Wednesday, December 31, 2003

US beef was Chinese

Why do journalists sometimes have to make up stories, since the truth is already so funny (that is: when the following story in the Shanghai Daily is true, of course).
A Japanese restaurant in Shanghai had joined at the end of the 1990s a promotion drive for US beef and had put up a large sign saying it sold US beef. The owner discovered that the differences between US filets and its Chinese counterparts were considerable: 200 Renminbi (24 USD) for a kilo and 30 Renminbi (3.5 USD) and decided silently to replace the US beef by Chinese filets.
Now the mad cow disease has struck US beef, the promotion has become a problem and the owner has decided to tell his customers the truth: he only serves honest Chinese meat.

Wednesday, December 24, 2003

The 2004 China craze – the WTO column

(An New-Year advance on my Chinabiz-publication)

Ann Arbor – Is doing business a science? At many business schools I have visited during the past few months they claim it is, but the only major that comes close to doing business in my viewpoint is theology, this other major that defies basic logic and where the outcome is hard to prove in scientifically.

Doing business seems rather basic as long as you have not obtained your MBA. When you invest in a business that guarantees some return on investment, when you avoid companies that have a reputation of only losing money, you should be on the safe side and be able to make some money. But all those basic precautions are thrown overboard when you get into this higher level of awareness, when greed get into this play, when a shortcut seems to allow faster access into the paradise of capitalism.
Some of you might still remember this funny time when the expectations regarding internet were high up and eyeballs had replaced harder currencies. Those eyeballs would translate into solid revenue was the assumption. And in China, yes, in booming China the internet would be a winner for sure, since the number of eyeballs was anyway countless.
It was a tough wake-up call when those eyeballs did not equaled money.

China is red hot yet again at the end of 2003 and the worst still seems to be coming. Hungry investors, unable to find decent investment objects elsewhere, flock to this Promised Land in need for salvation. Basic logic does not apply anymore. Why are we building more and more production capacity for cars in a world that has already an overcapacity? China!
Why we have spent last week US$ 3.47 billion on a bankrupt insurance company China Life? China! And because Hong Kong high priest Li Ka-shing also spent some pocket money into this venture.
Why are we investing into an insurance company that mainly has a reputation for losing billions? China!
Why invest into an industry that is only attracts the Chinese because there are not other ways for them to invest their savings? Because it is China and we do not expect any other investment tools will ever emerge for the Chinese! It China!

The only difference with a religious sect is that a charismatic leader is missing in this latest run for paradise. No investment banker yet can elevate himself from the ground by focusing on his toes, although some business schools think of including this concentration into their curriculum too. Nobody who can heal people, although cheating all those investors out of their money seems a healthy side effect: they seem to have too much anyway. Jezus won our admiration by changing water into wine, a very successful business model, but changing money into air does not seem enough to qualify as a business leader.

Let’s all see it from the bright side. Communism has failed to bring down capitalism. What bigger evil can bring down capitalism apart from capitalism itself? Let’s invest our capital, hold hands and pray, since the Lord has done bigger things.


PS: Best wishes for 2004 
PPS: Some of you asked me after my previous column on the internet as a disruptive technology to give some Chinese examples too. Hold on: next week you will get a follow up, this seemed more urgent.

Tuesday, December 16, 2003

IBM move high-tech jobs to China, India

IBM plans to shift thousands of high-tech jobs from the US to China and India, the largest of such actions ever planned, writes AP today.
IBM documents obtained by The Wall Street Journal said about 4,700 programming jobs could be shifted overseas to save costs, a growing high-tech industry trend known as "offshoring", says the article.

Monday, December 15, 2003

Greenspan defends China again

Federal reserve chairman Alan Greenspan again told US business people, now in Texas, that there is no direct relationship between the value of the Renminbi and the number of jobs in the US, writes AFP.
Greenspan warned against using the issue during the runup to the upcoming presidential elections in November 2004. "A rise in the value of the renminbi would be unlikely to have much, if any, effect on aggregate employment in the United States," he said.

Sunday, December 14, 2003

Competing forces

One of the more interesting discussions here in the US in relations to China is that on competitiveness. Americans do think they are the most competitive country in the world, although China proves it wrong all to often.
Truth is quite different. I'm now sitting in the canteen of the Michigan Business School on a Saturday afternoon. The place is packed with students and there is no way to get here coffee or even basic snacks. In China private enterpreneurs would have taken over, but here there is no sign of competiting services: I estimate they have been regulated away.
The same happens with telecommunication. In China that is seen as a kind of public utility, similar to water and the sewage system. Here in the US mobile phones connections are not covering the country, very expensive and a nuisance in every way. On top of that, you cannot use US mobile phones elsewhere in the world, since they are not compatible with the GSM system.
Getting online, even at the most famous universities, is very tough for outsiders like me. This Michigan Business School is one of the exceptions where I can walk in, plug in and get onto the internet. Both Stanford and Harvard University forces me into illegality to get online.
Now: why would the US loose in competing with China?

Have to correct this partly: also the US has a few services that allows nationwide internet-access. Maybe not as bad as I thought :-)

Saturday, December 13, 2003

Caught in the act

US Tresury Secretary John Snow, who critized China for unfair trade leading to the growing trade deficit between the two countries, was caught buying Chinese toys for his grandchildren, adding to the trade deficit himself, writes Reuters.
The 13 toys have cost about USD 200, the article says. Snow commented that he only added rather little to the country's deficit that was at a record height, reports AP, although US exports also rose to its highest level in 2.5 years.
Canada and China want to double trade

Obvious no upcoming election in Canada, where China's Wen Jiabao and his Canadian guests decided to try to double their trade by 2010, writes AFP.
Web cast planned on retail in China

At Chinabiz we are planning for Thursday a web cast on the retail in China, with Paul French of Access Asia as the main guest. His newest report on Wal-mart is not yet available in our bookstore, but other reports are.
Now we are solliciting feedback from possible participants on the right timing at our forum. A time will be set by Monday at the end of the day.
We will use yahoo messenger as a communication tool and you can mail me for technical assistance.

For January we plan an additional web cast on succesful B2B internet companies in China with Kate Hartford.

Friday, December 12, 2003

Value Renminbi no trade issue - Greenspan

US Federal Reserve Chairman Alan Greenspan was one of the last leading financial gurus to tell the world he did no see a relation between the value of the Chinese currency and the debate on the trade deficit between the US and China, media - including the China Daily - reported widely.
"The story on trade and jobs, in my judgment, is a bit more complex, especially with respect to China, than this strain of conventional wisdom would lead one to believe," Greenspan said in remarks prepared for the World Affairs Council of Greater Dallas.
Like others Greenspan assumed that a freer floating Renminbi would no so much help the US manufacturers, but rather other countries in the world, like low-wage countries in Asia.
A Japanese thinktank actually advised China to float its currency not before 2010, reports Dow Jones.
No job recovery in the US

Top officials in the United States fear that a recovery of the job market might be as far away as 2005, much after the presidential election of 2004 where the economy will be one of the major issues. The Wall Street Journal publishes today from minutes of the Federal Reserve.
While other economic indicators show a recovery of the economy, gains in jobs have been low, supposedly because of the increased productivity of American workers. "Members generally anticipated that an economic performance in line with their expectations would not entirely eliminate currently large margins of unemployed labor and other resources until perhaps the latter part of 2005 or even later," the paper quotes the minutes.
The US administration is pursuing two different strategies towards China, writes the New York Times by encouraging US firms to relocate to China, despite all the rethoric against a China that is destroying American jobs.
More in The Economist.

Tuesday, December 09, 2003

China and US disagree politely

China and the US decided to have talks on the Renminbi, writes Bloomberg today. That is of course a very nice way of saying they were unable to reach an agreement about one of the hot issues on Wen Jiabao's trip to the US.
Baobao - as some of the academics here call the Chines prime minister - will speak tomorrow at Harvard, but by then I will be on my way to Michigan. Hope it does not mess up things at the airport too much.

Sunday, December 07, 2003

On the road

My apologies for not updating this blog more regularly. I have been traveling extensively and working on other projects. Although prime minister Wen Jiabao will be visiting the US coming week, the attention for this high profile trip seems to be rather subdue in the US media. Will monitor developments now the snow storms have hit Boston and halted my sight seeing plans. But not much seems to be moving here.
At least I got for the first time in my live the opportunity to shovel away large quantities of snow. And more to come!
Google Answers

This page is powered by Blogger. Isn't yours?