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Doing Business in China: Legalese (updated)
Nearing the end of our
Doing Business in China clips, here's the story of a Western businessman who went to the Chinese courts for relief -- and got it. Larger point involves the uneven way that "rule of law" applies in China. Some place, yes; many places, no; but the number of "yes" zones is increasing.
UPDATE: In introducing the
previous clip, I said that there was one sentence in it I completely disagreed with, while all the rest rang true. In case you were wondering, it was the sentence saying that in Shanghai and Beijing, "it is hard to find someone who doesn't speak English." If you define "Shanghai and Beijing" as meaning, "inside a five-star international hotel in Shanghai or Beijing, among the staff trained to deal with foreign guests, when the first team is on duty," that statement is exactly right! Otherwise....The statement appears around time 1:20, so you can put it in context and see the source.
Doing Business in China: Lost in Translation
Ah, the mysteries of language. This little clip, next in the
Doing Business in China series, actually does a nice job of introducing some of the tangles and intricacies of the "what language
are people speaking, when they say they're speaking English?" question. There is exactly one sentence in this clip, from an interviewee, that I completely disagree with. Will let you guess which one it is. The rest all rings true, even when people contradict one another and themselves.
Doing Business in China: Who Holds the Purse?
You can probably guess the answer to the question above, explored in this next clip from the
Doing Business in China series. But I do love the way this clip gets to the answer, via both its pre-Communist era documentary and movie footage and also its exploration of special role of the "Shanghai woman." I think you will see what I mean.
Doing Business in China: An Eastern Perspective
This clip is about numbers, and the varying ways to make sense of them in China. At one extreme the power of numbers is of obvious and unignorable importance. The opening scene of the clip, on a winter day in Shanghai, give a glimpse of the sea-of-people effect of many Chinese cities. On the other hand, neither Shanghai nor Beijing nor any other city in the mainland seems as densely packed as either Tokyo or Hong Kong. The difference with mainland China is that there are so
many multi-million person cities across so huge a landmass, plus plenty of well-populated rural areas too.
At the same time, just about any number concerning China is an approximation, from economic growth rates to literacy or environmental readings, or anything else. This clip mainly talks about the implications of that rough-and-ready statistical approach for businesses, but it has international and political implications too.
Doing Business in China: Drinks and Deals
Ah, drinking in China as part of business negotiations. Where to start... This next installment of the
Doing Business in China series is a beginning. It really is true that the purpose of many "business" dinners is for everyone, Chinese and foreign, to become drunk (often on Chinese
Baijiu, 白酒, vodka-ish raw spirit). In becoming drunk and lowering defenses, people prove their mutual trust, or something. In any case, it's real. Note the appearance of Chinese beer, on which I often commented during my time of residence, starting about time 0:11. Main point: this sounds like a joke or cliche but actually makes a difference.
Doing Business in China: A Piece of the Pie
Next in
Doing Business in China: the pizza wars! Early in our stay in Shanghai, my wife and I tried to stop in to the Pizza Hut just north of People's Square -- and were turned away, by a head waiter whose face was barely visible beneath his gigantic sombrero. We didn't have reservations, on this routine weekday night -- what were we thinking in trying to get in? This is one illustration of the social and business complications of the pizza business in China, which has been good for Pizza Hut and very rough for Domino's. This segment narrated by Emily Chang, series co-host.
Doing Business in China: From Supply Chains to Supply Networks
Next up in the
Doing Business in China series: a clip that gives a brief look at one of several central, and complex, parts of the US-China business interaction. This clip has some worthwhile shots of the insides of several Chinese factories -- a relatively new one, and a ponderous old state-owned metal works.
It also introduces an aspect of the "outsourcing" wave that I discussed two years ago in "
China Makes, the World Takes": that factories in China, serving US and other foreign customers, are providing a lot of jobs for Chinese laborers, but are also providing a majority of the profits, plus most of the associated design, marketing, R&D, etc jobs elsewhere, especially in the US. The furniture company featured here had never done production inside the US: it was a pure startup, with factories in China and design/marketing/management in the US, to serve a mainly US market. The ramifications of this overall division of labor, and how it might change in the future, obviously go beyond the bounds of this clip (and are considered in the series as a whole, in my book, etc). But this is an opening look.
Doing Business in China: Keeping Employees Happy
Next up in the
Doing Business in China series: a look at an issue whose importance may come as a surprise to people who have not worked in the country. This is the challenge of
keeping Chinese employees, once they have become skilled in factory or white-collar procedures. Among other things it mentions why "Spring Festival," aka Chinese New Year, is the moment of greatest turnover, as workers go to their home villages and then often shop around for new jobs when they return to factory centers. Plus, another cameo by Kaifu Lee!
Doing Business in China: What is Communism?
I love this clip, once again from the
Doing Business in China series. In particular I love the initial interviews with business people, average folk, Communist Party members, etc. about what this thing called "communism" (共产主义,
Gongchan zhuyi) might possibly be. You'll see what I mean. And again this rings true to my daily experience there over the years.
Doing Business in China: Kissing in Public
All I'll say about this clip, next in the
Doing Business in China series, is that I did in fact frequently patronize the Haagen-Dazs stores shown in Shanghai to get presents of ice cream for my wife. The clip explains why this makes me a romantic-hearted person. The fashion show at the end also gives a little glimpse of why it can seem, well, incomplete to refer to modern China as only a grim land of sweatshops, or a culture under careful control by the central government, et cetera.
Doing Business in China: Battling Pirates
Next in the
Doing Business in China series: a look at the morass of intellectual property protection, plus ways that some foreign companies have tried to cope with it. I'm not entirely sure, but I think that the opening scenes, in which CDs of operating systems and similar big-ticket software items are being sold for a dollar or two, were taken in front of the same high-tech mall in Shenzhen that I wrote about
in 2007.
This clip is also notable for the cameo appearances by Kaifu Lee, a very attention-getting figure in the Chinese technology business. During the early filming for this series, he was Microsoft's man in China -- working, as the clip explains, to build relationships that would keep other companies and government ministries from simply stealing Microsoft products. By later stages of the filming, he was directing Google's operations in China. Very recently, he left to form his own VC firm. This clip concentrates on what he did with Microsoft; the whole series covers other companies' answers to the piracy problem.
Doing Business in China: As Good as Their Word
Next up in the
Doing Business in China series, a look at the implications of the heavily freighted term
guanxi -- 关系, usually rendered in English as "relationship" and often thought by Westerners to indicate the shadier senses of that term. As the interviewees in this clip indicate, the emphasis on
guanxi has evolved in response to China's particular circumstances -- especially, the centuries-long absence of an effective legal system. In the video series as a whole, we talk about the ways in which it persists, and doesn't, in modern China.
Doing Business in China: Porcelain Skin
Next installment in the
Doing Business in China series: a look at the cosmetics business in China, in particular the very strong market for skin-whitening creams.
The desirability of "porcelain skin" in China -- like the analogous light-skin beauty images in Japan, the Philippines, much of Southeast Asia, much of India, and much of everyplace else -- has a variety of origins, largely in the tangled realm of basic color prejudice. In this clip we look briefly at a more straightforward source: the association in Chinese history between dark, tanned skin and a manual-labor, agricultural background -- which made untanned, light skin a marker of privilege and status. In practical terms this has significant business implications for cosmetics firms, as the clip suggests.
Doing Business in China: The Elusive Chinese Internet
Next up in the Doing Business in China
series: what to make of the positive and negative effects of China's embrace of the internet. My Atlantic article about the subject last year is
here; previous entries about the series
here. This clip, and the related parts of the series, go into some of the related and subsequent developments.
DVD series: The World's Factory
Next up in the Doing Business in China
series (previous entries
here): a look at China's factories.
What I like about this segment (not including the load of industrial goo slathered on my hair by a well-meaning Shanghai stylist just before filming, but I digress) is its emphasis on the elements
other than cheap labor that have been crucial to China's manufacturing success. Yes, $10-a-day factory wages give Chinese producers a big edge. As I explained in the magazine
two years ago, they also affect the way the whole production process is planned and laid out. Eg: Some functions that would always be mechanized in the US, Japan, or Europe are done by hand in China, because the cost of the machines isn't worth it. This has its disadvantages, yet it also can allow Chinese factories to switch from product to product much faster than a more "modern" facility could.
But there are a lot of places with much cheaper wage rates than China now. The Chinese advantage over such places -- Cambodia, Bangladesh, much of Africa -- is the combination of relatively cheap labor and absolutely superb production infrastructure. Ports, industrial zones, highways headed to airports, whatever else it takes. This clip mentions the issue; the whole
series goes into it at some length, and gives you an idea of what these factories look like on the inside.
DVD Series: Carrots in the Washing Machine
Here's the third clip from the
Doing Business in China series; previous ones
here. All the clips are my favorites, but this one is a particular favorite. It's a look at one of the big unknown issues for China's commercial future: whether, how, and when its companies can rise out of the pure low-cost commodity-supplier role to have valuable brand names of their own.
The starting point is the "white goods" manufacturer Haier, which absolutely dominates the Chinese domestic market for washers, fridges, and so on and is becoming better known world wide. The segment title refers to one of its breakthrough innovations. Bonus in this clip: a cameo of Kai-Fu Lee, who once directed Microsoft's research labs in Beijing, and who until last week headed Google's offices in China, before resigning to set up his own VC firm. I first met him when I worked at Microsoft ten years ago and saw him frequently in China. More later; enjoy this clip for now.
DVD series: The Two Chinas
Here is the second in the series of "
Doing Business in China" clips. As I have argued many many times, most recently
here, the first step toward sanity in dealing with "China" is to recognize that there are dozens, hundreds, perhaps tens of thousands of separate realities all lumped together under that one label. This clip eases us into that concept by talking about the first big division -- between the modern, urban China we mainly hear about in the outside world, and the very different place where most Chinese citizens actually live. Click "play" for more....
The Real China
Starting this week and through the fall, the Atlantic's site will have a series of clips from the DVD series "
Doing Business in China" in which I was involved before moving back to the United States. I'll have more to say shortly about the background of the project, and what I view as its potential importance. For now I'll just say thanks to: Bob Schapiro and Dovar Chen, who figured out how to get the original and quite startling video footage inside Chinese factories, bureaucracies, stores, etc over the past few years; Joe Nocera of the New York Times, who appears on the films in "what it all means" discussions with me after each segment; and Emily Chang, on-camera co-host. I'll also mention that when we were filming some of the narration in Shanghai, it was hot and humid beyond all belief, and we were standing in direct sun on a rooftop. More to come, and I will say that I learned a lot about China through the process of working on this project.
