China Part I: The World is Flat
OK, long time no write. Try to do better :-)
Coming home from a week business trip in China that was so packed with experiences it feels like a month! Most of my trips in the past have been to Beijing, but this time I really had some opportunities to see more of the country, with visits to Chengdu and Shanghai. We saw a lot of customers, business partners, and did IBM internal reviews and also had a little time for sightseeing and shopping.
China has changed enormously in the past 5 years – of course anyone who reads these days knows that. But I find it interesting to note how the impressions I’ve formed from reading about a place compare with the actual experience of being there – and in the case of China, I think you have to go there to really understand what is happening. First of all, the world really is flat – the flow of culture, brands, goods, and services is amazing and sometimes disconcerting. Chengdu is the capital of Sichuan province, which I’ve always thought of as the ‘wild west’ of China. But downtown is bustling and urban, with stores like Hugo Boss and Louis Vuitton. The largest hospital in the world is in Chengdu – Huaxi hospital has 3600 beds now and will have 4200 by end of 2007. My niece and nephew who are opposed to the commercialization of rural America, especially the ‘stinky WalMart’ will be sad to know that Sam’s Club is quite popular in Beijing. And I’m told there’s a Starbucks in the Forbidden City now (Xing ba ke – Xing being the word for ‘star’ and ba ke being phonetic for ‘bucks’!). Of course it is only to be expected that ‘ke kou ke le’ (Coca Cola) is the most popular drink! (No diet yet, though!) (Click here for Pinyin pronunciation guide.)
The Chinese are incredibly brand-conscious and participating in Western-style business with a vengeance. It is hard to imagine how people so financially savvy, commerce-oriented, and appreciative of the finer things in life could have lived under communism for as long as they did. People in China are enjoying having money and the freedom to spend it on things they never dreamed they might own like automobiles and washing machines. Mercedes and BMW have ‘joint ventures’ that are producing cars in China which will still be expensive, but more affordable than the imported models. We visited a company that does pharmaceutical development and is building a business brokering Chinese manufacturing capability for pharmaceuticals to Western biotech and global pharma companies. They have just opened the largest animal facility in China for pre-clinical testing and have access to a network of 20,000 Chinese manufacturers, who are laser-focused on getting certified by the US FDA.
Shanghai is like a young New York – the hustle and bustle the same, elegant shops and a sense of style and design that is everywhere. A Chinese fashion industry is emerging, and I expect that we will increasingly see shops on Fifth Avenue that come not from European design houses, but the new design houses of Shanghai. I guess the good news is that branding can go in both directions! Certainly that’s good news for China – it’s not just about low cost manufacturing anymore, it’s increasingly going to be about value-added brands and innovation which somehow we’ve thought of as characteristic of American or European or (more recently) Japanese business. But look out – here comes China!
Coming home from a week business trip in China that was so packed with experiences it feels like a month! Most of my trips in the past have been to Beijing, but this time I really had some opportunities to see more of the country, with visits to Chengdu and Shanghai. We saw a lot of customers, business partners, and did IBM internal reviews and also had a little time for sightseeing and shopping.
China has changed enormously in the past 5 years – of course anyone who reads these days knows that. But I find it interesting to note how the impressions I’ve formed from reading about a place compare with the actual experience of being there – and in the case of China, I think you have to go there to really understand what is happening. First of all, the world really is flat – the flow of culture, brands, goods, and services is amazing and sometimes disconcerting. Chengdu is the capital of Sichuan province, which I’ve always thought of as the ‘wild west’ of China. But downtown is bustling and urban, with stores like Hugo Boss and Louis Vuitton. The largest hospital in the world is in Chengdu – Huaxi hospital has 3600 beds now and will have 4200 by end of 2007. My niece and nephew who are opposed to the commercialization of rural America, especially the ‘stinky WalMart’ will be sad to know that Sam’s Club is quite popular in Beijing. And I’m told there’s a Starbucks in the Forbidden City now (Xing ba ke – Xing being the word for ‘star’ and ba ke being phonetic for ‘bucks’!). Of course it is only to be expected that ‘ke kou ke le’ (Coca Cola) is the most popular drink! (No diet yet, though!) (Click here for Pinyin pronunciation guide.)
The Chinese are incredibly brand-conscious and participating in Western-style business with a vengeance. It is hard to imagine how people so financially savvy, commerce-oriented, and appreciative of the finer things in life could have lived under communism for as long as they did. People in China are enjoying having money and the freedom to spend it on things they never dreamed they might own like automobiles and washing machines. Mercedes and BMW have ‘joint ventures’ that are producing cars in China which will still be expensive, but more affordable than the imported models. We visited a company that does pharmaceutical development and is building a business brokering Chinese manufacturing capability for pharmaceuticals to Western biotech and global pharma companies. They have just opened the largest animal facility in China for pre-clinical testing and have access to a network of 20,000 Chinese manufacturers, who are laser-focused on getting certified by the US FDA.
Shanghai is like a young New York – the hustle and bustle the same, elegant shops and a sense of style and design that is everywhere. A Chinese fashion industry is emerging, and I expect that we will increasingly see shops on Fifth Avenue that come not from European design houses, but the new design houses of Shanghai. I guess the good news is that branding can go in both directions! Certainly that’s good news for China – it’s not just about low cost manufacturing anymore, it’s increasingly going to be about value-added brands and innovation which somehow we’ve thought of as characteristic of American or European or (more recently) Japanese business. But look out – here comes China!
posted by Carol at 12:20 PM
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