Aloha from Thailand!

I cannot think of a more fitting end to this whole experience than that which is taking place. As I look out on the noisy night time streets and cross dressing cabaret dancers of Koh Tao, Thailand from my poorly lit internet cafe, I cannot help but get lost in the blur that has been the last month. In only five weeks I have seen the Bird's nest (Olympic stadium), the Great Wall of China, the Taj Mahal, the full moon party in Thailand, and some of the weirdest food and people that I could ever imagine. As Dr. Carr noted it is almost impossible to look back and fully reflect on the experience at this point, especially as I am still traveling and continuously meeting with new experiences. Only today I scuba dove for the first time - a breathtaking experience in itself! I will do my best to sum up some of my experiences thus far in the following.

On my most important business take-away:

I think the most important thing that I will take away from this trip relates to Doctor Carr's observation:

"These students should also now have the ability to understand and analyze, at a sophisticated and nuanced level, the next front page article they read about China and India and business that appears in the Wall Street Journal, Financial Times, New York Times, Business Week, The Economist, et al. and be able to understand why it’s a front page story and be able to separate fact from global legend."

I completely agree with this statement, and think it is mostly due to the simple fact that I have now experienced these places first hand. Before this trip I was interested in China and India, and read related stories in the Wall Street Journal and Harvard Business Review whenever they showed up, but never really connected with the stories on a personal level. Beijing, Shanghai, Delhi, and Mumbai seemed more like sources of stories than actual places in the world. Having experienced these places and their people (and their food), I can already notice a difference in the way I interpret stories and other media related to the Eastern world. Even as images of Beijing gearing up for the Olympics flash across CNN world news I feel a close connection, as I remember walking over that same bridge only a few weeks ago. This personal connection will allow me to more accurately interpret all kinds of information from the Eastern world for years to come, whether it is from the media or from closer business contacts. I can't think of anything more valuable than the enhanced understanding that this brings me.

On mixing business with pleasure:

The most striking "best business practice" that I took away from the Chinese and Indians that Westerners could learn from is how to mix business with pleasure. In Western business it is generally considered bad form to mix business with pleasure, and it is certainly something to be careful of in some circumstances. However Indian and Chinese business practices turn this around. For example, a typical Chinese business meeting may be followed with dinner and heavy drinking of baiju (which some of us had experiences with on this trip.) This could be followed with a very long, very drunk, and very embarrassing night of karaoke. Where this apparent loss of composure might be looked down upon in Western business, it is often encouraged in the East.

This socialization does take place in Western business, only in more discrete forms, like the golf course. I think that Western socialization outside of the office needs to be expanded upon. The Chinese have a concept called Guanxi, which simply refers to building business relationships. This concept of a social network of mutually beneficial relationships, especially as applied to business, is one that is catching on in the West, as evident in personal networking sites such as Facebook and LinkedIn, but we need to take this responsibility to our business relationships more seriously. This won't happen until we stop looking at people as business opportunities, and start seeing them first as friends. On the train from Delhi to Mumbai I had a long discussion with two Indian men. While we did talk about business, we also had long conversations about religion, Indian belief and infrastructure, and interpersonal relationships. When we ended the discussion around 3:00am one remarked "See? Friendship first - just have fun... the business will follow!" What a great attitude.

On going with the flow:

I now appreciate that one of the takeaways from this trip was the testing of whether I have the flexibility that any firm, domestic or international, will require of me in order to add value to what the firm does. On this trip I learned I did have the flexibility I that I thought. On the trip (and afterwords) I met many very interesting and very different people. Learning to understand these people by interpreting both their accents and their different cultures was a challenge at first, but just like everything else became much easier with time. Since business is based on personal interaction, being able to understand and respect someone in all aspects is the most important part of any business relationship, and thus the most important aspect of being flexible for a business person. Dealing with other challenging aspects of the trip such as food and horrible travel delays was a bit more trying, but certainly bearable. The only time that I almost lost it was while waiting for the connecting flight from Hong Kong to Delhi, which was delayed 6 to 8 hours. With no sleep, and no place to sleep, that was a difficult situation for everyone to deal with - especially with a group of 42. In the end, any situation you find yourself in can be worked out, and I think this trip has increasingly prepared me for doing just that - working things out. In all the day to day business situations I felt surprisingly comfortable, which is especially surprising when thinking back to meetings with big shots like the managing director of Parsvnath - one of India's largest development firms.

On Ko Phan Ngan last week a friend and I shared a bungalow on the side of a mountain. It had one plywood bed, and one wall completely missing. There were holes in the ceiling, walls, and floor big enough for a small dog to crawl through. There was no running water, and the attached toilet was basically a hole in a cracked concrete slab. If that isn't out of my "comfort zone" I don't know what is.


A life changing experience:

The most important thing I learned on this trip that changed me as a person is that America is not, in actuality, the center of the universe. I know, I know... I never really thought that it was in the first place, except I really did! I didn't realize until I experienced being in China and India, and seeing CNN world news in the hotel rather than MTV, just how sheltered I have been. I have traveled plenty - Mexico, Canada, France, Italy, Germany, Holland and others, but never really been exposed to the rest of the world from a business perspective the way that I was on this trip.

I mentioned before that I never really perceived places like Beijing and Delhi as real places - only as the sources of media stories. I think I can say this about the people in Asia as well. As an architectural illustrator I have received countless email solicitations from 3d animation studios all over Asia who want me to outsource work to them. I'll get an email like,

"Dear Director,Thank you for reading. I am Vivien Chin. I am writing to you on behalf of MaxRENDER., China. MaxRENDER specialize in architectural 3D visualization and 3D animation processing. Our service item include 3Dmax model, architectural renderings and real-estate animation. I want to search for opportunity to outsource of your 3d relative work. If we have chance to make cooperation, you will get a professional 3d production team in China, which costs far lower but can attain a high level quality of your productions..." (names changed for privacy)

I have always found these emails a bit annoying. Not only am I not looking to outsource my work, but they couldn't even find a proper English translator to translate this bulk email that they have no doubt sent to thousands of architectural and visualization firms. I didn't really notice when my perception changed, but now when I get these emails I actually think about the possibility of utilizing their services. Having seen Chinese and Indian firms first hand, I now know that they operate just as efficiently (if not more so) than most American firms. Also, the talent you can find in virtually any industry in Asia is impressive to say the least. Also, when it comes down to it the translation is really pretty good. I certainly could not translate that into Mandarin with any kind of accuracy. Globally outsourcing work to this type of firm is a huge opportunity that I am now prepared to take advantage of. This never would have happened had I not experienced these places and people first hand.

Before the trip we read (by choice or by force) articles about how China and India are emerging as the next super powers of the world, citing the truly amazing economic progress that the countries have made in only a short period of time. While I understood these articles and found most of them interesting, I guess I never really "got it." Upon arriving in both China and India I was met with a completely different realisation than I had expected. Instead of the shining and perfect metropolis of capitalism and progress that the papers sometimes describe, these places were a mess of contradictions. Sky scrapers of steel and icy glass reached towards the sky, as old beaten bamboo shacks leaned up against their mighty foundations. Multi-million dollar bridges, as well as beautifully manicured corporate greens lead to unpaved dirt roads with homeless people sleeping on the shoulders. Many times I recall looking out my clean air conditioned bus window at old men riding on the roof of an eighty year old broken down school bus-looking vehicle with no windows or doors. The beauty and majesty of these places is in their truly incredible transformations over the last few years. This phenomenon also describes the great diversity of space and contradictions that I mention. While LA, San Francisco, Paris, New York, and other developed cities have had decades to organically grow and progress, financial districts in developing cities like Delhi and Shanghai have sprung up over night. This accounts for the huge diversity of spaces ranging from bamboo huts to some of the tallest towers in the world. This rapid growth also accounts for the world's perception of China and India as the next economic super powers.

Having seen these two economic giants in their adolescence has been an absolutely amazing journey. There are so many talented and ambitious people in Asia, and the talent pool is growing at an exponential rate. While these places still have a long way to go in terms of infrastructure and development, their potential seems limitless, at least for the moment. I think this trip has given me a very realistic view of what can be expected from China and India in the next ten years, and has empowered me to be able to identify key network players, who I will be able to create mutually beneficial relationships with as I begin to explore the domestic "real world." I see these places as real places now, and the people as real people. This is the invaluable lesson that the trip to China and India has taught me.

On China:

I don't feel like I am really in any position to comment on China (or India for that matter) on a comprehensive basis. Sure I have read a lot about China in the business world, and experienced more of it than many people in the world, but really I've barely scraped the surface. To me, China is a strange and foreign land (still). I don't know where they get their food, but it's definitely not from the same supplier as Golden Gong in San Luis Obispo. The language is impossible for me to pick up both verbally and visually, so I can't ever tell where anything is - even with a map (unless there are romanised street signs around.) Even with all this, I can also see China as a huge opportunity for any Western business person with a bit of an open mind and a strong stomach. The Chinese culture and knack for business networking make China a very comfortable place to do business - especially for someone who has something to offer the country. I personally would not leave California for a life in Beijing or Shanghai, (or anywhere else for that matter,) but I can certainly see the draw of these places. The welcome that our Chinese hosts showed us on the trip is truly unparalleled in my experience, and I am sure they show this same respect when dealing with both customers and business associates alike.

The first thing anyone ever says when I mention China is, "Oh yeah they are totally going to take over the world!" I don't really believe they they are going to take over the world by any means, but as Fareed Zakaria points out, we (Americans) are definitely going to need to learn how to deal and partner with them. As China and its economic markets develop further, it will undoubtedly transition from "factory of the world" to "business partner of the world".


On India:

It amazes me how similar, and yet how different China and India can be from one another. It also amazes me how efficient Indian business can be with almost no physical infrastructure. I suppose this is a major part of why India has come to specialise more in the outsourced service industry. As our host at one Indian company described, this lack of physical infrastructure actually makes many service industry companies much stronger, by forcing them to become self-sufficient. That specific company's facilities could run effectively without any power from the public grid for a full seven days! I don't know many American offices that can make such a claim.

Another amazing thing about India is that many business sectors that have existed for decades in the US are just now becoming organised in the Indian market. This leaves a huge opportunity for first entrants to monopolise these industries in India. Even better, these "first entrants" can benefit from years and years of proven methods in the US. The first company to enter a market in India has all the advantages of being a first entrant without much of the R&D cost or even risk. Real Estate is only one of these sectors that we looked at while in India. While real estate has obviously been a sector for hundreds of years in India, it was only recently that the sector started organising, and a few firms began to look at Indian real estate as a whole, rather than single owners selling individual plots of land all over the country. This lack of organisation thus far has allowed these few companies to achieve monumental returns with little to no competition from other firms, whereas in the US for example, countless large and small real estate firms compete viciously for land and for customers all the time.

The question for me is how to take advantage of this new market organisation and realignment as a foreign investor or partner? I can't really comment on that (or you would know my secret,) but obviously the opportunities are virtually limitless at this point. To me, India is an incredibly exciting opportunity.

River Town
Two Years on the Yangtze
Peter Hessler

Peter Hessler’s River Town is a colorful depiction of the author’s two years spent in the Peace Corps at Fuling, a “small” town on the intersection of the Yangtze and Wu Rivers. As one of the first westerners to see the town in fifty or so years, Hessler and his friend Adam interact with the new and strangely beautiful world that is Fuling through a series of short and sometimes comically uneventful encounters.

River Town is more painting than prose, vividly illuminating the dichotomy between the Chinese city and its surrounding landscape. I cannot explain what I mean but to site the following passage: “Paulownia trees bloom purple and white along the lower slopes of White Flat Mountain. The trees’ flowers are short-lived -- next week they will begin to wither and fade -- and the soft yellow of the rapeseed will soon be cut down from the hills. After that, the bright green rice beds will disappear, moved and dispersed into the waiting muck of the paddies. Spring in Fuling does not arrive so much as it rushes through, a blur of changing colors.” This depiction of the seasons is a common theme throughout the book, and the focus on nature and Feng Shui is presented in sharp contrast to the actual city of Fuling -- “loud, cusy, dirty, crowded; the traffic twisted, the pedestrians jostling each other; shops overstaffed and full of goods, streets covered with propaganda signs; no traffic lights, drivers honking constantly; televisions blaring, people bickering over prices; and along the main streets rows of frightened-looking trees, their leaves gray with coal dust, the same gray dust that covers everything in the city.” Notice the different tones, and different styles of writing. The city actually makes you feel dirty, stressed, and hurried, while the purple tones of the Paulownia trees set you wondering off into tranquil thoughts. I cannot describe the book better than simply sharing those two passages.

A very clear message in the book is the importance of education to the Chinese. Hessler teaches at a low level university, where most students come from, and later return to rural villages to teach at elementary schools. Still, his students come with undying pride, as many of them are first generation college students. In fact, the entire book is built upon not so much what Hessler taught his students, but about what they taught him about China, and their daily struggles.

The entire story is a finely woven article involving politics, culture, heritage, and humanity. Fuling is a river town threatened by the new construction of a nearby damn, which will submerge half of the city upon completion. This damn, though rarely mentioned, depicts the Chinese’ traditional struggle between the self and the communist whole. This theme is discussed many times in the book, including an instance later on, when Hessler poses a question to his students at the low-ranking university he teaches at. He asks the students what they would propose if they had been early American settlers posed with the problem of what to do with the American Plains Indians. Both students respond that the Indians should be forced to assimilate into modern American culture, so hat they will “get along with us and advance together.” This mandatory imposition of assimilation is a given in the minds of the Chinese.

Other accounts in the book are told more casually and conversationally. For example when Hessler is asked to eat dinner at a student’s house, he records the discussion between himself and the student’s Father. What follows is nothing short of sitcom banter, hinging on a common hatred of the “small devils,” or “Japs” (the Japanese). Cultural nuances are in this way seamlessly woven into the entire book, which not only makes for a more enjoyable read, but helps to communicate them more clearly and make them stick.

While I’m sure this is not exactly what we will encounter on our trip, I am glad I got to read this book to gain insight into the “softer” side of China. So far I have read business accounts of working with modern Chinese suppliers, government, regulations, and the like, and have seen just how stressful working in China can be. It was nice to sit back with this book and be reminded just how beautiful the country can be to a westerner. Both in its aesthetics and its uncommon juxtapositions.

Mr. China
Tim Clissold

Tim Clissold's memoir, Mr. China is a great read and a captivating look into the chasm of social and economic contradictions that are China. Its anecdotal case studies provide for a real life understanding of how business is (or has been) done in China over the last decade, including descriptions of sub par condom factories and run down mountain factories where unplanned explosions seem to be a daily occurrence.

Clissold enters China as a young and inexperienced member of the British investment community. A trip to Hong Kong leaves him exasperated but encouraged as he tries to sort out the existing anti-capitalistic culture. He finds that businesses have no incentive to serve customers - restaurants will say they are out of everything and hotels will refuse that they have any rooms. It is almost a game to them:

"I sensed a rapport with the people I met; it was almost as if they enjoyed the game of wits and they often gave me a laugh or a smile once they finally gave in. I never felt any malice from them; it was more like a bad habit that no one seemed able to break."

After this quick stint in China beginning to learn Mandarin and seeing the incredible opportunity he goes back to Britain to urge his firm, Arthur Anderson, to set up a satellite office within China. He is all but laughed out of his job.

After he decides to quit his job go to China to study Mandarin full time, the story really begins. Alongside his newfound mentor Pat, a wildly successful investment banker with connections on Wall Street, he travels all across China in search of investment opportunities. The factories they visit are usually comical to say the least. As you read you begin to have a real sense of what China really means in terms of management. At first Western investors are all but disgusted with the situation in the factories and refuse to invest. Pat and Tim realize that they will have to do this through a wide network of connections, and that is what they do. Working with Ai Jing, a motivated Chinese beurocrat, they set up a network (over long nights of genital delicacies, Baijiu moonshine, and kareoke) with Chinese officials across the country looking for Western money to fund improvements and expansion. Pat brings their identified investment opportunities to Wall Street, and they are granted $158 million to invest in different projects in China as a joint venture.

What follows is worthy of a Will Farrel movie. As millions of dollars disappear overnight, factories begin producing unauthorized products, and they try to deal with multiple government agencies (like the anticorruption bureau which demands a sack of cash and a new car before starting any investigation), the team begins to realize that the Western private investment model of "fund it and leave it" just isn't working. Westerners assume that laws keep companies relatively under tabs while the companies themselves are motivated for success to gain their own rewards. Apparently in China this isn't the case.

Clissold's account of their missadventures give Westerners an inside perspective on business in China, and is indispensible for anyone planning to enter the Eastern market. It also provides a realistic look at the investment opportunities and how difficult they are to manage as a Westerner in an Eastern world. While conditions may have changed in some places in China over the last few years, this remains business lesson and story for the ages.

Check out these pics of some beach in China... ummm gross? Looks like San Diego on the 4th of July. (ps I have no idea when or where this was so it could totally be an isolated incident)