Chinafornia

Some Footage from the Trip!!

2008-02-16T22:41:00.000-08:00

~Some Clips of the trip~

Videos taken with Canon Digital Elph SD800

Final Reflection: China Trip 2007

2007-08-05T00:50:00.000-07:00

By Steven Rodger

Phuket, Thailand
Revised in Tokyo, Japan
and Hanalei, Hawaii

Only after the bus pulled away from the Grand Beijing Hotel, leaving me behind, did I truly begin to digest the size of the Chinese Tsunami heading east. I had two hours to find my new hotel, check in, get cleaned up before I was to navigate to one of many Starbucks in the eastern megatropolis of Beijing. I had a meeting with a famous Chinese Cinematographer who wanted to establish guan xi with me, and bring his films to America. We had an interpreter, Vivian from Beida (Peking University) translate our discussion, as I learned about the complexities of the film and television industry in China. Then, I described the United States television/film industry through Viv to the two film artists, Chen and Vivian and provided advice about how to establish their company's work in America.

It became incredibly apparent how important guan xi was in China. Chen had been granted access to several forbidden parts of western China by the government to film several documentaries about a Chinese breeding facility which very few have access to, let alone filming. He showed me a sample of his work on his laptop in the Starbucks and I was blown away by his talent. I thought to myself how an such a talented film director isn't rich. He also gave me a photo-book he had published with stunning scenic and cultural photography taken from rural western China. I was shocked by how intellectual property was so minimal in China, and how much he could prosper if I could find a U.S. based connection for his films. I realized how as Americans, we take such things for granted, and I assured him that I would do my best to market his work in the U.S. (when I return home in September). I was honored when he asked if I wanted to form a collaborated studio with his company and my own in California. Turns out, his last production was not cheap, costing over $100,000 USD to create. Already, several of his films have been popular in Japan, where Pandas and nature are sacred to the Japanese people. He had several other projects in the making but none have be possible without permission from the government . It became extremely evident how important connections to the local government, which I learned plays an imperative role in conducting business in China.

One of the things American companies could learn about doing business in China is to loosen up their rules to allow for more negotiations. There are less written out rules in China, which paves the way for increased business deals to be made. This is a primary reason for their recent exponential growth in the past decade, One way to really feel this is when bargaining for goods at one of the many markets in Beijing or any other city for that matter. Prices will be quoted at normal US prices. Then you can offer a low-ball rate, and see if they bite. Ninety percent of the time, the Chinese person selling the goods will chase after you and will be willing to make a deal even if they sell their good at just above their bottom line price, barely making a few yuan. I found that negotiations in China both entertaining and challenging, and thought some people need more practice at it. Interestingly enough, it seemed that the business deals made after a minute or so of bargaining yielded a more content customer and seller.

It is apparent that only the strong survive in China. While this is true in most business environments, it is especially a reality in Chinese culture. This is due to the astronomical abundance of labor. There seems to be endless workers doing mindless tasks which nobody in the United States would bother to do. The Chinese make hard-working people in the U.S. look lazy. For example, I went into a shoe store to see if they had any new kicks in my size. In a small shoe store about the size of a small Foot Locker there were 20+ shoe sales people, all wanting to size you up. While they did not carry any shoes close to my size it was interesting seeing the abundance of labor, and the immense size of the workforce. You can feel the fast paced movement of life the large Chinese cities we visited, which was much greater than similar sized cities in America. With the abundance of cheap labor, it means almost anything is possible.

Growth and development in China seems to be a textbook example of a third-world country. One disappointment was the lack of environmental standards in general in China. Though my undergraduate education was focused on researching solutions for such problems, I briefly ignored them in order to not have a biased opinion about what the companies had to say about their environmental efforts and advancements. The most common themed answer related to environmental based questions was that being profitable was their first effort, and sustainability and becoming green would come later. The first solid example of environmentalism in action came from Lenovo computer manufacturing where an engineer designed a packaging devices which was not only lighter, but it also required less material and could be recycled. This translated into lighter shipments, and increased revenues. It is ideas like these which need to be set in place more in Chinese businesses. As manufacturers explode shipments to the world, wouldn't it be smart if they took a minute, thought about how to become more efficient, possibly do something green and save some money. While becoming sustainable is becoming trendy now-a-days in America, hopefully it will spread to Chinese businesses more.

An interesting portion of the trip occurred when we visited English corner. When I mentioned that I was completing my MBA, and I had a undergraduate background in Environmental Science, the eyes of the 8 Chinese circling me lit up. They claimed their government would hire me in a second...This was reassuring as it showed that the Chinese too, care about their environment. Sucking up the pollution atop the Great Wall was the first time that I was really bothered by the pollution, as I still have a whooping cough which has been lingering for the last week. Eventually, I recovered but you could tell the amount of sick people in China was proportionally higher than other places I have traveled to. I am currently revising the draft of this reflection in Japan, and it amazing how much cleaner Japan is than China. The Japanese appreciate their environment much more than the typical Chinese person, and this can be seen through their large gardens and efficient transportation systems. I am currently in Tokyo, which has a similar population to Beijing, but there is relatively low pollution. Perhaps China should take a hint from their neighbors to the east regarding environmental business. Investing in a better transportation system would be a great first step.

Despite the pollution, the Chinese are now making a larger effort to be green, and clean up their environment. As one local told me, 'You think the pollution bad now....you should come here 10 years ago." We could also see this evident during company visits including Walmart who is supposedly building in sustainable practices into their business models. I was especially impressed with the work of UNIC, at Suzhou Industrial Park (SIP).
Alex Smayda and Jason Whelan who we had went clubbing with in Shanghai a few days earlier explained their businesses. Ironically, yesterday I was watching Chinese television and I saw a special on the discovery channel describing Mr. Whelan's business, Nature Works. This is the type of company which China should model their future businesses from.

Being one of the few students in the program with a science based undergraduate degree, this was the first company which I felt that I would most want to work with due to their philosophy of having a strong business foundation without draining the environment. Using fermented corn, lactic acid is formed into a polymer which is converted into a biodegradable plastic, instead of using petroleum based plastics which takes years to decompose in landfills. It was interesting to see how strong guan xi was established with Jason, and Alex's company Stream Source which used the PLA plastic to manufacture highly profitable hangers. Their companies demonstrated a refreshing example of the direction China must go in before they simply pollute their country until they start committing suicide by gulping the smog.

It became apparent that these expats saw the opportunity to do business in China, and were riding the success. Their lives seemed fast paced, as business deals are made much more quickly than in the United States. Again, this is because of the lack of loopholes which companies must overcome. Not having an abundance of strict business rules to follow seemed like an incredible advantage to conducting business in China, whereas in America certain decisions take days if not years to take place. This faced paced growth certainly has advantages, yet I wonder sometimes about the integrity of some of the final plans.

China has made me appreciate growing up and living in the United States, similarly to how I feel when I visit any other third world country. The opportunities which Americans take for granted are the dreams for some Chinese. We are fortunate to live in a country which is far less polluted with a more heterogeneous population. While China is diverse with it's many different dialects and cultures, it made you realize how unique the U.S. is with many more nationalities represented. This becomes even more apparent when you visit a country like Japan. I also appreciate how much easier it is to make money in America. Chinese working the streets filled every nook and cranny marketing just about everything and anything you can think of. It was also incredible seeing that 'Everything' is made here in China. From Shirts, to Computers, and from buildings to clothes hangars, we saw a range of industries which gave a unique perspective of the origin of the world's material possessions. Traveling through China also gave a skewed perspective of the cost of everything. Now that I'm in Thailand, I find myself bargaining for goods merely to save small change after getting accustom to the cost of goods in China.

Overall, the fast paced environment of China makes one realize that anything is doable...at least much more so than the United States. It seems that a deal can always be conducted. The Chinese people have a strong desire to work harder than Americans, and you can feel this just by talking to practically any ordinary citizens. As Athena's cousin Matt explained, 'the Chinese are going to come to America and eat your lunch, and then steal your kids lunches too'. It is also becoming evident as they are learning English while we are simply watching. On one hand, poverty and pollution is rampant in China, representing a environmentalists worst nightmare. On the other hand, these problems provide for immense opportunities. While the government is attempting to fix these problems, they can provide only so much for their estimated 1.32 Billion individuals.

In a land where intellectual property rights are minimal someone like myself would find it difficult to make a living in China. Also, I'm not sure if I could handle so many bad drivers. As I ponder whether I could become an expat like Lonnie or Alex there are many pros and cons. Immense opportunities await to quickly climb a corporate ladder in China and bags of money hanging from trees for those who want to live outside of their American bubble of comfort. It seems like if you were to work in China, being young and single is the way to go, as bringing family and kids into the foreign culture seems like a struggle...Not to mention the many health hazards. Would I move to China for business? As Bob Barker used to say "If the price is right". To move to a land where American comforts are minimal, it would take a decent severance package to move me to a polluted foreign country. Personally, if I was to work in an Asian country I would prefer Japan as the country is cleaner, greener and has higher salaries.

Conclusion:

China provides an amazing opportunity for those who want to remove themselves from the normal working system in America and ride the growth as China booms. While many of the businesses in China mimic those in the United States, China does an amazing job of getting the job done in a timely, frugal manner which anyone can appreciate. Certainly there are many lessons to be learned from Chinese businesses, and I am honored to be able to have visited so many firms during our brief visit to the country. It will be those individuals who are working up the corporate ladder now in China who will be controlling the business world in the next decade, While it means giving up the comforts of America it should provide to be prosperous both culturally and financially to those willing to take the plunge.

There is a tsunami of Chinese coming towards America...who's going to catch it?

Steve Rodger
史提夫

-Recommendations for China-bound travelers
Some last tips for those who are coming to China in the near future. If you start your trip in Beijing consider flying with no baggage, then buy everything you need in the Silk or Pearl market at a tenth of the cost that it would cost you in the US. If you have feet bigger than size US 12 don't bother trying to find shoes that fit. For some good times, do go into a shoe store and tell them that you want size 12US shoes and get smiles and laughs from all 20 of the shoe sales people. Lastly, if you've always wanted to be a millionaire save up about $120,000USD and move to China, and live like a king.

written 7/10/07

CHINESE COMPANY PROFILE SUMMARY

2007-06-01T15:58:00.000-07:00

The following is a list of companies which our MBA program will visit in China.

Additionally, there are some questions which will be asked to their managers.

_____________________________________________________________

Guangzhou

Zhongkai University of Agriculture and Technology
http://www.zhku.edu.cn/english/english.htm

Located on the south bank of the Zhujiang (Pearl) River in Guangzhou, China this university is best known for its sub-tropical gardening research program. It is named after the Chinese patriot Liao, Zhongkai. Established in 1984, it currently employs over 600 covering twenty-six majors. The school also is unique in that it serves as a regional center for the International English Language Testing System (IELTS) home-based at Cambridge University in England. Student population at Zhongkai is expected to more than double next five years, to over 25,000 undergraduate and graduate students. The campus has won Provincial awards for its environment while maintaining its status as a cradle of advanced training in Agriculture, Information and Engineering Technology, and Management.

How does your ESL teaching program compare to that of other Chinese universities?

What is the most distinguished award or faculty member accomplishment at Zhongkai?

What innovations has the sub-tropical gardening research program discovered?

Winglok Textile Factory
http://www.gzpyyl.cn

This textile factory manufactures shirts, and other apparel for men and women. The company sells its products in China in addition to exporting them.

It appears as if your company was convicted or excluded from entry into the US in 2002. What was the problem, and what has your company done to resolve the problem?

How does your company prevent countries like the US from banning your products?

VTREK Audio and Video Products
http://www.elec-vtrek.com

This Audio/Video company was established in 1999 in Guangzhou, China。 They manufacture Audio & video products such as DVD players, DVD recorders, home theater systems and portable DVD players. The company products have been exported to European countries including Spain, Russia, Italy, Germany, Australia, Southeast Asia, and South Africa. 　

What sets your company apart from the heavy competition in the AV industry?

What new technologies have you developed, and how you advertise your products?

How much of your budget is dedicated to R&D and what is the procedure for coming up with a new devise?

Pegasus Footwear Company
http://www.pegasusshoes.com/

This Hong Kong based investment holding company, sells sports sandals, casual shoes, and athletic shoes. Pegasus Footwear Company is involved in the manufacture and sale of footwear products and footwear materials. Additionally, the company has two associate companies, Secaicho Corporation and Hi-Tech Pacific Limited. Some of the brand names which the shoe company manufactures includes Nike,Vans, K-Swiss, L.L. Bean Bite, and Caterpillar.

How do you keep costs competitive with other Asian shoe companies?

How would an American Entrepreneur enter the market designing apparel and shoes in China?

Producing over a billion shoes a year, what types of environmental standards does your company have in place?

Macau

Macau Polytechnic Institute
http://www.ipm.edu.mo

This Public University is relatively new, established on September 16, 1991. Formerly it was a part of the University of East Asia, Macau. Since it started the Institute has grown and prospered into a modern and fully equipped teaching and research facility with a team of experienced and dedicated academic staff. Some of their programs include schools of: Languages and Translation, Business, Public Administration, Arts, Physical Education and Health Sciences. Presently the Institution has approximately 2700 full time students enrolled in degree programs. Additionally, over 20,000 participants attend their professional training courses annually.

As a relatively new University what does your institution need to do to become a distinguished center of education?

What is the future of Macau Polytechnic Institute? What are the long-term goals of the University?

Do you recruit many students outside of China? Have you considered someone who speaks English to proof-read your website?

Sands Casino
http://www.sands.com.mo

The Sands Casino is the first western-operated gaming and entertainment destination in the People’s Republic of China. The casino is a gaming, dining and entertainment empire encompassing over almost a million square feet in southeastern China. The casino offers international and Chinese cuisines in addition to great service. Macau is set to earn $6.8bn in casino revenues in 2006 compared with Las Vegas $6.6bn. Foreign casino operators entered Macau in 2001, two years after Portugal handed the territory back to China.

How does a western-operated casino differ from one run by people from an eastern-operated casino?

How does Sands distinguish itself from other casinos in Macau?

Why is Macau the only part of China which offers gambling? What does Las Vegas do to compete against Macau as the largest casino revenue generating location in the world?

New Century Casino
http://www.newcenturyhotel-macau.com

The New Century Casino hotel is an exclusive international 5-star entertainment & leisure complex on the island of Taipa, Macau overlooking the magnificent view of Pearl River. Most of the favorite casino games include blackjack, baccarat, roulette, boule, Sic bo, Fan-Tan, keno and tiger machines(slot machines). The most popular game by far is baccarat with VIP high-roller baccarat generating more than 70% of total gaming revenue in 2004. Poker, however, is not yet offered in any of Macau's casinos.

Why isn’t Poker offered in your casino?

What type of players play your VIP high-roller baccarat?

What type of security measures do you have within your hotel/casino, and what happens to prosecuted thieves/cheats within your casino?

Wynn Casino
http://www.wynnmacau.com/

Opened in September 6, 2006, the Wynn Casino in Macau is a lavish resort offering gambling and gaming with a luxurious hotel, designer shops, several restaurants and a performance lake. There are approximately 375 slot machines, about 212 table games, and 600 hotel room’s space, a spa, salon, entertainment lounges and meeting facilities.

Future expansion will add 135,000 square feet of casino space and more dining and retail space. They also have plans to include a theater and a spectacular front feature attraction. After the expansion they will have roughly 1,280 slot machines and 420 table games.

How much of your casino revenue is taxed by the Chinese government?

How does your per-person profits compare with your casinos located in Las Vegas?

Has the government approved your expansion on the Cotai Strip? How does this process work?

Lisboa Casino
http://hotelisboa.com

Known as the "Monte Carlo of the Orient”, the Hotel Lisbosa/Casino is one of Asia’s finest casino hotels, boasting 15 acclaimed restaurants, 24 hour entertainment all under the roof of a glorious architectural designed building. The Casino is owned by Stanley Ho, who is the wealthiest person in Macau, and one of the wealthiest in Asia. This three-storey complex was built in late 1960s, and a 270-room extension was added in 1991 for a total of 927 rooms. There is a planned extension, the Grand Lisboa, is being built next to the current complex.

How has Ho designed his business to be successful and competitive against other casinos?

How does the casino market in Asia compare to the United State’s casinos?

How does the government effect operation of your hotel, and how does this affect your operations?

International game Technology
http://www.igt.com/au

The IGT is a slot machine manufacturer with headquarters in Reno, Nevada. They have branch offices in the UK, Canada, Australia, Japan and in China. IGT is most notable for their slot machines associated with licensed television and motion picture brands. Some of the television and movie themed slot machines include Wheel of Fortune, The Price is Right, Family Feud, The Joker's Wild, The Twilight Zone and Dream of Jeannie. Over the past 4 years they have acquired several companies such as Acres Gaming, WagerWorks and Venture Catalyst Incorporated.

Have you considered an alliance with your recently acquired companies before you completed the take-over?

Who gets to pick the television or movies for your slot machines, and how much do you payoff these companies for use of their name and brand?

How has the online gambling industry affected your business?

Shenzhen

Wal-Mart Global Procurement Center

Wal-Mart Global Procurement Services are used to manage the organizations direct import business deals and handle their direct purchasing. They identify new products, new suppliers and they build partnerships with their existing partners. Wal-Mart employee’s business development and supplier alignment teams to help guide world class suppliers to give the best value to their customers. Additionally, they have teams working with trade relations and global transport to keep ahead of changing international laws and simplify their global supply chain.

When do you decide whether to choose a company which is more environmentally sound, versus saving a few pennies per transaction?

Does Wal-Mart model their Ethical Standards to another company? Is there a regulatory agency making sure ethics are environmental issues are taken into consideration in China?

Why was your Procurement Center moved from Hong Kong to Shenzhen?

Yantian Port Logistics (YPL)
http://ytport.com

Shenzhen Yantian Port Logistics Co focuses on operating warehouses and container yard, in addition seeking further development in other logistics business areas. At present, YPL has three bonded warehouses with a total operation area of 36,000 m², a customs supervisory warehouse and four general empty container yards. In the future YPL has a plan to expand by constructing a Modern Logistics. Their main business involves in logistics related business including warehousing, container yards, consolidation of export cargo, distribution of import cargo, customs clearance for newly-manufactured containers, simple processing, transportation, customs clearance and quarantine, and customs documents processing.

When will Yatnain Port become an international port?

How will YPL distinguish itself from other competing ports and port authority companies?

What is the company doing to promote the development of the Yantian port?

Shanghai

Shanghai Urban Planning Exhibition Hall

The Shanghai Urban Planning Exhibition Hall has a total floor space of 19 thousand square meters. It fully displays the achievements of Shanghai in city planning and construction and embodies the theme of “city, man, environment, and development”. The Exhibition Hall adopts modern exhibition technology features exhibits which show the future of the city. The main model of urban planning, which is in the proportion of 1:2000, exhibits the urban geography and scenery in an extent of a hundred and more square meters within the inner elevated ring road. It is the world’s biggest model of urban planning. Also, there is apparently a pretty sweet rotating statue of Shanghai's modern buildings in the lobby.

How much of the future Shanghai land is set aside for parks and recreation?

Who is the most respected Chinese painter? Did European artists have any exposure to early Chinese artists/craftsman which is reflected in their artwork?

Who appoints the architects who decide upon the buildings and future of Shanghai?

Shanghai Museum
http://www.shanghaimuseum.net/

This museum possesses a collection of 120,000 precious works of art with collections of ancient Chinese bronze, ceramics, painting and calligraphy is specially celebrated in the world.

Founded and first open to the public in 1952 the museum developed very quickly in aspects of acquisition, conservation, research, exhibition, education and cultural exchanges with other institutes. In 1992, the museum moved because the Shanghai municipal government allocated to the Museum a piece of land at the very center of the city, the People's Square. Construction took three years and finished in 1996. The new museum is 90 ft tall with over 39,200 square meters. Its unique architectural form of a round top with a square base, symbolizing the ancient Chinese philosophy that the square earth is under the round sky, is a distinguished architectural combination of traditional feature and modern spirit. The present Shanghai Museum has eleven galleries and three special temporary exhibition halls.

What is the most prized piece of artwork inside the museum?

Why was the museum moved?

What is the oldest artifact which the museum holds?

KPMG
http://www.kpmg.com.cn/

KPMG’s China operations started in 1992, and now they have ten offices in Beijing, Qingdao, Shanghai, Chengdu, Hangzhou, Fuzhou, Guangzhou, Shenzhen, Hong Kong and Macau with a workforce of over 5,400 professionals. KPMG is a world-wide network of accounting firms providing tax, audit, and advisory services. The primary focus of the business is to turn knowledge into value for the benefit of the firm’s clients. The company employs over 113,000 people worldwide, and operates out of 148 countries.

How much of your business comes from foreign investors, as oppose to domestically within China?

What kind of sustainable accounting principals are at place in KPMG China?

How does the auditing process compare in China to the process in the United States? Is there more or less corruption within corporations in China?

Starbucks
http://www.starbucks.com

Named after a character in the novel Moby Dick, Starbucks is the largest coffeehouse company in the world. The business is based in the United States, with over 7500 self-operated and 5600 licensed stores in 39 countries. Starbucks serves coffees, espressos, tea, and ice-blended drinks, in addition to selling pastries, salads, and sandwiches. Starbucks has an Entertainment division where the business has started to go beyond refreshments producing books, music, and film. Starbucks first store in mainland China opened in Beijing's China World Trade Center. Later in 2000, it opened a store inside the Forbidden City. With new laws making it easier for Starbucks and other retailers to expand without local employees, they have since expanded to major cities throughout China. Ironically, there are no Starbucks branches in the two provinces of China where coffee is grown, Yunnan and Hainan.

Why were there reports in early 2007, that Starbucks might be forced to withdraw from the Forbidden City?

Does Starbucks use GIS (Geographic Information Systems) techniques to determine the best location for their new shops?

How does Starbucks prevent their company from becoming an eyesore for residents of China?

Callison Architecture
http://www.callison.com

Callison is an architecture company which provides planning and design services to retail, hospitality, mixed-use, healthcare and corporate clients throughout the world. They are presently ranked as the world’s top retail architect, specializing in graphic, interior, fixture and sustainable design. The company focuses their efforts on understanding market dynamics, which allows them to determine what to build, not just how to design it. Bringing business knowledge and design creativity brings excellence to their architecture firm. Based in Seattle, Callison is one of the largest architectural design firms in the United States. Callison's clients include Nordstrom, Inc., Microsoft, Gap, Starwood Hotels & Resorts Worldwide, Boeing, Hewlett-Packard, Nike, Guess, Swedish Medical Center, Seibu Department Stores of Japan, and General Growth Properties.

What are some of the sustainable architectural design projects currently in place at Callison?

As a firm which prizes creativity how do they hire/find these types of people?

How is building sustainability changing the architectural industry, and how is Callison guiding the way?

CF Racing
http://www.cfracing.cn

Based out of Beijing this company is involved in racecar equipment.

Has CF looked into using eco-friendly designs to appeal to the younger environmentally friendly consumer?

What is CF’s strategy for future expansion?

Augmentum
http://www.augmentum.com

Augmentum is a company which offers software solutions services and IT services for Fortune 500 companies. The business also creates product development services to software companies, with teams who developing complex software themselves. They are unique because they develop software from people who have outsourced development for their own most complex, most important, and most profitable products and solutions. They work with companies such as Intel and Microsoft building software that gives consumers enabling abilities.

How do you overcome trust issues being an outsourcing company dealing with large American firms?

Explain what your company culture like?

How do you compete with Indian outsourcing companies?

Suzhou

Suzhou Industrial Park
http://www.sipac.gov.cn

The China-Singapore Suzhou Industrial Park (CS-SIP) was started on February 26th, 1994 when the Chinese Vice Premier and the Singapore Senior Minister signed an agreement on the park in Beijing. The industrial park built in east Suzhou, China has significant Singaporean input. The park was built near-simultaneously with the competing Suzhou New District industrial park which has caused controversy.

After occurring a loss of nearly $90 million (US) during the first five years of operations, the Singapore conglomerate lowered their ownership. One year after they reduced their share, the park saw its first profit of 3.8 million.

Has Singapore taken any steps to reclaim their part of the Suzhou Industrial Park?

How much does the industrial park pollute, and how do you regulate the damage?

What are the most profitable products manufactured in your industrial park?

Carrefour China
http://www.carrefour.com.cn/

This French retailing giant offers top quality items at discount prices. They make products ranging from clothing to household goods such as T-shirts, skirts, jeans, trousers, underwear, shoes, towels and bedding. They have headquarters in Paris, and locally in Guangzhou. Recently they have set up ventures in Kunming in the southwest capital of China's Yunnan province, and in Harbin, the capital of northernmost Heilongjiang province.

Their ‘First Line’ brand offers inexpensive kitchen appliances, audio, video and accessories, whereas their ‘Quality Line’ offers high quality and safety guaranteed fresh products such as pork, salmon, apples and oranges.

How do your company’s sales of such a diverse range of products help your profitability?

What will be the next move for expansion within Carefour?

Doesn’t four mean death in Chinese? How did you come up with the name for the company?

Beijing

21 Manager
http://www.21manager.com

21 Manager hosts a website where managers from Asia come to post info, ideas and share information. Some business ideas which managers talk about includee project management, marketing, human resources, and business culture.

On their website managers discuss recent business studies and they can exchange book recommendations and managerial suggestions. They also have job recruitment on their website.

Have you considered making your website in English, for increased business?

How do you generate revenue if your website is free?

Center for International Business and Ethics (CIBE)
http://www.cibe.org.cn

Located at Beijing Dongfang University, CIBE is an international non-profit research institution aiming to integrate ethics into businesses strategies by assisting the communication between scholars and businesses through seminars and conferences. Founded in December of 2004, CIBE’s focus is to increase awareness and understanding of Ethical issues within China. The institution hopes to become a leader/pioneer encouraging companies to make ethical business decisions. They create and distribute publications, programs and broadcasting material to organize projects and events to promote sound business ethics.

What is CIBE’s point of view about punishment when ethical issues are broken?

What organizations in China break most of CIBE’s ‘ethical codes’?

How do you convince a person that being ethical is more important than being profitable?

Thompson
http://www.thompson.com

Thompson is a publishing group starting in 1972 which provides professionals in business, government, law and academia the most authoritative, timely and practical guidance available. They provide tracking, and complying with, the dynamic regulatory mandates facing their organizations in a variety of areas. Some of the areas which they offer services in are with pensions and benefits, grants seeking, grants management, health care and with environment issues.

Which area of publication is seeing the most change and why?

How does Thompson keep such a healthy customer/ relationship?

How does Thomson keep a competitive edge over similar companies?

Lenvo
http://www.lenvo.com

Lenovo is an international technology company which develops, manufactures and markets cutting-edge, reliable, high-quality PC products. With over 19,000 employees worldwide Lenvo gives extra value with professional services that provide customers around the world with smarter ways to be productive and competitive. The company’s success is based on whether customers are able to achieve their productivity goals. Starting in 1984 with 11 computer scientists in Beijing, China and about $25,000 in startup capital, the company founded Legend which has helped introduced PCs to Chinese households, promoting PC usage in China. Later changing their name from Legend to Lenovo, the company is now a leader in the global PC market, with approximately $13 billion in annual revenue with products that serve consumers worldwide.

Has donating computers to victims of the SARS epidemic in China helped sales?

How much can Lenovo save with relatively inexpensive labor by operating out of China?

What are the key techniques your company uses to keep such high market share of the Chinese PC market?

Peking University
http://en.pku.edu.cn

Originally known as the Imperial University of Peking, the University was established in 1898. With 30 colleges, 12 departments, 93 undergraduate specialties, 199 specialties for Master's degrees and 173 specialties for PhDs, National Peking University it is currently ranked as the best university in Asia, (14th in the world). The university has one of the largest pools of international students in China with about 2000 mostly from Korean. The university is one of the oldest in China, and has a university policy which regulates the name use of Peking University in English rather than Beijing University to avoid confusion with Beijing Normal University.

Why doesn’t Peking University see higher numbers of students from North America or Europe?

What types of research is your university most famous for?

As an older establishment, what does Peking University need to do to remain cutting edge and professional?

The World is Flat: Book Critique

2007-05-18T16:41:00.002-07:00

The World is Flat highlights how, practically overnight our world has become so interconnected with modern technology that it functions on an even playing field. Competitors around the world now battle for jobs in

America

, as we outsource and search for low paying employees. The book describes how world has become one in which unskilled jobs are leaving the US…and China and India

are having (and will continue to have) a greater impact on the near future. Friedman explains that the primary drivers flattening of our world occurred because of relatively new technologies such as the personal computers, the internet and fiber-optics. History combined with suggestions for the future of how to handle our new globalization make Friedman’s book a decent read.

Mr. Friedman simplifies his theory of the flattening of the world into ten main topics. Most of these topics are technology based such as the introduction of Netscape, workflow software, open/out and in-sourcing and supply chaining. He provides a history lesson, as he travels through the world explaining how much the world has changed practically overnight. This book seems to be mostly directed towards business minded individuals, yet it should be interesting to anyone who wants to preview the direction where our world is heading. While the world is becoming flatter, benefits are seen all over the world as some industries and communities are becoming better connected, more efficient and more prosperous. One major problem which Friedman fails to really identify is to provide solutions to the immense environmental problems which the flat world creates.

Friedman provides personal insight on the developing problems of the world and plays devils advocate attempting to ring out the questions that must be addressed. While the flatteners he described play an important role in understanding why our world is what it is today, I couldn’t help but notice how some of his examples were practically identical. Another weakness is Friedman’s failure to address the variety of readers who may be reading this book, and he also contradicts his original premise with the chapter ‘the Unflat World’. While he does provide alternative points of view to many of his arguments, I am not certain that individuals of different disciplines would agree so much with his book. Finally, Friedman’s book may be a disappointment if you have already read his previous book The Lexus and the Olive Tree, as he basically rehashes his main arguments in a longer edition (without as much emphasis on technology).

Friedman focuses much of his story-telling about how we will see China becoming a stronger force in our global economy. Fu bu guo san dai a Chinese proverb is quoted in the book referring to the fact that wealth doesn’t make it past three generations. China has been in a slump economically over the past century but it is far too apparent that they are returning. Take for instance the Olympics of 2008, joining the WTO…or the sheer number of Chinese people who have the desire to have a better life. This includes the rise in Chinese applicants to American Universities and the increased amount of Chinese training to become engineers and PhD’s. Friedman refers to China over 400 times in his novel…which should only emphasize the fact how important their country has become and will continue to be in globalized world.

As the book puts it “China is a threat, China is a customer, and China is an opportunity…You have to internalize China to succeed. You cannot ignore it." It is almost as if China has become the Wall-Mart of the world for businesses. If you ignore them [for many businesses], you simply won’t make it since costs are so ridiculously low there, you will hardly be able to survive operating elsewhere. Friedman brings this realization to life in his novel, as he suggests that rather than fighting off the flattening, we should steer it in the right direction. In an article recently published by Freidman, he steps up and addresses the environmental concern coinciding with globalization. He suggests that if we want to continue to enjoy the lifestyle and benefits of today, we do need to fuel our future in a cleaner, greener way. He suggests the next president should be more environmentally focused and suggests the motto: "Green is the new red, white and blue." If we really want to switch the world’s inconvenient truth we should start by directing China and set the example here in America.

Now that ‘being green’ is becoming more mainstream, perhaps Friedman should update his book to make a green edition? With globalization comes a heavy cost… In September of 2006 China's E.P.A reexamined their GDP and found out that health problems, environmental degradation and lost workdays from pollution had actually cost China $64 billion, or an estimated 10 percent of its total economic output for 2004. Luckily, China is finally having their eco-epiphany. While Freidman focused on how the flattened world has helped to connect everyone and make living a better place for the middle classes of the world, allowing anyone to publish and access information and business to flourish in remote corners of the globe, it has come with a cost.

Friedman’s novel should be beneficial to anyone who wants to gain a grasp of the world without flying all over it as the author has done to collect insight for his book. Reading this book may not provide the answers to solve the problems associated with globalization but it presents many of the fundamental ideas which business people can use to catch up while they were asleep. I would recommend this book to anyone who is not familiar with globalization or those who are living in a university bubble.

Do the Chinese Surf?

2007-05-16T23:23:00.000-07:00

It depends on what kind of surfing you’re talking about. What was once an industry influenced primarily by Hawaii, California and

Australia

, there is a sleeping giant who has been awakened…Chinese surfboard manufacturing. In an industry worth over 8 billion dollars, it is no wonder why China is getting involved. With the disappearance of the Clark Foam [the former leader of ‘blanks’ for surfboards], there are more and more Chinese surf manufacturing plants popping up all over China.

Most of these Chinese boards are being stamped with expired logos from the past, such as The Realm or Canyon. Next time you’re at Costco look for one of these boards. All these boards are being hand-made, by Chinese shapers as oppose to machine produced. The ironic part…none of these Chinese shapers have ever surfed, nor have they ever visited the beach. While Chinese surfboard production does not represent a large part of the sales market yet, it surely will in the future as this new Asian growth is merely the tip of the spear. Further expansion into China is certainly going to occur, primarily because surf-shop owners of the U.S. are begging to dually have the long sought-after margins, and to quench the demand for low-end/beginner boards.

While most MBA’s probably are too busy with business matters to get a board and go surfing, this is an interesting phenomenon/opportunity that we’re seeing across most industries. Asia is clearly changing the way we do business. Similar to the Wal-Mart dilemma, this puts some skilled crafts-people out of jobs…Diversification of skills and products will help to alleviate this problem evolving the industry to the next level. Debates over whether tariffs should be put into place have been made to block the importation of Chinese boards, but would this be fair?

Who should determine whether Asia should be able to dump cheap products on US soil?

CAL POLY CHINA BLOG

Guns, Germs & Steel: Book Review

2007-03-04T16:41:00.000-08:00

Jared Diamond’s book sets out to explain why civilizations developed and for what reasons. In a nutshell this review will help to explain why China was able to create a unified society early in history, and how they accomplished it. Being a professor in bio-geography, Diamond uses his background to explain how most early civilizations progressed from hunter gatherer societies into agriculture due to their location, and because of random developments. He argues how important the role of geography plays in the earth’s earliest inhabitants. Inevitably, those civilizations with larger land masses, larger domesticated animals and more fertile lands would have an edge on other civilizations and would later contribute to the power of today’s modern nations.

This book best serves an audience which appreciates taking a different viewpoint than most history accounts. By analyzing the environmental situation and geographical layout of the most primitive societies, it becomes perfectly clear why some progressed and gained technology, while others have only made minor adjustments in the previous centuries. I believe this book is useful to business students as it portrays a view of history from a scientific perspective which most readers normally would not recognize.

Some weaknesses in book include its explanations rely heavily on scientific thought. Some people who are highly religious and believe in creationism could have a great deal of problems dealing with this book’s central concepts. This is mainly due to the fact that the author uses evolution to explain why pivotal events occurred in history as oppose to creation by god. Additionally, Diamond goes out of his way to cover himself claiming he is not Eurocentric. Unfortunately, he does in some sense infer that Europeans were destined to rule the globe…by arguing that their germs, and domesticated animals helped Europe’s civilization grow faster than other civilizations. I could see how some would criticize this and may even find it offensive.

Focusing more on China, Diamond explains how China has been Chinese since the beginnings of the countries recorded history. Though most Americans view Chinese people as being genetically similar, the author points out how different areas of China are influenced by their neighboring societies such as Vietnam, the Philippines, Tibet and Nepal. It is interesting that China, due to it’s long history, has only eight main dialects, whereas regions relatively newer regions such as New Guinea has thousands of languages.

Diamond also focuses on how China is one of the birthplaces of plants and early domestication of animals. Weather patterns also play a role in the formation of civilizations. For example, in the dryer northern regions of China millet would flourish, while in the southern wetter region of China rice prevailed. Animals which were able to be domesticated including the water buffalo, pigs, dogs and chickens also allowed China’s population to progress. While these animals helped China develop an early civilization, they lacked larger domestic animals. Diamond also emphasized how Eurasia is located on a east-west axis which allowed pivotal crops to be traded between these two immense continents.

Interestingly enough, Diamond proposes that China’s size and diversity amongst its’ early animals may have been the origin of Europe’s bubonic plague. It will be interesting to see if history will repeat itself and we will see another epidemic in the next century with third world country populations booming. It would surprise me if we saw an event similar to the plague sooner than later. Diamond also suggests a reason for the unification of China so early on was due to its river system, and lack of mountainous terrain which allowed for political and cultural unification. It’s interesting to think about how something such as geography (ie Mountain ranges, rivers, etc) play such an important role in all of human history. We can use this knowledge to forecast growth, anticipate problems which can be a valuable asset in business.

Lastly, we can see how important writing was to the Chinese to spread power amongst its people. Transmitting knowledge thought the generations allows future generations to further develop and become more sophisticated. Additionally, travel through continents with this knowledge helped to spread civilization. Writing is known to exist in China nearly 3300 years ago and is thought to have evolved independently. While societies today recognize how important literacy can be, in ancient times there were restrictions of mass literacy amongst people, to prevent plots and organizations being formed to overthrow the government. Today, we can see similar restrictions with the proliferation of mass media, and the Internet. China hires thousands to patrol the Internet daily looking for citizens who have opposing views about the government.

I found it interesting how the author uses natural phenomenons such as location (on a north-south axis vs. a east-west axis) and native animals to derive conclusions about why things are the way they are today. Never before have I come across a book which overlooks dates and important people, and focuses on the reasoning why these events occurred. To me, Diamonds reasoning makes perfect sense, and makes me question why our education system is focused so much on memorizing facts rather than recognizing the science behind events. Therefore, I find this book to be a perfect complement to further anyone’s understanding of history through connecting how our earth’s ecology, evolution, and geography can play a critical role in understanding history.

Overall, I thought Diamond did an excellent job getting the point across and explaining a detailed template for answering Yali’s question…of why certain groups of people are why they are.

Placing People Before Profit?

2007-01-16T16:20:00.000-08:00

Providing health care to over 1.3 billion people is a feat that doctors, hospitals and the Chinese government deal with daily. It seems that any single person able to make a significance difference in improving the health of thousands in any population should be lauded. While this is the case for a Chinese doctor, Hu Weimin, he is also being shunned by hospitals for interfering with their profits. Dr. Hu is harmful to the hospital businesses in China because he provides widespread free advice on the most common treatable illnesses in his home region of the Hunan province. In a country where citizens pay more out-of-pocket for health care than any other nation in the world, it is seems appalling that hospitals discourage preventative medicine.

Currently it seems that some Chinese hospital management have a primary focus of commercial profit rather than public service. While hospitals recognize that they need reform, it is unfortunate that financial incentives bring corruption into these environments of healing. Bonuses are given to doctors who prescribe laser surgeries and certain Chinese & imported drugs. Doctors profit directly from this reward system, which provides a substantial part of their salary. A fateful byproduct of the greed stemming from doctors trying to make a better living includes the mis-prescription of drugs. Though this probably occurs from time to time in the US, it is a scary thought to think a doctor could be misusing their medical expertise to profit…I hope I don't need to go to a Chinese hospital for fear I might receive incorrect medication. While any business has a necessity to prosper, hospitals are organizations which have moral obligations to put the people first.

Since millions of Chinese can not afford health care it is critical that preventative medicine be more widespread. While Dr. Hu is hero leading the way, saving lives and substantial amounts of revenue, he is also causing major headaches for hospitals. Perhaps hospitals should help Dr. Hu’s cause and create preventative programs to teach the masses easy ways to alleviate commonly treatable sicknesses. When do businesses go too far to make a buck? Should the government be policing these hospitals to minimize corruption?

China Rises

2006-12-15T13:25:00.000-08:00

China, the oldest civilization on earth, is in the midst of an awe-inspiring period of rebirth. The nation is currently the scene of the most extraordinary economic, social and political transformation of our time. But such rapid progress has a downside, and China is presently faced with an enormous population, a strained environment, and an unequal distribution of wealth and poverty.

Combining the finest documentary talent of CBC, the New York Times and other broadcast partners, CHINA RISING is a special CBC co-production which takes viewers inside this vibrant, fascinating nation during what may prove to be the most important period in its history. Airing over two nights, China Rises explores four themes, each of them featuring compelling first-hand accounts of the triumphs and disappointments of the people who make up China's diverse population. - source: canadian broadcasting corporation

The following two questions are in relation to CBC's China Rises Video

3. What character/person in the show would you most like to meet and have dinner with in China, and why?

I would enjoy having dinner with Ai Weiwei, the Artist who is building the stadium for the 2008 Olympics. This man seemed very intriguing the way he was expressing himself, both with his company (recall the 4 letter acronym), and through his creative artwork. He seems to be very powerful, but in a reserved and entrepreneuring way. I feel a connection with him, and believe the way he is showing his skepticism towards authority is constructive, conducting himself it in an expressive way (which seems to be unlike most Chinese). Due to the fact that his father was a leader, you could feel his tension and aggression towards leading a reform. I was impressed with the fact that he was able to stand out and be imaginative in a society that has condemned such individualistic characteristics for a long time. I believe it will be individuals like Ai Weiwei, which will help provide some power back to the people, and let China rise to their full potential.

5. When you see poor uneducated people in Chinese factories create the things you and I buy on the cheap at Wal-Mart, Ride Aid or Target, it may make you feel sad and/or angry and/or disillusioned. If so, how do or will you reconcile those feelings with your purchases of such products? What plans do you have to change your purchasing habits, if any? Do you help or hurt these workers by purchasing such prodcuts?

I am looking forward to viewing the Chinese factories as it will be a realization to all of us how well off we are in the US, even if you’re in the lower class. At first, I think about not purchasing these products as it only creates a higher demand for poor uneducated workers in China. At the same time the movie claimed that these people would otherwise be struggling, eating noodles in the hills of Loess Plateau if these workers had not migrated to work at the factories. Still, does this really justify us buying these products?

Personally, I do not believe it is fully justified nor do I believe that we fully understand the full facts on this matter. This is why it will be an eye-opener to view a factory in person. I believe if the living conditions were improved and these factory workers were fed, and fully compensated than I would not think twice about purchasing their products. I thought it was great that Zhang Yue, the CEO of Broad Air Conditioning was able to create a business that was more sustainable, which grew healthy organic food for their workers, and helped the employees live a healthier life. After all, what is the point of having wealth, if you are not healthy or happy with your life?

In contrast, looking at a business like Zongshan’s motorcycle factory, the workers seemed unhappy as the company was run like a military installment. Some people flourish under this structured environment, yet this organization style provides little room for individuality or inventiveness within a company, which is imperative for a business’s growth. Repressing rights and originality will lead to unhappy, less productive workers and over time anarchy. Additionally, it seemed that many of these factories are forgetting about their environment in their rush to build a middle class and become a more wealthy China.

As the past may give China confidence in the future, perhaps factories and the government should take a step back and recognize if precautions are not taken now regarding their environmental degradation, it will probably have devastating consequences for the next billion Chinese. As the movie pointed out, is it ethical that your country cares more about having economic success and wealth than protecting the health and lifestyles of the majority of its people?

Collapse: Book Review

2006-11-23T23:51:00.000-08:00

By Jared Diamond

Pulitzer prize winning author, Jared Diamond examines how great civilizations in the past have collapsed, offering insight to how modern society can benefit from their failures. While Diamond focus on several civilizations in his book, in this blog I will focus my discussion only on one…China, and their developing modern problems~

Diamond highlights China’s environmental problems in the following categories. Air, water, soil, habitat destruction, biodiversity losses, and mega-projects. He explains how air pollution in China is the worst in the world, with acid rain falling in ¼ of their cities (over half of their rainy days annually). To top that off, water quality in China is some of the worst in the world, with severe water shortages in over a hundred cities annually. Additionally, some business suffers halts in industrial production due to lack of water. Perhaps if businesses were more efficient about their use of water, or they reclaimed more of it, they would not need to shut down entire factories due to the lack of H²0.

Soil problems such as desertification are affecting China, and since the country does not have many recycling programs according to Diamond, many of the cities are surrounded by trash. I am interested to see how bad their environment is as I have studied solutions to such problems, and soon China will need to step up to the plate and do a better job taking care of their environment. Also, since fish consumption is a large part of the Chinese diet, overfishing has resulted in massive depletions of Chinese fishery stocks. Many species of fish which once flourished in the rivers and coastal waters must now be imported, while Chinese rivers have recently been closed down to overfishing. Diamond explains how China and the rest of the world falls into the Tragedy of the Commons…where there is a conflict for resources between individual interests and the common good. Fortunately, new standards are being taken practicing sustainable fishing.

Additionally, China’s bio-diversity is at risk with over 10 percent of the world’s plant and terrestrial vertebrate species living in China. Unfortunately many of these species, such as the Panda, are endangered due to China’s bulging population. The author blames China’s escalating habitat destruction is mostly from the fact that their nation is consuming wood faster than they can renew it. Diamond points out that Big business often maximized its profits in the short term by harming the environment and people. Though, some businesses are becoming sustainable with the help of government, Diamond argues that these environmental business will need public support in order to survive. He suggests that the only way that business can be successfully eco-friendly is for the public to prefer to buy eco-friendly products, thereby increasing demand for these goods, driving away competitors who can often produce the same product more inexpensively by using environmentally harmful methods. Diamond points out that without government intervention and support from consumers it will be difficult for environmentally friendly business to prosper.

Another important aspect which Diamond confronts is how international trade has effected China’s environment. A 60 fold increases in international trade has resulted in invasive species becoming major problem in China. These pests effect agriculture, and as have been known to be a primary cause of food shortages. In a nation struggling to feed over a billion hungry mouths, the last thing they need is an invasive beetle eating their crops. The author also confronts a unique problem of exporting which we often overlook….Homosapien exportation. China is exporting humans at alarming rates. While studying abroad in New Zealand in 2004 I was privileged to witness first hand how dramatic of an effect China is having on an island nation such as New Zealand. With a population of just over a million people, the New Zealand and Australian governments are granting permanent visas to Chinese in order to boost their countries revenue. Unfortunately, this is becoming a controversial issue, and I was able to see it first hand. New Zealand is experiencing the effects of a growing foreign population as the cities are growing at rates higher than ever before.

Diamond continues to point out China’s worldwide effect on global air quality. The country has exponentially increasing Carbon Dioxide emissions & the world’s highest sulfur oxide emissions. China is nice enough to share these pollutants with parts of Asia and the south pacific as the particles are propelled eastward to Korea, Japan and eventually across the US, and Canada, due to their coal-burning economy. Ironically, the pollutants which are produced by American Industries in China are eventually blown back into the country. It’s kinda like pissing in the wind. Nobody wins.

More and more, the Chinese have the desire for the standards of living similar to first world consumers. This is an extremely frightening thought. While it is selfish of privileged Americans to want to keep our first world standards and not share, the implications of China’s standard of living, rising to first world standards could be horrific. In ‘Collapse’ Diamond explains if China’s one billion people were to increase their per capita consumption rate, this would nearly double the total resource use and environmental impact of China. In a country which already has extreme environmental problems, the effect of this rise in the Chinese standards would affect everyone. Diamond anticipates that China’s problems will becomes the rest of the world’s problem. There’s no way around it.

Since China’s joining the WTO, it has lowered the tariffs and increased imports and exports. Diamond suggests that one benefit which could result from China’s WTO involvement is that more strict environmental standards would be enacted in the country. Diamond elaborates on disturbing facts in ‘Collapse,’ but he does see light at the end of the tunnel. China has begun to recognize that environmental problems are arriving in China. With the Olympics arriving in 2008, China has begun to erect a Greenwall or treebelt is being built around Beijing to stop harmful dust and particles to reach the city. Additionally, China has enacted air pollution restrictions on cars mirroring those in Europe. Over 1,000 nature reserves have been created to help preserve its biodiversity. Other Chinese methods of environmental progress mentioned by Diamond include replanting projects, raising fish in rice fields and logging bans. While these environmental solutions alone will not solve the environmental problems produced by one billion Chinese, they are on the right track.

Diamond points that the ‘top down’ government style of China is beginning to recognize that population is no longer the largest problem to their bulging country, but rather it is the environmental problems resulting from its people. China’s interests will need to include the environment if it wants to sustain itself as the next world superpower.

Another interesting point Diamond presents is how pollution intensive firms move to China to do business. Some of these companies have left their countries of origin to set up shop in China as they are now illegal in China. One such industry which has affected me has been the surfboard industry. The once dominant Clark Foam, which produced nearly all the foam needed for surfboard production, was shut down in December of 2005, due to increasing pressure from stringent California State and federal EPA standards. Now that Clark foam is no longer producing surfboard blanks, production in China will surely increase, as ‘cookie-cutter’ board are now being produced in mass quantities in China, and supplied by warehouse stores such as Costco. It seems unfortunate that pollution intensive industries of first world countries being sent to the China. Not only are American companies loosing revenue, but our country is often hit like a boomerang with the same environmental problems we originally tried to banish.

As a fellow geographer, Diamond explains the phenomenon of struggling civilizations in a way which I can truly appreciate. Using my MBA degree and undergraduate Environmental Science BS degree I am optimistic that I may be able to create a positive impact about the way China is currently doing business. While correcting environmental problems is sometimes costly and inconvenient, methods are available which increase efficiency which would in turn increase revenue and help conserve the countries environment for the next billion Chinese. Nobody wants to live in a world where you have to walk around with a gas mask on, and worry about picking up a disease when you walk outside. China seriously needs to confront these issues as they are heading down a dangerous road.

China bound

2006-11-06T00:06:00.000-08:00

This is a blog dedicated to China and the MBA program at Cal Poly in San Luis Obispo, California.

Expected departure date: June 20, 2006

see Cal Poly's main blog

Biological Business in China

Deep in the remote western mountains of the Xinjiang province in China, local botanists search for miracle drugs to share with the world. Drug companies such as Swiss drug giant Novartis AG are looking at China for new drugs from ancient Chinese remedies that exist in plants and fungi native to the country. Due to the increasing costs of developing new drugs, companies such as Swiss drug maker Novartis are optimistic that traditional Chinese medicinal cures will lead them in the battle to fight modern diseases.

It is important to recognize there is a fundamental difference from the way China and the way the West discovers drugs. Over centuries, Chinese medicine men have tweaked concoctions with variable amounts of different substances until they achieve their desired medicinal purpose. This was mainly completed by trial and error, so Chinese doctors are not certain which parts of the body the medicine is targeting. Alternatively, western doctors take the reverse approach by finding the targeted area of the body, and working backwards to find the correct chemical compound to cure the problematic area. This is why collaboration between the East and West will probably not occur.

Fortunately, drug companies such as Novartis and French Drug maker Servier are working together with the Shanghai Institute of Materia Medica (SIMM), to isolate the active compounds in Chinese traditional medicine by testing the raw extracts from plants collected by Chinese biologists. Over the past three decades SIMM has been hunting for the rare plants and herbs used in traditional Chinese medicine to treat ailments ranging from cancers to common aches and pains. The way Novartis sees it, ‘China has thousands of years’ experience of using plants in Chinese traditional medicines. The idea was, why not use the Chinese experience as a kind of filter.

Novartis has previously used traditional Chinese cure for fever to fight malaria with the plant with a native ‘sweetworm’ plant. The cure for this disease was found written on silk in a tomb which dates back during the West Han Dynasty which existed over 2200 years ago. In the 1970s scientists working for the Chinese military used this drug in Vietnam to combat malaria. Novartis later decided to make a deal with the Chinese to purchase rights to the sweetworm plant for several million dollars. Today, over 1,000 natural products have come to Novartis working with SIMM, resulting in cures for a number of diseases. As the multi-billion dollar pharmaceutical industry progresses into the next generation it will become increasingly important for them to protect their future…and defend the world’s endangered environments.

Now you may be asking yourself…why should business worry about preserving the natural environment of China? There are several moral issues to this question. First, If China continues to grow westward as it currently is, many of the drugs which organizations such as SIMM are searching for will become extinct before they are obtained. It is estimated that 15 to 20 percent of higher plant varieties in China are endangered (threatening the existence of 40,000 species of organisms related with them). Continued westward expansion of Chinese industry could threaten these species which may hold the answers for solving the world’s most crippling diseases.

Second, by preserving their environment the Chinese government can ensure the next generation of Chinese will have enough to eat, clean water to drink, and healthier people. China already has the worst air quality in the world. Fortunately, China is now awakening to these rising environmental issues and is taking action by building reserves, botanic gardens, protecting endangered endemic species and by building genetic banks for rare plants. Additionally, with the Olympics coming in 2008 their government is attempting to give China more eco-friendly by erecting a ‘greenwall’ or ‘treebelt’ around Beijing to stop harmful dust and particles from reaching the city.

Lastly, helping out the environment is an important ethical issue. Many businesses operating today maximizing profit in the short-term by harming their environment and their people. Take for example the logging industry in China. With forests being cleared in China, not only is the world loosing reserves potentially for future miracle drugs, but these trees no longer exist to filter out CO² and other pollutants in the air which filter out other diseases such as bird flu or SARS. Does this mean they should stop cutting down trees? Of course not. At the same time, business’ must be aware and responsible for the actions they make and the consequences which result.

With nearly 10 million kilometers of land, holding over 10 percent of the world’s plants and terrestrial vertebrate species, China’s rich biodiversity is faced with a critical situation. With international trade increasing in China at increasing rates, exotic pests and invasive plants are creating additional stress for the already endangered varieties of medicinal plants, fungi and herbs. Who is responsible for saving the Chinese environment? While the government is playing an important role, I believe business’ need to play a stronger role in protecting these future resources. The pharmaceutical industry is a multi-billion dollar industry. Imagine the economic difference between finding a fungus in the Chinese forest which holds a cure for Alzheimer’s vs. clear cutting a few acres of the same forest to sell as lumber. The answer should be obvious…

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Book Review: Collapse

By Jared Diamond

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If there is a ramp set up near 'the wall', I'd love to try it :-)