm. He then tells the lackey to produce it with particle board for about U$50, after all, those barbarian westerners are paying U$2000 for the same thing arent they? The new lackey waddles off, visions of a cash bonus in his eyes. He figures that if he can lower the cost by fifty percent, he can receive a)bribes from new suppliers, b) a higher bonus from his ignorant boss. The new lackey goes off for a week and then returns with a truckload of finished product and good news. The desks, which to all outward appearances are identical to the western product, look great in photos. He has already uploaded them to tao bao (China’s ebay knockoff) and is ready to sell. When the boss asks him about the cost, he beams, only U$25!. The boss fires him, moves on to lacky number 3 and tells him of the great idea to sell these desks to the dumb barbarian foreigners. The lackey looks at the original and the ‘fake’ or chinese product, they look the same. The lackey then taps on the Maple table, is awed by its design and durability, then taps on the ‘Chinese good’. “hey boss, this desk isn’t even made of wood, its hard-pressed and baked cardboard.” lackey “until you touched it, could you tell?”, boss “no” lackey “Ha-ha! exactly, until you’ve purchased it you cannot tell! Thats called Chinese marketing.” boss beams. Sadly, this story is not too far off. I have worked with many companies here and at each stage of the process someone is cutting corners due to fear, ignorance, or greed. I truly am fearful each time I pad across a bridge in this place. They typically start off with lower quality raw materials, and accept high tolerance levels (its cheaper),and end up with a crap product. Oh well, we cant complain, we still get low priced goods from China, dont we?

Mystery Death in China

Here is an excerpt from the China daily, Im only using to to show the ignorance of the Chinese press and chicoms who control it. The excerpt below is talking about a chinese guy who ‘died’ by attempting to protect his home from forced demolition. Remember, in China, by law the land belongs to the people, but when the government wants its use, or the guys who pass handfulls of cash to government officials want to use it, then the landowners must suffer. So, this guy was standing up for his rights, and didnt want to leave his home. The title of the article is the “Mystery of the Demolition Death”. Hmmm some mystery, an old guy is surrounded by 20 younger men, doing who knows what, and the old guy ends up dead. Maybe its just me, but I dont see the mystery in all this. excerpt: “SHANGHAI – The latest tragedy in a string of bloody cases of forced demolition in the country occurred on Tuesday in Shanghai, when a 49-year-old man died while trying to protect his house. The man died half an hour later, despite emergency treatment by the nearby 120 medical emergency center, his sister said. The victim, Zhou Daming, was “besieged” and “pushed” by a group of 20 men who came to notify him of the impending demolition of his house, located in downtown Shanghai’s Huangpu district. When the men dispersed, Zhou was found lying unconscious, said witness Zhou Juhua, the victim’s sister.