Day 11 (September 1) – Tigo and BaoSteel

Today’s company visits: Tigo and Bao Steel

Tigo –

Tigo is a solar company with its HQ at Los Gatos. We met with James Bickford, Manager of the Asia Business Development. James is a SCU alum graduated in 2008. At 26, he already sold his own start-up and is heading the Asia Business Development at Tigo. We were all really impressed by James. He is really knowledgeable about the solar industry and able to explain some of the complicated technology in easy terms for us to better understand. Not to mention he has really good business sense at this age.

James started off in telling us what the solar market is like in the world. As the grid parity is decreasing and more and more companies entering into the market, there is an increasing phenomenon for solar companies to go bankrupt. As we spoke, James just told us that Solyndra went bankrupt. My jaws dropped as we saw that news article on the projector screen. I thought they would be doing pretty well after the government funding, but I guess not. James said that solar is a commodity and that cost, quality and availability of solar panels are the key elements in this industry. He then talked about the growth and the opportunities of the industry in China and mentioned that Suntech, the number 1 solar company, has more debt than the value of the company, and that China is outspending all the other companies in the world in solar technology. Aside from his business sense, he impressed me with his insights in the Chinese economy: capitalism is beneficial to the country on the whole and that it’s inevitable for the economy to switch from manufacturing and copying to innovation.

For lunch, we had a special dish – Crayfish in special Chinese herbs!! I have never had crayfish before and it tasted like prawns. Since it could get really messy and squirt everywhere, we were given aprons and plastic gloves!!

In the afternoon, we visited Baosteel, which is a State-Owned Enterprise. I thought it was interesting that Baosteel had its own hotel and that we were meeting their representative there. The company started in 1978 in 3 different stages. During stage 1, the company received 13 billion RMB as investments and imported steel making technology from Nippon Steel in Japan. In stage 2, the company received 17 billion RMB and technology from Germany. It was really exciting that we got to visit the factory and see how steel was made. The representative said the factory was about 55 degrees C.. we were walking on a hallway one level above the steel making machines and we could definitely feel the heat. I can’t believe how the workers could stand so close to the machines!! By the end of the tour, I could see why he said the factory complex was larger than Macau!! It’s like a small factory city!

We were talking about having hot pot for dinner for awhile and tonight’s the night!!! The hot pot was really good and we had lots of food left (mostly veggies!)!! Afterwards, we headed over to the hotel bar for some adult beverages! Another awesome night!

Day 10 (August 31) – Blu Dot

I was a little excited to go visit our company today Blu Dot. Not only because it was the company I chose for the briefing prior to this trip, but also I was really intrigued and amazed at the designs and furniture and most importantly, their marketing campaign.

Blu Dot is a design and home furniture manufacturing company based in Minneapolis. If you are into creative designs and anything different from the ordinary (also if you are pretty much tired of the IKEA furniture everywhere!!), you probably will like this company. When I was researching for the company briefing back in Santa Clara, I thought that the “Real Good Chair Experiment” was a genius idea!! Who would have thought of putting a GPS underneath 25 “Real Good” chairs to track down the people who picked up these chairs on the curbside of Manhattan, and made a documentary out of it? Also, who would have thought to ask people to offer their talents, or whatever that they can offer to bid for a piece of Blu Dot’s furniture? Too bad I don’t have much talent and I don’t really have anything random to offer, otherwise I would bid for a couch or a bed!! (To be honest, their furniture is still a little pricy even though they say it’s affordable.. or may be I should just stick with IKEA then!!).

When we arrived at Blu Dot’s office, it looked just like what I had imagined – sleek and modern, with good use of natural sunlight. We sat in a circle in the Director of Asian Operations’s office; this gave us a warm and cozy feeling as if we were doing a sharing session, which was very different from all the professional presentations so far in the trip. Aside from the rising manufacturing costs and the lack of problem solving skills among employees, which we had discussed during other company visits, one thing to note is that Benjamin, the Director of Asian Operations, talked about the issue of trust is crucial in doing business in China (I think he was the first one and could be the only person among all the other companies to mention trust as a major issue). I guess we were all so focused on the costs and the guanxi, somehow we forgot that the notion of truth is very different in China than in western countries. He said that it was not uncommon for businesses to get things done under the table or to cut corners until you get caught. It is part of the Chinese people’s nature to do business this way. Unless conflicts arise between partners, otherwise they see it as normal. I guess this explains why there is a huge market for counterfeit products and the people don’t seem to have a problem with that. However, it gets really serious when counterfeit products have reached to the food industry: infant formula, eggs and bottled water etc. These can pose serious health problems when consume, but it doesn’t seem that there is any regulations or changes that can help solve this problem. Anyways, I guess I have gone way off-tracked.

Caption: These are the “Real Good Chairs”. They are pretty comfortable!!

We had a nice alumni dinner at a restaurant near the People’s Square. Just like the alumni in Beijing, the alumni in Shanghai are really nice and eager to share their experiences with us. When we were talking with Stephanie about the common problem for foreign managers is to get their Chinese employees to take responsibilities. She said that this was due to the culture and the way these Chinese were brought up and educated. I agree with her since I was educated in a similar way as the mainland Chinese were – students are spoon-fed with exam materials and are not encouraged to think outside of the box (even though in HK we follow the British education system, the way students are taught with the materials are similar to that in China). When I was working at a Big 4 firm in the US, I tried to solve problems by myself and not to communicate them with the manager. However, it backfired since I wasn’t able to meet the deadline and the quality of my work was affected. Now, I learn to take ownership first and communicate to the manager right away if anything needs his/her attention.

After dinner, we had a couple of drinks at the Babarossa inside the People’s Square. It’s definitely a nice bar/lounge inside the park of the Square and has a Middle-eastern feel to it. Next, we headed over to the Bund for the gorgeous view of the Huangpu river. For some reason, I thought the bund was within walking distance from where we were, apparently I was wrong. We had to take the subway to the next stop and walked for about 20 minutes to get to the bund. The view was absolutely gorgeous! The high-rises on the Pudong side definitely reminded me of Hong Kong. Compare to the Pudong side, I like the buildings of the Puxi side the best since most of them dated back to the 1920s &1930s, which was the glamorous era. We were lucky to take a few pictures before the city turned off the lights of the buildings at 11pm. However, it was a bummer that we didn’t get to go to Bar Rouge or the lounge at the famous Peace Hotel for some nice jazz. I guess more reasons to come back to Shanghai!

Day 9 (August 30) – Doing businesses in Shanghai

It’s probably one of the longest day of the entire trip – First, we visited the U.S. Department of Commerce, then, Shaw Group and later during the day, Silicon Valley Bank.

U.S. Department of Commerce –

Prior to this visit, I wasn’t sure what the roles of the Dept of Commerce were and what would be covered in the presentation. The first thing I saw when entering into the presentation room was 2 projector screens, 2 Chinese flags and 2 American flags with a podium in the middle. Definitely looked like a government press conference we see on TV. We were first presented with some stats on the growing economy of China: growth of GDP, growth of the middle class etc, to illustrate the opportunities and prospects of doing businesses in China. Next, the diplomats moved on to talking about the industries that are of the most potential – Solar and clean tech. Even though China is the #1 supplier of solar panel in the world, not that many Chinese are really using solar technology, as it is still cheaper to burn coals than investing in solar. Sarah, one of the speakers, made a point that waste water treatment is a huge opportunity in China simply because there is not enough fresh/clean water. I was a little surprised to hear that there are problems with the piping at her apartment (you would think diplomat housing should be great in China, but I guess that’s the universal problem throughout the whole country, not just for the poor and the middle class!). One recurring theme we keep hearing at the company visits is the rising costs in major cities like Beijing and Shanghai. This pushes companies to start investing more in the second tier cities like Chongqing and Nanjing. These cities have fast economic growth, about 2% faster than national GDP. I guess this is inline with the recent official visit to Sichuan by Vice President Biden, highlighting the prospects for American companies in second tier cities.  Sarah also spent some time explaining to us what the Department of Commerce does – match making service for the US companies in setting up offices or investing in China. One of the main responsibilities for them is to advocate heavily for the US companies in bidding for local projects (such as Government projects) against competitors from France and Germany. The diplomats stressed that they are a great resource for US companies to enter into the Chinese markets, however, not that many people are aware of them. As we all learned prior to this trip that Guanxi is key to doing business in China, the services provided by the Dept of Commerce definitely will make US companies’ entrance in China a lot easier.

Shaw Group –

Shaw Group is currently building 4 nuclear projects with a joint venture with the Chinese government and has a central management office in Shanghai. One of the main take away from this presentation is that for foreign companies to do business in China, be ready to sell them the technology and let them do as they please! As US is the benchmark to run business and the working experience that these expats possess, Chinese companies can benefit from the project management skills and training provided by the expats until the Chinese deputies are comfortable to take over on their own. One of the many problems experienced by foreign companies is that Chinese employees are not used to taking ownership and solving problems at a low level. More often, they will escalate to management. This has to do with the cultural trait as most Chinese are more passive and used to just do what they have been told.

Silicon Valley Bank (SVB) –

Prior to visiting the SVB office in Shanghai, I didn’t know much about them except they were one of the audit clients of KPMG (my previous employer). I knew that they were a local commercial bank primarily doing investments for the local companies, but I didn’t know they play a big role in lending money to start-up companies, alongside with the VCs. SVB has a niche in providing low cost funding to these start-ups. Some of these companies include: Cisco and Linkedin. SVB Shanghai currently is doing a joint venture with Shanghai Pudong Development Bank in setting up a brand new stand- alone bank. They didn’t tell us when this new bank is going to operate but I’m curious to see what this joint venture will look like as I believe SVB is one of the few foreign banks to start a brand new bank in China. This also demonstrates that probably the best way to enter into the Chinese market is to find a good reputable local company to do a joint venture, especially in a highly regulated industry such as banking. Another thing I got out of this presentation is that there is a constant increase in RMB VC funds every month. I didn’t realize there was such tremendous growth in the VC industry in China and that they have their own VC funds in their currency. Although there is great potential in this industry, China is still lacking experience in management of these funds. They still have to rely on the experience from the US VCs in managing and investing these funds.

Tonight we decided to just go low-key, so we had dinner across the street from the hotel. We picked a Hong Kong style café, which is definitely something I’m familiar with. The restaurant is called “Uncle Restaurant” and has 3 levels. First two levels just like a regular western style restaurant, however third floor is decorated like a Hong Kong style café back in the 1960s. I really liked this nostalgic touch to the restaurant. The 6 of us went into a small room with the back wall full of Bruce Lee’s pictures and a ceiling lamp made out of red plastic trays (if you grew up in HK like me, you can definitely relate to these red trays!!).  I had another awesome night with the group!!

Day 8 (August 29) – Cultural Appreciation Day in Shanghai!!!

Our itinerary for today: Yu Garden and the Jade Buddha Temple

The Yu Garden is a classical garden that depicts the style of Ming and Qing dynasties, and was built by a local Shanghainese merchant more than 400 years ago. The scenery is really beautiful with the rockery gardens, ponds with carp fish and turtles, and willow trees and bamboo all over the garden. There are many different halls that were built in the Suzhou style. Unlike the Summer Palace, since the Yu Garden was built as a private garden, we are allowed to go inside of the halls to take pictures and to experience what the household was like living in a wealthy family back in the day. It’s really hard to compare the Yu Garden to the Summer Palace, since each has its own characteristics and are very different. Both have very beautiful sceneries and great history. I guess I like both!!

After visiting the Yu Garden, we had about 20 minutes to roam around the Yu Garden Bazaar. I knew I had not been to the Yu Garden before but when I got to the Bazaar, I realized that I had been here a few years ago when I first came to Shanghai ( I only went to the Bazaar and the City God Temple that was adjacent to the Yu Garden). The shops at the Bazaar mostly sell souvenirs and local delicacies. But there are also shops that sell electronics, jewelry and watches, and of course, Starbucks!! First thing first, we went to Starbucks to get some coffee as we started to have Starbucks withdrawals!! I wish we could have lunch at the world famous Nanxiang Xiaolungbao restaurant, which is located in the middle of the Bazaar. Not only are they famous for the xiaolungbao, but also for their soup dumplings (the fun thing about having a soup dumpling is that you have to first drink the soup inside of the dumpling with a straw before eating the bun on the outside!!).  Oh well, more reasons to come back to Shanghai! ;)

Caption (above): This is the famous Nanxiang Xiaolungbao Restaurant!

After lunch, we went to the Jade Buddha Temple, where it was also my first time visiting. Just like most Chinese Buddhist temples, the Jade Buddha Temple has a chamber for the Four Heavenly Kings and a Great Hall that houses the statues of the Buddha, 18 arhats and the Guanyin (the Goddess of Mercy). The Temple was built in 1882 to enshrine two jade Buddha statues that were brought from Burma. The most exquisite Jade Buddha statue is kept in a chamber in a relatively newer building. Aside from the fact that the Temple enshrines two jade Buddha statues, you can tell that the Temple is very popular among the locals by the amount of incense burning at the Grand Hall.

In the evening, we decided to go to Xintiandi, a very popular place among the locals and tourists for evening entertainment and great dining experience (kinda like Santana Row back home!). We walked around to pick a nice and reasonably- priced restaurant and finally ended up at CWJ Bar & Restaurant.

By the time the nine of us were seated, we found out that there was 5 more minutes till the end of Happy Hour (buy one get one free!!). Of course we weren’t gonna let that opportunity slipped through our hands. However, the waiter said the system had just cut off Happy Hour!! NO WAY!! It wasn’t even 8 pm yet and it’s cut off??? Fortunately, Utkarsh and Jonathan talked to the manager and made it happen!! Thanks guys!! The food there was great and the band was playing some awesome jazz music! After dinner, Vangie, Melissa, Brad, Utkarsh and I stayed behind for more jazz and drinks. However, on our cab ride back to the hotel, we didn’t realize that we were being nuisances to the cab driver (there was this interactive TV on the back of the front seat and we were doing a survey!! I guess we were really loud and kept poking at the TV!!). Anyways, it was a great day and a great start to our week in Shanghai!!

Day 7 (August 28) – High speed rail to Shanghai!!!

Yes! Despite the recent accident resulted in several deaths on the high speed rail, we still took it to Shanghai. It’s actually really safe (especially after the accident!), plus I don’t really trust the domestic flights in China. So, it seems the train is lesser of the two evils! The train itself was really clean and nice. The inside looked very similar to that of the Bullet train in Japan. It was a 5 -hour ride but it didn’t seem that long. We even had lunch at the dining cart of the train; the train was so steady that you couldn’t feel anything!

As soon as we arrived in Shanghai, we checked in to the Renaissance Zhongshan Park Hotel. We were all excited about this hotel since it’s really modern and sleek. It has a really nice restaurant for breakfast and the lobby lounge has become the default place for us to hang out. They have really nice cocktails and it’s buy one get one free happy hour! Of course, we are going to take advantage of that!! There is a huge mall adjacent to our hotel and it has tons of restaurants and shops.

Since we are in Shanghai, of course we were gonna try one of the local delicacies, Xiaolungbao (the literal English translation is Little Cage Buns! If you think about it, it does look like a mini bird cage!!) Even we didn’t make it to the most famous restaurant in Shanghai for their xiaolungbao, instead we went to a small hole-in-the-wall type somewhere near our hotel, but their xiaolungbaos are extraordinarily good!! Even better than some of the ones I have had in the US and in Hong Kong!

Day 6 (August 27) – More Cultural Appreciation and shopping!!

Thank god the sky cleared up today!! But unfortunately, I was feeling under weather!! Today’s itinerary: Summer Palace, Lunch, Pearl Market!!

Our lovely tour guide, Zhang Li, was so kind to offer to take us to the Summer Palace and the Pearl Market. I was quite excited to go to the Summer Palace since I have never been and I heard it’s really beautiful especially with the blooming lotus.

We took the subway from the hotel to the Summer Palace. The ride was about 50-60 mins. But man, what an experience!! I knew that the subway was going to be packed and crowded just like the ones in any other big cities like Tokyo and Hong Kong; I thought I had seen worse!! But these were what I noticed: First, the Beijing people would take the risk of being pressed by the train doors, even though they know the doors are closing and they aren’t gonna make it! And of course, most of them didn’t make it!! Second, when you are as petite as me and get stuck in a crammed train while people are holding on to the railing on top, the scenery and the odor are not very pleasant!!! Third, when a bigger lady totally leaned on you for balance… yeah not a very fun ride! But hey! I survived taking the subway in Beijing!!

Summer Palace was really beautiful indeed! Since it’s a Saturday, many locals that have purchased season’s passes (yes! They sell season’s pass!! They even have a rabbit character posing for pictures at the North gate!! Just like Disneyland!!) would go there to spend their day. I didn’t know much about the history of the Summer Palace prior to visiting, other than the fact that the Empress Dowager Cixi used 30 million taels of silver, which was originally used as funding for the Chinese navy, to rebuild and enlarge the Summer Palace in 1886 and 1902.

Once we entered the North Gate, we came across the Suzhou Street, which was a recreation of the streets in Suzhou, a city located in the Southeastern part of China and is close to Shanghai and got a name “Venice of the East” due to the canals throughout the city. It was said that the Emperor Qianlong was so in love with the city that he visited the Southeastern part of the country 8 times. That’s why he built recreated version of the Suzhou Street in the Summer Palace. It definitely resembled the scenery in Suzhou and looked very much different from the streets in Beijing.

Next we walked through the Long Corridor, which is famous for the beautiful paintings on the beams and the ceiling. The scenery of the lake next to the Long Corridor with blooming lotus was absolutely gorgeous, however, it would have been much better if there weren’t that many locals having ramen and sandwiches on the two sides of the Corridor, and not to mention the noise of the crowds!

The highlight of the visit was to take a dragon boat ride on the Kunming Lake and to see the beautiful view of the Longevity Hill. Too bad, we didn’t get to go up the Hill to see the Tower of the Fragrance of the Buddha (this was the building we saw once we got out of the Forbidden City as it faces the back gate of the palace complex). It was said that the Emperor Qianlong built the tower in celebration of his mother’s 60^th birthday. Our visit to the Summer Palace came to an end as we disembarked the dragon boat and exited through the east gate.

We spent most of the afternoon at the Pearl Market for some nice and affordable jewelry and our quest for the chubby pandas (Yes! Victoria and I weren’t gonna leave the Pearl Market without buying the chubby pandas!! And yes, we finally bought them!!). By the time we got back to the hotel we were all so tired!! It also didn’t help when I got sick. But overall, it was a really fun day and I’m so glad that I got to see the Summer Palace! :)

Day 5 (August 26) – Cultural Appreciation Day! Yay!

Yaaaay!! We finally got to do some sightseeing stuff in Beijing but wait…….. it’s pouring outside and there were thunder and lightning.. Noooooooo!!

We were scheduled to go to the Forbidden City and Tiananmen Square in the morning and then the Great Wall after lunch. But since it’s raining like cats and dogs, Prof. Woolley switched around the itinerary and it worked out perfectly! Although it was still raining when we got to the Great Wall – Mutianyu Pass, by the time we reached to the top, it had stopped raining! We didn’t spend too much time on the wall since the weather sucked and we couldn’t see much! Victoria and I took the cable car down to the bottom (I guess we were the only two who didn’t walk down!).  Too bad it wasn’t a clear sunny day, otherwise I would have tried to reach the restricted part of the wall to see the unrestored sections, since I have always wondered what the ancient wall looked like. When we reached down to the bottom of the wall, we started bargaining for the chubby panda stuffed animals. We didn’t get a good deal for them, whereas most guys got really good deals for the chubby pandas!! Not fair!! It has proven that I suck at bargaining!! Anyways, so there is this old Chinese proverb that says “Not been on the Great Wall, not a great man”. Well, we are proud to say that we are all great men/women!!

After spending a little more than an hour at the Great Wall, we went back to the city for some nice Peking Duck lunch! I always think of eating Peking Duck like a Chinese taco: 1) take a piece of the Chinese tortilla, 2) put in some duck meat and skin, hoisin sauce and cucumber, 3) wrap ‘em all up! Voila!!

After lunch, we started walking from Tiananmen Square into the Forbidden City. Once again, we were the center of attention when we were at the Square! The locals seem to have more of a fun time taking pictures of us than taking pictures of themselves! The Forbidden City is huge! Unlike some of the palaces in Europe, the Forbidden City is so large that it could act as a real city. It covers more than 178 acres and is the largest surviving palace complex in the world. We were only able to go to a few buildings at the Outer Court and didn’t even get to cover the Inner Court and the back palace! Some of the buildings are nice restored due to the 2008 Olympics (such as the Hall of Supreme Harmony), but some are left untouched. It’s really interesting to see the Forbidden City because I grew up watching lots of Chinese TV series that were set in the Qing Dynasty (the Forbidden City was the imperial palace for 24 emperors during the Ming and Qing Dynasties).  There was a sense of familiarity walking through the buildings and the Imperial Garden!

Day 4 – Master Kong

We took a fast train from the Beijing South Station to Tianjin to visit the headquarters of Master Kong. I recognize the brand when I was growing up in Hong Kong but didn’t realize it was that huge in Mainland China, especially when I go grocery shopping in Beijing almost everyone is purchasing the Master Kong instant noodles or drinks. Their market in Hong Kong is not as big as the one in China since most Hong Kong people prefer the Japanese brands or the local Hong Kong brands. I was really impressed by the manufacturing plants of the noodles and the bottled beverages in Tianjin. It’s all machine operated, organized and most importantly, clean and hygienic. That’s when you know their products are of high quality! I wonder if the other plants in different parts of China look the same or just because this plant is at the HQ and that they have to make an impression! I did not realize that they have so many different varieties of noodles and flavors – some are only available in certain regions of China to cater to the tastes of locals. One reason why Master Kong is so successful in China is their marketing strategy – they like to hire Chinese and Taiwanese movie stars and singers in their advertising campaigns. It’s quite interesting that at the HQ, they have all of their products placed by the entrance and their ads in the lobby. It looks as if you have walked into a mini-mart and you can actually purchase their noodles there. I have noticed from talking to the PR guy at Master Kong, and the founder of BX glass that labor costs have been rising in China, and that margin has dropped a lot over the past year for the manufacturing industry. This might pose as an important issue to the industry and an urge to transform the economy from a manufacturing-focused economy to a service-economy in the future!

After catching the train back to Beijing, a majority of our group decided to get a massage. We found this massage parlor called Liangzi within walking distance from our hotel. It’s definitely a legit and clean massage place with glamorous décor. The place is insanely huge!! We kept went down to B2 and were led deeper and deeper to the rooms. We all wondered where the staff was taking us and told ourselves to hold on to our kidneys!! There was a little drama that happened inside the parlor. As we were escorted to the treatment rooms, we were told that only 8 out of 14 of us could do the full body massage (and all 14 of us requested full body massages!!), and the rest foot massage. It took us 10 min standing in a narrow hallway to negotiate with the staff with the price, duration and the type of massage. The staff seemed a little impatient and asked Jonathan and I to follow him to another place to negotiate while some people started doing their foot massage. It seemed a little shady and scary at that point and of course we wouldn’t just leave our friends there without having this settled. Finally, we came to a compromise and 8 of us got a 60 min full body massage while the rest had a 60 min foot massage. The massage was great! Got stepped on my back for the very first time! It’s definitely an experience!!

Day 3 - Fantong / Morgan Lewis

Today’s business visit includes Fantong.com – an internet startup focuses on restaurant bookings and group discounts that is basically a combination of Opentable.com, Yelp and Groupon, and Morgan Lewis – a global law firm.

I’m quite impressed with the presentation given by Mr. Zhao, CFO of Fantong.com.  Not only did he give a very informative and thorough presentation, but also gave us good insights and advice in starting our own businesses in China or in the US. I also love the fact that he told us so many interesting stories that we could relate to and take away from. He said one of the few challenges of having a start up is that since there are so many different ideas and thoughts among the founders, it is very easily to get carried away and lose direction. He used the analogy of the horse, crab and the swan pulling a cart – the horse moves forward, crab pulls the cart sideways and the swan pulls it upwards – to symbolize that if the company has no focus, it can be pulled many different ways and lose direction and it will eventually fail. Therefore, the CEO should communicate well to the executives and employees about the company’s focus and mission. Another main thing I took away from this presentation was that in order to be successful and survived among all the other start ups in the e-commerce industry, you cannot engage in price wars and keep driving price down because that will squeeze out profit and the industry will die eventually. Instead, the strategy should be making the pie bigger so that everyone can have a piece of it. Since the Chinese market is so huge, as long as you have a share of it, you’d be able to survive.

In the afternoon, we went to Morgan Lewis for a presentation given by Dr. Lucas Chang, Chief Representative of the firm. Just like all of the presenters we have had so far, he is really informative and very patient with our questions. He first told us the difference about being PRC licensed and PRC qualified – the former has to be a PRC citizen and passed the PRC bar exam. He then moved on to introducing the four categories of industries: Prohibited (e.g. National Defense), Restricted (e.g. Legal, Medical, Education etc) Encouraged (e.g. High Tech, Energy), Permitted (All others). A very common business model in China currently is the VIE model – an Onshore/Offshore company sets up a WFOE to hold a local operating company (e.g. Sina).  Many foreign companies set up this kind of business model to circumvent the previously established regulations on foreign investments. I’m quite surprised that Dr. Chang said this model might go away eventually because I thought this model is very successful in helping foreign companies to do business in China. I cannot imagine what the replacement of this model would be like and neither does Dr. Chang know what the new model is.

After having two awesome presentations, we headed over to Walmart for a short scavenger hunt! It was really fun to be running around Walmart in 3-inch heels and I survived!! J Some questions of the hunt include: How many different types of fish are there? What’s the strangest flavor of toothpaste, How much is the most expensive toothbrush etc? I thought the Walmart in China looked pretty much the same as the ones in the US; it’s really organized and clean. However, we couldn’t see any alligator meat, nor frogs and weird stuff, which was a bit disappointing. May be because the one we went to is in ChaoYang district, an area with mostly foreign businesses and embassies, so they have to keep it nice and tidy!

During our free time, we met up with a couple of SCU alum living in Beijing and they took us to a hole-in-the-wall restaurant for dinner. The 16 of us were eating on the street and of course we were the center of attention! Dinner was surprisingly cheap. Everyone only had to pay 20RMB! One interesting fact to note is that I notice the beers serve at most restaurants are of 1L bottles, and that’s per person! I definitely have been drinking more beer than water in Beijing! Afterwards we went to a bar area called San Li Tun, where most expats and tourists go for drinks. It was definitely a fun night!!

Day 2 - BX and Lenovo

Day 2 started off with a funny experience. A few of us have been saying that they often get stared at by the locals and feel a little uneasy. I thought that was not going to happen on me, since I’m Chinese. I guess I was wrong. It happened to me twice on Tuesday!! First, when we were about to get on the bus, I noticed that the guard was staring at me for the longest time and I thought that was really weird. The second time was when we were waiting for the subway at the platform and I was talking to James and Victoria, the guy in front of me was staring at me too. I actually didn’t really realize that until James told me that the guy was staring and said that he probably was wondering why I speak fluent English!! Anyways, that was an interesting experience.

We went to BX glass that was actually in Hebei province and it took us about 2 hours to get there. There were no skyscrapers like the ones in Beijing in Hebei but factory buildings and the dorms for workers. Looking at the scenery there reminded me of the similar sceneries of other emerging countries such as Turkey. We finally arrived at BX glass’ factory and were led to their showroom. I was quite impressed with the different styles of glassware and containers they have. One of the founders was so kind enough to answer all of our questions despite the language barrier (it took 4 people to help translating - Li, Victoria, Jonathan and I! I think that’s really interesting and made me realize that I should really brush up on my mandarin!!). He also showed us how the glass was made. It was definitely interesting to see the workers blowing the glass! The founder mentioned that there is practically 0 loss rate as they usually just break the failed ones and melt them again. Generally, 75% of the products are of good quality and 25% is bad. I’m quite surprised that the plant operates 24 hours a day with 3 shifts of workers working 8 hours a day! No wonder he said the margin is really slim because labor costs are pretty high considering he keeps them working 24 hours/day and also provide accommodation and food etc. 

After lunch, we finally got to go to the Z-Park to visit Lenovo. I really enjoyed the little tour and product introduction! We got to hold the torch for the 2008 Olympics for pictures (the torch was designed by a couple of Lenovo employees) - that was really cool! It’s quite funny that when they introduced the X1 Thinkpad and said that the keyboard was waterproof, James tried it out by pouring some water into the keyboard!! At first we weren’t sure if it actually damaged the computer since there was no water coming out of the draining holes at the bottom, but thank god the water came out, otherwise we might be in trouble!! Then we were given a presentation by Corey Grenier at Lenovo. At first when he first walked in, I thought that he was an European, because of the way he dressed. But he was actually from Sunnyvale, CA!! I was impressed by what he has accomplished in his career: went to SJSU for undergrad, London for his MBA and now working in Beijing for Lenovo! How awesome to have lived and worked in 3 continents?? I’d love to live in Europe at some point in my life. Hopefully my work in the future can take me there!! :) Undoubtedly, Lenovo is doing great in China and has taken over Acer as the 3rd largest PC manufacturing company after HP and Dell! Must be quite awesome to work there!

We finally got some free time to explore the city after all the company visits. We first went to the night market to experience the hustle and bustle…. and of course the weird stuff (scorpions, silk worms etc.) I’d love to blog about how tasty the scorpions and the silk worms are but since I’m not adventurous enough to eat those and none of the other stuff on the street, I guess I’ll just leave that to our imagination! :) We then walked over to the Wangfujing walking street, which is one of the main shopping street in Beijing! We found a Szechuan restaurant which looked a little shady on the outside but with really good food inside! It was really awesome to go hang out with everyone in the group that night and get to know everyone better!! It was definitely a fun night out!