I decided to post on some really significant events in China – events that have had or are having an impact on a huge number of people – i.e. on most Chinese. So what are those events you would ask? Well, here we go
Number 1: The famous Volkswagen SANTANA that all of us China hands have seen on the streets of various Chinese cities and villages, ridden in by ways of a taxi ride, is having a new look – after 29 years of production !!! Can you imagine this? a car model that has survived as a selling vehicle for 29 YEARS!
I looked hard through my photo database and could not find an image — big surprise — sometimes I feel the ubiquitous taxi is in each of my photos from Beijing or Shanghai….. At any rate, since I could not find one quickly I found an image of an old one on the web, and here it is:
And here it is (below) the new look of the next generation SANTANA:
Number 2: China and the US are in trade talks again. Now that the new Chinese leadership is in power, one can wonder what impact that will have on the next iteration of China-US trade relations…
Here are some commentaries from the BBC:
These talks are happening at the same time that China is searching for ways to reduce its reliance on exports for the foundation of its economic growth and the country's focus on propping up the middle class — the growing set of people capable of becoming solid consumers and drivers of economic growth for the country.
This is also a time when China is focusing increasing effort on improving its urban planning — based on statistics I have seen in the Chinese media, the urban population of the country is finally exceeding the rural one — with this change over occuring in 2012. By some predictions China will have 70% of its population living in major urban areas by year 2030 — this is a very big deal as the country has to figure out how to build cities with stable and functioning infrastructre (think about the floods and drownings that happened in Beijing just a few months ago) to support such urban growth.
Oh, well, I think the Chinese government will come up with a solution — not sure it will be the most "elegant" one but it will be there… Thoughts?
Well folks Austin, a town my family and I have called home for over 10 years (apart from living in Asia and Europe) is now the official site of a FORMULA 1 UNITED STATES GRAND PRIX™ races. The races are certainly bringing another set of exciting events to Austin, but even more importantly, they are adding significant economic activity to the city. Here are some stats (from CoTA's own estimates / documents):
"…CoTA-hosted events are projected to generate an annual economic impact of $400 million to $500 million, equating to $4 billion to $5 billion over 10 years for Texas. The CoTA-hosted FORMULA 1 UNITED STATES GRAND PRIX™ will attract as many as 300,000 people each Grand Prix weekend, with an estimated 80 percent of attendees coming from outside Texas." (Source: http://circuitoftheamericas.com/economic-impact)
The venue is pretty amazing — here are links to information you may need (from CoTA's web site):
Earlier in August this new smartphone — the Xiaomi — was launched in China. Why is this news? Well because the Xiaomi is built as a competitor to the Apple iPhone! The Xiaomi's new model is the MI2 (which comes after a successful Mi1 which has been on sale since October 2011)
In speaking with friends of mine in Shanghai, the Xiaomi has certainly caught attention – even among the expat community. This smartphone is going to be sold at RMB1999 which is about one half of the price of the iPhone!
There have been a number of reports in the last several months about the fact that 2012 will be a record year for China's Overseas Direct Investment. Per Zhang Yansheng, secretary-general of the Academic Committee of China's National Development and Reform Commission, China's overseas direct investment (ODI) has grown at a rate of 40+% annually between 2006 and 2010. Here are some of the main points that Xinhua News agency summarized from recent Chinese Government directives:
Overseas investment from Chinese companies will see "explosive growth" over the next decade, as the government has reaffirmed a strategy to encourage enterprises to invest overseas, experts said.
The strategy to grow ODI was reiterated in the country's official 12th Five-year Plan (2011-2015), which was endorsed by China's top legislature in March 2011.
In Q1'2012 China invested $16.55B overseas (as non-financial investments) with $6.2B being M&A activities per report from China's Ministry of Commerce; The Q1'12 results represented a growth of 95% in comparison to Q1'2011;
At the same time there are reports showing that the ODI is not all smooth sailing for the Chinese investors. Per report published by People's Daily, "By the end of last year, China suffered a net loss of $26.8 billion in overseas investments," said Zhou Zhongshu, vice president of the China International Council for the Promotion of Multinational Corporations, at a Beijing conference in late June 2012.
One example of this is the investment Geely Automotive made in Manganese Bronze – the manufacturer of London's well known taxi cab vehicles…..Now you can see those on the streets of Beijing…Here is one (courtesy of Shanghai List)
Now, the key question is "Why the strong growth of investments?" In my view this is very heavily driven by the strategy of the Chinese companies and Chinese Government to build up its Intellectual Property (IP) portfolio – no better way to do so. The ODI and M&A activites are adding significant access for the Chinese entities to both European market and IP rights which in the future will provide nice platform for expansion into the global market.
BEIJING, June 7 (Xinhua) — All 7,000 of Beijing's traffic police officers were deployed around the city Thursday to keep the roads quiet during the annual national college entrance exam, the largest of their kind in the world.
The officers are ready to offer immediate assistance to students and their parents, said a spokesman from the command center of the Beijing Traffic Management Bureau under the Beijing Municipal Public Security Bureau.
"Although the number of vehicles in Beijing has reached 5.09 million, traffic on the first day of the exam was much better than that of past years, as many people chose to leave their homes earlier than usual and skip rush hour," the spokesman said.
Police escorted 18 students who were almost late for the exam to their exam venues on Thursday, he said.
The Beijing summit of the Shanghai Cooperation Organization (SCO), which was held Wednesday and Thursday, overlapped with the start of the examination period, resulting in extra traffic cops being deployed to ensure safe and smooth traffic.
Approximately 9.15 million people will take the exams to vie for 6.85 million spots at the country's universities and colleges. About three out of four applicants will be admitted by universities.
I remember the days when I was near a test site — a school building usually and the many parents milled outside and of course your friendly police folks who did not allow taxis or personal or company cars to drive by the site as that was a disturbance in terms of noise etc. Honestly that used to be rather amusing to me — but then I thought about the HUGE ramifications the Gao Kao had on the students taking it and all of sudden I thought — OK, fine, I will conform and walk on tip toes too by the building…
By some estimates there are about 9-million students taking the exam. I came across this BBC article on-line that actually has a bunch of videos that can give you a good view of the exam and its importance in the life in China:
The big question though that gets debate a lot in China across all layers of society is whether the Gao Kao really / truly shows the aptitude of students for a given profession and/or major. There is a lot of discusion about the fact that in their daily preparations for university majority of students focus too much on the actual exam and the techniques to achieve a better score rather than on actual learning…. Oh, well that I think is the age old debate. But for sure there could be some better way to approach the entrance exams than the mass hysteria and big psychological impact the current Gao Kao has on students and parents.
Anyone like Electric Vehicles? Anyone like millions of electric cars? Oh, no….too many questions. Well, that is how it feels in the last couple years based on multitude of announcements from many car companies around the globe. China has been especially focused on the technology and electric cars specifically. Between 2009 and 2011 there have been many announcements from manufacturers that drove announcements to support also China's government plans for rapid growth in the direction of clean vehicles.
China is aiming to put more than a million electric vehicles onto the road each year by 2015, according to the state-run People's Daily. It claims that new plans for the auto industry are about to be published and will make "new energy" – electric and hybrid electric – vehicles a national priority.
TIANJIN, China — Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that.
SHENZHEN, China — It would seem like a lousy time to get into the car business, especially if you're a little-known company in the developing world. No start-up has grown into a major auto maker in at least half a century.
So these were the big plans — reading through the articles above you can see all sort of big plans — build and sell up to 500K electric cars per year in China by 2015
Subsequently ramp up to 5M vehicles per year by 2020!!! So very ambitious plans no doubt.
The reality today is VERY DIFFERENT — BYD has apparently sold only 300 taxis and 200 electric busses in Shenzhen. So WHY is that?
The answer is actually closer to being simple than you think. All in all electric cars are VERY expensive. According to some estimates BYD's vehicles will have to drop 40% in price before they become a real alternative to fuel powered vehicles….And then there are many other hurdles like life of batteries' sizes, weight and reliability…
So all in all this has been a bit of a PR disaster since the promise of electric vehicles, green and energy use reductions, were made so public and garnererd so much attention that rebuffing now will be a problem by itsel
In conclusion — is the idea still valid? YES (resounding)!!! The big question is - when will these costs etc go down so we can all buy an electric car and be NICE!
Several weeks ago I landed in Shenzhen and rushed off to the taxi stand outside the airport. Soon enough I jumped into a cab and headed to Nanshan district to my hotel. Once I settled in the cab I noticed with a surprise two things:
The taxi cab driver was a young guy (not actually a surprise but it became one once paired with the second item)
The driver had all sort of Lei Feng memorabilia in his car — a sticker on the steering wheel, a flag with Lei Feng's face hanging from the rear view mirror, etc.
So, I could not exactly miss the opportunity to chat with the driver about this. I had not seen or heard about Lei Feng since the early 1990s when I was a student in China.
Then I also came across a whole set of media write-ups and TV articles on the subject. Here is a video clip from CCTV :
Then I came across a whole Web site dedicated to Lei Feng. I decided — this is getting too much — but then I thought about it and sure enough – it makes sense. The Chinese authorities certainly need a role model and a social stimulus that can divert attention from all the Western influences of brands (I wonder how many Chinese can spell many of the fancy brands well — I bet many) to the "wholesome aspect of self sacrifice" for the community and country.
Here is one more video — this time on Lei Feng's story:
This phenomenon is certainly having a new effect in China – you may not notice it immediately but there are certainly attempts by the local and Central Gov't to get people acting accordingly. I have seen enough public medical check stations across Beijing (and other cities), also organized clean up efforts, to know that the attempts are being made….
Now if we can only figure out a way in which Lei Feng is also impemented in business? How about we institute a day when vendors and customers work for each other Just kidding…
China Daily published the results of its so called “2011 Amazing China” survey – the only survey which is apparently 100% based on expat inputs / feedback. The results are actually both surprising and sort of not — i.e. expected. The “expected” part is that cities like Beijing, Shanghai, Shenzhen were expected to do well in the rankings because they are home (especially Beijing) to largest concentration of expats and as a result they offer more schooling options as well as work opportunities.
Some of the inputs / results are surprising — for example, Beijing was ranked high and feedback identified in the article is that “…The strong efforts being made to improve air quality and traffic control will make Beĳing even more enjoyable,” said William Peter Poirier, vice president of Westinghouse Electric and recipient of the 2009 Friendship Award.”
I am not sure what “traffic control” is being referred to in the quote above, but in my opinion Beijing has horrible and disorganized and congested traffic. I would like to see how Mr. Poirier will flag down a cab in downtown Beijing….And how he can drive his car during most hours of the day in Beijing… My answer is “Bad experience, not possible, frustrating….”
At the same time Shenzhen certainly has much more organized and low stress traffic during most hours of the day….
The article also published a map of the key cities:
Over the last several years, I have held the belief and observation that China, especially the coastal areas of the country, is quickly becoming almost a different country within the vast nation. Different? Yes, in terms of standard of living, wages / labor costs, and no more a place well known for vast factories churning out products at super low cost. The reality is that the big cities on the coast of China are quickly becoming populated with a large middle class and standard of living (and costs) are going up fast. Just think at a high level: * cost of fuel (gasoline) is almost the same as in the US * real estate costs are higher than many places (large cities) in the US * food prices are moving up fast with many local restaurants charging for entries similar to what prices are in the US
Recently CNBC had a short news article about that as well:
This time the luxury products are not just fancy watches, glasses, purses…..etc. Now we are talking SUPER-RICH. The China billionaires have arrived! Travel sites like Ctrip.com are now offering travel for the rich. Check this out — the image below is a link to the actual brochure for an Around the World trip offered at RMB 1.01M !!! Divide it by 6.25 approximately and you get US$161.6K — YES, I kid you not. This is the cost of this exclusive trip offered to 15 people only.
Are you ready for an exclusive vacation - travel for a mere $161K!!!
(click above to get to the actual Ctrip.com page with the details in Chinese)