December 27, 2010

7 Things You Need to Know About China

The Stanford Graduate School of Business 2010 Global Study Trip to China included two weeks on the ground in Hong Kong, Shenzhen, Shanghai, and Beijing. After meetings with scores of executives from 19 different organizations across a variety of industries and in-depth dinner conversations with alums and friends, I felt like I’d learned a lot about this incredibly complex and changing country. A few days of reflection and a re-read of 28 pages of notes in impossibly small script, I’ve synthesized 7 themes from this eye-opening trip:


1. Despite lofty goals, Chinese companies aren’t going to take over the world just yet.
Early in the trip, I noticed something interesting about the behemoth companies we visited: like most large, successful businesses in China, they had risen to power by keenly tailoring their products to the Chinese consumer, and they were quick to criticize American companies who had failed to do the same. In particular, they pointed out the hubris of companies like eBay which seemed to insist that successful products in their home country would translate seamlessly into the Chinese market. Although hyperbolic, a statement from an Innovation Works executive summed up the trend: “Zero foreign companies have been successful in China.” After learning about the uniqueness of the Chinese consumer, I understand this criticism. Many of the companies we met with achieved noteworthy financial scale by creating customized products that the massive Chinese population loves, and they have aggressive growth goals that include expansion abroad. Automaker BYD, Internet powerhouse Tencent, gaming leader SNDA, supply chain expert Li & Fung, and steel manufacturer Baosteel all shared goals of international expansion in their presentations. But when pressed about their strategies for growth, they seemed to exhibit the same hubris they criticized in American companies. “Our products are successful in China,” one executive said, “so we will bring the exact same technology to other markets.” This seemingly inconsistent message smacks of the unsophistication one Chinese national and GSB grad told me about at dinner. She suggested that Chinese companies aren’t yet ready to expand aggressively beyond their borders. They certainly deserve respect for their success in China, but they’re somewhat blind to the fact that they’ve operated in an anomalous market with a very unique government and approach to IP. I started to think that “good in China” doesn’t necessarily mean “good everywhere.” A media executive put it best when he said, “Chinese companies are world-sized, but they’re not yet world class.” He suggested that unless a company has a truly innovative technology or hard products, it will struggle outside of China. When asked if Chinese companies will be successful abroad, another executive at Innovation Works said “probably not anytime soon.” He advised that they look first to similar markets with young populations (Brazil, Russia) and other developing countries (in Southeast Asia) before an aggressive push into western, developed markets. My takeaway from the trip was that Chinese companies are definitely big and successful, but – at least in the short to medium term – I’m going to heavily discount the western media’s fearful handwringing about Chinese companies taking over the world.

2. “Real China” isn’t in the big cities.
Time and time again, we were told that second-, third-, and fourth-tier cities are where it’s at in China. Representatives from the American Chamber of Commerce in Shanghai and executives at Innovation Works both warned the aspiring entrepreneurs in the room that “almost every business idea you could have has already been done in the big cities.” They suggested looking at interior China for the real growth opportunities. When asked about cost competition challenging China’s long-time position as the world’s top manufacturer, a representative from Li & Fung said, “Who can replace China? China!” and went on to praise businesses in the interior cities who are driving down prices and “getting better.” An executive from LVMH talked about the raging success of luxury stores in these cities and what it tells us about China’s diversity: “Different languages, different cultures, different food…it all means different tastes and a need to adapt when you move inland.” A CCTV executive talked about “50km Beyond,” his suggestion to westerners that they travel 50 km beyond the borders of the “wealthy and beautiful” metros of Shanghai and Beijing to find the real China.

3. The nouveau riche are driving China’s economy.
“New money” consumers and China’s growing middle class are the engine behind much of China’s recent economic strength, and they will serve as an attractive market for new companies looking to supply to China rather than just source from China. Executives from both HSBC and the Hong Kong Monetary Authority jokingly referred to the Hong Kong stereotype that mainlanders are “country bumpkins,” but quickly acknowledged that the impression is changing as dollars increasingly flood out of Chinese tourists’ wallets and into Hong Kong’s retail economy. What are they buying? Both speakers pointed out the window toward Hong Kong’s Central district where streets are lined with designer retail shops. We heard more direct from the source – an executive at LVMH’s China’s branch: “China is a country full of nouveau riche.” Thirty years ago, he told us, the lifetime maximum currency conversion from Chinese RMB to US Dollars was $30.00. Now it’s $50,000 per year. In just a few decades, China has gone from a country where no one has personal cars, to the largest auto market in the world. The demand for luxury goods, even just aspirations for them, has driven immense growth for LVMH’s 60 premium brands. At Innovation Works, an executive told us about the “newly rich social phenomenon” in which women, in particular, are buying cosmetics, fashion, and lingerie – he suggested that businesses catering to this demographic may do very well entering China.

4. The western media sometimes gets it wrong.
Although it’s difficult to parse out everyone’s biases, particularly when some speakers are employed by state-owned enterprises, we heard from several different sources that media coverage in the developed world frequently misrepresents China and its culture. An HSBC executive closed her remarks with a warning: “Don’t believe everything you see on CNN.” Although she was educated in the US, she was highly critical of our media's representation of Chinese news stories, in particular the Chinese railway from Beijing to Tibet and China’s role in African development. A leader at a state-owned media company waived an issue of The Economist in front of the group saying that western media focuses too much on prosperous China and forms incorrect opinions. “The government’s control is exacerbated and overemphasized in the western media. The so-called free press in the west is questionable – they’re biased and inaccurate.” He illustrated his perspective when asked about China's coverage of Nobel Prize winner Liu Xiaobo. “We did report on this criminal receiving the award, but it is clear that the Nobel Prize has been politicized. Mr. Liu’s contribution to China has been virtually zero – he’s a big self-promoter.” If you think state-owned media representatives may be biased, I have another example from someone with a finger on the pulse of Chinese dissonance with government censorship -- even he shared similar perspectives on this topic. A blogger at ChinaSMACK, who also moonlights for NPR, lamented US and European media’s tendency to mold Chinese stories into a western perspective. As an example of those biases, he cited an article in the UK’s Telegraph that misinterpreted a Chinese internet post, overlooking its intended satire. According to the blogger, Chinese netizens cope with censorship by hiding a lot in their satire and humor. Especially coming from a society that greatly values what it considers to be the freest press in the world, it can be easy for us to dismiss the Chinese perspective that our media is biased. However, seeing the country for myself and hearing from folks on the ground has inspired me to question more critically and realize that everyone has a bias.

5. The vibrant secondary market for virtual goods is a metaphor for the Chinese economy.
In an environment where consumer credit cards are uncommon and IP protection is limited, profitable online business models require innovative product design. Chinese internet companies have thrived by pioneering the market for virtual goods and micropayments. Tencent brought in revenues of $1.8B in 2009, driven overwhelmingly (93%) by micropayments for “differentiated privileges” in their popular instant messaging and social networking platforms. The market for these virtual products (as simple as customizing the color of your user name) feels a lot like a market for “real” goods and services. Similarly, SNDA’s come-stay-pay model for monetizing online games has spurred competitive second markets for their products, so lucrative that it attracts users who only play to resell their virtual achievements. But even though these markets for virtual goods and services feel like a real economy, it’s a false sense of a free market. Ultimately, the availability (and hence, the value) of these products is completely controlled by product architects at companies like Tencent and SNDA. What on the surface looks and feels like a free market is actually a planned economy whose adherence to capitalistic principles is entirely dependent on the whims of its omnipotent governing body. Sound familiar? Especially given all the hubbub about virtual markets in China, it really struck me a demonstrative meta-economy within an economy.

6. Despite its differences from the west, the one-party system seems to work for China.
An executive at HSBC admitted that corruption is a problem, especially at the local levels, but she can’t see a multi-party system working in China at this stage. "Despite its shortcomings, the Chinese government has lifted millions out of poverty in the last two decades – no small feat. If change comes, it will be slow,” she explained. “Students will push for evolution, not revolution.” In her opinion, there’s still too much complexity to manage, and they don’t have time for bi-partisan politicking and trying to appeal to the masses. I brought up this idea with our trip leader’s husband, a Chinese national with a seriously respectable background in finance and government. He, too, was honest about the government’s weaknesses, but when I asked him about the upside benefits he shared some interesting insight. I suggested that because a one-party system doesn’t need to worry about catering to the public’s short-term whims, it may be better suited to making the hard, long-term decisions for the country. He agreed, citing the government’s mandated energy usage reductions for municipalities – a forward-looking policy that appears to be designed with the public’s best interest in mind, a task that seems almost impossible for American politicians who kowtow to interest groups. Also on the topic of the public good, representatives from the Chinese media had similar thoughts on the government’s role in preserving public good. Although one man claimed to “never experience pressure" to change his reporting, the government's desire for “harmonious” content was evident in his opinions on the role of journalists in society. “Journalists need to report the facts,” one executive explained, “but they also need to make the world better. Stories that divide people and upset them are not suitable for the public…I almost wish the government would regulate more. Some of the content in the citizen press is downright crazy.” Although this notion smacks of censorship to an American sensibility, it’s worth considering how this approach may have helped maintain stability in the country. I’m not saying I agree with this perspective, but some very smart people seemed to think there were some tangible benefits to a controlling, one-party political system.

7. Pollution is one of the biggest challenges facing China.
In the west we frequently point to censorship, human rights violations, and poverty as China’s biggest hurdles in the coming decade, but environmental degradation came up many times in our meetings with Chinese  leaders. Executives at HSBC, the Hong Kong Monetary Authority, and in the government all named pollution as one of China’s greatest weaknesses. BYD and State Grid shared their concern for China’s consumption of fossil fuels and its effect on the environment. I read a lot about China’s pollution problem in the lead-up to the Beijing Olympics, so I was interested to see it for myself. I have to say, it was worse than I expected. I lived in Southern California for the last decade, so I’m no stranger to smog and pollution, but China brought a whole new level of gross to my breathing experience. Views from the Hong Kong Monetary Authority and the Shanghai World Financial Center observation tower were limited due to the thick layer of brown sludge in the air. But nothing could have prepared me for Beijing. When we stepped off the plane at the airport, it was like huffing an ashtray. The air was thick with smoke and our delicate California lungs ached. Between burnt orange sunrises and sunsets, there were times we couldn’t see more than a couple blocks down the street. It’s just one of many hurdles the country needs to overcome, but pollution in light of China’s burgeoning population – particularly in the big cities – is definitely near the top of the list.


other china trip posts

stanford trip: beijing

the weather forecast for beijing literally called for smoke, and i have to agree that stepping off the plane was like huffing an ashtray. luckily, the weather cleared up a bit, and on sunday morning, we visited tienanman square and the forbidden city.





one of our trip tour guides was a high school student not far from tienanmen square during the massacre, so it was really interesting to hear his perspective on living through the event as a chinese citizen. while we listened to him on the bus, we snacked on some local potato chip flavors: blueberry and numb & spicy hot pot flavor. intense and stimulating.


in the afternoon, 40+ pandas descended upon the great wall of china, which, incidentally, is tremendously steep. i was not adequately prepared for the serious workout that would ensue. the photos i've seen before all make the topography seem like wide, gentle rolling hills, but we fully hiked to the top of a mountain -- ancient stairmaster style.


the wall is covered in graffiti, and since the chinese character for jong (same as for chang) is the most common surname in the world, i saw my name everywhere.


highlights of the great wall trek included: my mid-climb breakdown in which i overheated and had to strip down to my skivvies in front of a horde of tourists, and our iconic “pandas on the great wall” photo snapped by our talented trip photographer mia mabanta.

photo by mia mabanta
after some naps and showers, we headed out to partyworld for a night of absurd karaoke.


monday morning, we returned to the meeting circuit, stopping first at CCTV to meet with some very high level folks who, despite being a state-owned enterprise, talked about the station’s mission to be objective and independent with “no favor or fear.” one executive suggested that although a journalist’s goal is to report the facts, he also has a responsibility to report stories that promote the greater good, uniting people rather than dividing them.


we did a studio tour and saw, among other things, our trip leader’s husband on TV (he joined us for dinner back in shanghai) and the elaborate stage preparations for CCTV’s chinese new year special – the most watched TV show in china. on the way out of the studio, we saw many people from the provinces that camp out in front of CCTV hoping to get their stories covered.


our lunch included a chinese ground pepper that makes your tongue numb, and we finished the afternoon with a meeting at state grid of china – the world's largest electric power company. mia and i snuck into the vip lounge for a little photo shoot:

photo by mia mabanta
that evening, maria and i checked out a local grocery store where we picked up some crab and seaweed pringles, followed by dinner at the street market when i snacked on sea urchin, scorpions, and dumplings. others ate sea horses, starfish, pupa, and snakes. yum.


one of the most interesting meetings of the trip was on tuesday morning with an NPR reporter and blogger from chinaSMACK, an english-language news source that translates the hottest stories from the chinese web. the blogger had great insight into chinese internet culture, including some of the politically-charged satirical memes used to evade government censoring (rivercrab, eluding the cat, doing pushups, “my dad is li gang”).

next we visited start-up incubator-cum-early-stage-fund innovation works where they’re trying to recreate the silicon valley environment that allows start-ups to thrive including embracing failure, encouraging adaptability, and providing mentorship from successful entrepreneurs. after the meeting, we took a walk through the offices where chinese entrepreneurs were hard at work building, overwhelmingly, products and tools for android.

we finished the evening at a coffee chat with a representative from china investment corporation who shared this money quote: “in china, you have to work hard, otherwise you’ll starve. we’ve depleted our resources, not like in africa where you can just go pick an avocado off a tree.

local alumni and new students joined us for dinner, and then we took in some nightlife at susie wong’s (where it was salsa night, apparently). later at vic’s nightclub, i saw some of the strangest christmas decorations yet:


for our final day of meetings, we started at china mobile, china’s leading mobile services provider. their experience center tour was especially cool, as they had exhibits for several of their “internet of things” initiative that uses innovative mobile technology to solve real world challenges related to farming, livestock tracking, and energy usage. they also had a grocery store demo of their RFID-tagged products that can be scanned and invoiced without being taken out of the shopping cart. very cool.


we had a delicious final meeting at beijing’s exclusive LAN club, operated by south beauty, china’s leading luxury restaurant empire. designed by philippe starck, the LAN club’s d├ęcor was a kick:


having made a career switch after an unfulfilling stint in management consulting, the south beauty executive we met with joked about her perspective on picking a job: “if you really love money, investment banking, PE, and VC will give you much joy.” she closed her remarks with some discussion of how industrialization, centralized procurement, and localized KPIs help south beauty to manage their growing portfolio of premium dining establishments.

the LAN club is right across the street from beijing’s famous silk market where you can get everything from a fake LV bag to a pair of knee-high boots. after perusing 5 floors of goodies, we geared up for a dinner of peking duck with a side of chinese acrobatics. already nostalgic for our 10-day china-a-thon, we award superlatives to everyone in the group.

photo by mia mabanta
after loading up at breakfast on thursday morning, i headed to the beijing airport to begin my 50+ hour trek to canada for christmas that included, among other things, a 22 hour layover in the tokyo airport. such is the nature of flying on miles, and, despite the brutal travel schedule, i’m super grateful to have stockpiled miles from my consulting days to make this trip possible.

in conclusion...china: eye-opening. fascinating. delicious.

other china trip posts
hong kong (dec 12 - dec 14)
shenzhen (dec 14)
shanghai (dec 14 - dec 18)
beijing (dec 18 - dec 23)
7 things you need to know about china

December 26, 2010

stanford trip: shanghai

first stop in shanghai was the shanghai stock exchange, which lacked content because our contact had a last minute conflict. we took a tour of the mezzanine to see their “showroom” (very common in chinese office buildings, we’d soon learn) with wall placards detailing the exchange's history. we had views of the trading floor, which was largely empty except for a few administrators playing solitaire and aisles of archaic computers.


lunch was with some reps from the american chamber of commerce in shanghai who reminded us that everything is negotiable in china: contracts, taxes, everything. they also emphasized the need for american companies to tailor their business and products to the chinese market by following the “6 Ds”: due diligence, due diligence, due diligence. some interesting, but unverified, stats they quoted: 65% of US congressmen don’t have a passport or have never left the country, coke has over 355 flavors of fanta across the world (a sign that they do their due diligence in local markets), and 85% of the software used by the chinese government is pirated.

it just started snowing when we arrived at GE’s china technology center.


after a showroom tour, there was a presentation that definitely won the award for best closing slide (that’s the technology center in the background):


for dinner, we were fortunate to have an 11-course meal at the one of the nicest restaurants in shanghai, villa du lac.


dinner was organized by the husband of one of our trip leaders – we already recognized him when joined us for dinner since we’d seen his photo on the wall of the stock exchange earlier in the day. dinner was exquisite (though i politely refused the shark’s fin soup, much to the chagrin of the confounded wait staff), and the conversation was even better. our host was clearly a sharp guy with lots of great insight into china’s development and a keen interest in learning more about american politics. he was very straightforward about china’s weaknesses – pollution, human rights record, and government’s rule-by-fear. i asked him about the upside: is a one-party government better able to make the hard, long-term policy decisions needed to confront challenges like climate change? he said yes and pointed to the governments required energy reduction goals for cities.

we had two birthdays in the group. highlighting our diversity, we followed the cake with renditions of the “happy birthday” song in almost a dozen languages. the crew finished off the evening at muse2, a nightclub where johnny walker and green tea was the house drink.



unsuspecting tourists who tried to snap photos of the hourly burlesque show were greeted with a green laser pointer to the eyeball.


after the night degraded into a ice cube fight and several unsuccessful attempts by a few of our young men to engage with the russian models at the next table, we were asked to leave the club. after a long wait at coat check, my friend maria and i employed a “facilitating payment,” secured our group’s belongings, and headed back to the hotel.

day two started at bain capital, where it seemed that fear of “losing respect in the cafeteria” drove employees to close good deals. we learned that “everyone in china is doing PE,” so much so that a developer in beijing was only granted his class A zoning license after he agreed to name the area PE plaza. after the bain meeting, we walked across the street to the shanghai world financial center for spectacular views from the highest observation deck in the world.


we had lunch near the base of the oriental pearl tower.


our afternoon visit to a steel plant was baller. after a corporate video (“enjoy your wonderful life with steel!”) and some comments, through an interpreter, by the president of their talent development initiative, we all put on hard hats and got to walk through the plant where they made steel sheeting for everything from cars to 1 yuan coins.


we finished the night with a dumpling making competition in which, despite having our hands tied (literally), my team won a free round of drinks. score.

photo by mia mabanta
on friday, a few girls walked around the “antiques” market, which was a treasure trove for assorted curios, including a lovely assortment of communist figurines and a really cute kid putting away a bun.



my favorite item was definitely this plate, which including fluffy kittens under plexiglass. the usage of such an item boggles the mind.


we had lunch at herbal legend, a restaurant promising a perfect balance between yin and yang in all its dishes. i ate some ginko nuts, which were supposed to make me beautiful.


our afternoon meeting at SNDA was one of the best of the trip. the presenter shared really interesting information about the differences between chinese and western consumers, notably an eye tracking study that called out the chinese tendency to scan the entire page instead of just the top corner.


the company rep suggested that this dates back to a time when page loading speeds were slow and users demanded more content all on one page – helps to explain the chinese online aesthetic that so many westerners find cluttered and overwhelming (e.g., this is screenshot of a popular chinese homepage). SNDA made its name with online social gaming, particularly with micropayments, and it designed its product with the chinese user in mind. these products have spurred second markets in which some gamers play only to resell the rewards of their achievements. since the topic was innovation, our host spent a lot of time talking about SNDA's innovative product that allows readers to purchase books one chapter at a time and even pay the author to write customized endings. super interesting model. during our office tour, we saw what looked like a farm behind the building. turns out there are some squatting farmers who refused to give up their land when the office park was built. instead they’re waiting for it to appreciate. in the mean time, they sell organic veggies to the local offices.


after a quick whirlwind through the copy market, the group had dinner with local alums. i sat next to an ’07 GSB grad who runs the feminine care line in china for a consumer products company. fascinating to hear about how the chinese market is different. i also got a lot of great insider perspective on media and internet censorship.

we finished the night at the bund.


surrounded by beautiful views at a rooftop lounge called bar rouge, we watched one of our trip leaders order a flaming cocktail that sent flames roaring down the bar.


our final day in shanghai started at the historic okura garden hotel in the former french club for a meeting with an executive from LVMH. “china is the land of fakes,” he said, “fake milk, fake medicine, fake cigarettes.” pointing out the generational distance in china, he noted the recent turning point: china licensed the show “china’s got talent” – the country’s first legitimate copy show. he talked about starting the luxury goods business in china and building aspirational brands in a country where brands traditionally mean very little. probably because they make up a fair amount of LVMH business, he also talked about the growing nouveau riche in china whose consumption habits are driving all sorts of interesting spending trends.

after lunch in the yuyuan garden, we had a little shopping time. demand side increasing returns kicked into gear big time as the entire group quickly bought up all the panda hats in the market. as we strolled back to the bus, we were quite the spectacle for all the tourists.


by the time our panda pack got to the airport, it was clear the panda hats were here to stay – they made it especially easy to find each other when traveling through crowds.


photo by mia mabanta

stanford trip: shenzhen

we got up early for the drive to shenzhen which included a bridge over oyster gardening cages. after a painless walk through the futian immigration station, we crossed the border into mainland china!

shenzhen is huge. it seemed like we drove forever without leaving the city, which is one of the newest cities in china. it’s home to miles and miles of apartment buildings, more than i had ever seen. our first meeting was with BYD, a battery and automobile manufacturer with headquarters outside the city. BYD received a lot of attention when warren buffett invested 10% in 2008 with an eye toward the company’s stated emphasis on electric vehicles and clean fuels. despite its humble beginnings as a mobile phone battery maker, the company has aggressive goals to become the largest auto maker in the world by 2026. the highlight of the visit were the “marketing” videos they showed us, which painted BYD as an innovative organization poised to save the human race from its own destruction. seriously. they saved the best for last with a promotional video about their corporate social responsibility work in tibet. a medley cover of michael jackson’s “we are the world” served as the soundtrack, replete with an autotuned stanza. after the meeting, we toured their showroom and checked out their model vehicles which were delightfully spacious and comfortable.

traffic in shenzhen made us late for our next meeting, so we got sandwiches on the bus. the food on this trip was some of the best i’ve ever eaten, and with the exception of this one meal, i was exceedingly happy. but those “american-style” sandwiches were downright sketchy. think: crustless whitebread with soggy veggies, mystery lunch meat, and a cold fried egg. in my mind, it was tasty goody’s reciprocal cuisine.

our last meeting in shenzhen was with tencent, the internet giant whose famous penguin mascot was a big hit with our group, particularly when they gave us each a plush penguin in a gift bag. this was definitely one of our more interesting meetings on the trip. tencent runs some of the very top social networking, IM, portal, email, and search websites in china. their success has come largely from scalable monetization schemes. they describe their business model as “providing high quality free services to attract a massive user base, then charging for paid services to address individual needs.” they’re pioneered the online micropayments market with “differentiated privileges” that chinese users are willing to pay for (e.g., pay to have your name show up in blue text). referencing maslow’s hierarchy of needs, one company rep said, “we’re providing self actualization for normal chinese people.” they also shared some tounge-in-cheek jokes about their scale: “the 4 largest countries in the world are china, india, facebook, and QQ” (tencent’s social networking platform). when asked about their perspective on facebook’s potential entry into china one rep said, “the biggest threat to tencent is zuck’s girlfriend.” at the end of the meeting, one of our brave trip leaders asked a provocative question about tencent’s role in chinese online innovation, as they’re sometimes seen as a behemoth that appropriates others’ ideas and (in their own words) “crushes” the competition. they seemed to dodge the question, but did say, “just because we run faster from behind doesn’t mean we’re not innovative.

at the shenzhen airport, lighters were not allowed through security. we encountered some cultural distance when we saw locals pulling lighters out of their bags and just dropping them on the ground – lighters littered the floor throughout the snaking security line. this was particularly funny when we landed in shanghai and exited baggage claim only to find a bin of “free lighters” for the taking.


stanford trip: hong kong

stanford's graduate school of business has a mandatory global experience requirement, which i filled this december break with a trip to china with 40 of my classmates. the trips are included in tuition (thank goodness for financial aid) and are all over the world. i picked china because it's an important growing economy. and because the food is legit.

we started the trip in hong kong where the cultural highlights included: a return to lin heung tea house to battle for dim sum and encourage classmates to eat chicken feet...


...and a visit to the tian tan buddah.




our first meeting was with a top executive at HSBC who studied in the US before returning to china during the first round of foreign direct investment in the mid-1980s. she claimed to have coined term "red chips" to describe privately-owned chinese companies, and had some interesting perspectives on chinese growth, particularly in the financial sector. when asked about potential opportunities with india, she said, "i just don't see the synergy. india looks west, and china looks east." she aired her concerns that western media often gets it wrong and misrepresents china, calling the idea that china is "buying up africa" with colonization intents "laughable." she pointed out that china has been there for years, even back when it had only labor, not capital, to give: "africa has always been friendly to china because china gives without conditions." also, she specifically mentioned the west's coverage of china's railroad from beijing to tibet that implied it was an attempt for the han chinese to settle tibet. money quote: "that's ridiculous! chinese people can't even breathe in tibet."

next we visited li & fung, the largest supply chain company in the world. in 2008, they shipped over 4 billion pieces of goods. 30-40% of mall retailers in the US are li & fung customers. 50% of their sourced material comes from china, and they expect to keep that level steady in the coming years. when asked if that's a reasonable assumption given that china is becoming a more expensive manufacturing source, a company rep talked about how interior cities are getting more competitive. with respect to innovation, they pointed to their new(ish) entities in the US and UK, which will not only be more active in the product design process, but will also facilitate growth as the west starts buying chinese goods rather than just chinese inputs.

we took in views at the hong kong monetary authority for our last meeting. the executive we met with was straightforward about hong kong's strengths (economic freedom, good legal system, nightlife, and food) and weaknesses (expensive housing, pollution). he was hesitant to answer questions about which industry sectors he finds most exciting, but he did sound bullish on infrastructure as a source of growth in china.


our business-suit-clad group was shuttled from meeting to meeting in a tour bus outfitted with a microphone. the appointed fun master maria lambert suggested we conduct “mini talks” with a hat tip to stanford GSB’s tradition called “talk” – a weekly event where a student gives a talk about his or her life to 150+ classmates. it’s probably my favorite thing about the GSB, so i was thrilled to adopt it for the trip.

our last night in hong kong included dinner at a tapas restaurant that was, perhaps unsurprisingly, not good.

tokyo

after catching a ride on the friendly limousine bus, i arrived in downtown tokyo. i was not 10 feet onto tokyo soil before a suited man ran across the street, grabbed my breast, and then calmly walked away. welcome to tokyo!

but seriously, tokyo was an awesome city, crammed with colorful characters and salary men, all of whom seem to cross the street in shibuya at the same time.


i stayed with my endlessly generous and similarly inquisitive partner in crime paige ferrari who, while i was in tokyo, published a delightful article on slate about tokyo’s first hooters restaurant. some highlights from our exploits and my general observations about tokyo:

the craziest harajuku outfits you see in the US are just the starting point for the absurdity you see on the streets of tokyo: wild hair extensions accented with all variety of hair flair, every manner of hosiery imaginable (including the ubiquitous leg warmer), and, of course, boots with the fur. actually, everything with the fur. so much so that i saw a woman at the 109 mall whose job was to lint roll the floor to collect the roving masses of renegade fluff.


also at the 109 mall: hooker shoes with rose buds in the soles:


we went into a cos play store on takeshita street where women made absurd sartorial choices to a caffeinated techno remix of disney songs. honestly, the "cos play" stores are almost indistinguishable from the regular stores where squealing girls purchase hats adorned with animal ears to the tune of “it's a small world.” entire shops sell nothing but postcard-sized photos of j-pop stars. paige explained the phenomenon to me: "remember the 90s when americans were all into boy and girl bands? well, that's like eternity in japan." the collectible cards feature androgynous teens singing, preening, and seductively biting into ripe fruit. but the guy who posed with a squash is definitely my favorite.


paige and i felt particularly dweeby cruising around harajuku in our jeans and t-shirts. "flair is highly valued here," paige explained as we perused the neighborhood's impressive array of false eyelashes. please note that the most absurd designs sell out immediately.


we took a walk through yoyogi park to see the japanese maples…


…and stumbled upon a dog park where not one dog was without sweater, vest, or sweater vest. my most surprising shopping find came at a store for dogs where, one would assume, such canine sweater vests are purchased...along with doggie panties and, i kid you not, doggie maxi pads:


day two was more cultural. we visited the sensoji temple, where we’d apparently just missed the annual extravagant shoes fair.




we walked across the water to the asahi headquarters, which appeared to feature a crowning sculpture evocative of a gargantuan parsnip. think of it as building flair.


we finished the day in akihabara, the electronics and comic book district where costumed girls lure anime-toting young men into the ubiquitous maid cafes. i saw knock-off ipads and an 8-story comic book store complete with a "tournament play" arena, and a pornographic section featuring a warning graphic of inexplicable intended meaning:


without question, my favorite tokyo experience was visiting a photo booth arcade. the final exam for one of my classes included an analysis of the business case for print club, one of the leaders in the japanese photo booth industry, so it was particularly exciting to see them in the wild. the arcade is packed tightly with booths, all of which claim to use special technology to make you look cuter (bigger eyes, smaller mouth).


hordes of teenage and twentysomething women (and some men) stand in line to pick a booth in which an elaborate series of touch screens queues them for their photo shoot. after emerging from the booth, they descend upon the print-out kiosks, styluses in hand, to quickly decorate, email, and print out their photos, all while battling a countdown clock ticking in the corner. the entire process is overwhelming, horrifying, and surprisingly fun. clearly novices, it took paige and i a good hour to navigate the whole process, but i think the results are indisputably kawaii.


fascinating visit. from the municipal speakers humming pleasant music to the high prices to the rampant costumery and pervasive consumerism, tokyo was very much like disneyland...minus children...plus seaweed.