Sunday, June 12, 2011

Home Sweet Home

For now this will my last blog post. I have been home a week and am still feeling the effects of the trip both positive and negative. The jet lag has been horrible and I haven't fully slept a full night yet and I've been fighting off and on all week with the stomach bug. On a positive note, as I share my pictures and stories with friends and family what I gained from the trip far outweighs the lasting effects I'm experiencing now.

I feel like I am still processing everything and will be for a time to come. But again, I can say it was an incredible experience that I will recall fondly for the rest of my life. I feel lucky to have shared it with such a great group of people who I will forever be connected to through this experience.


After a few hours of sleep we were on the bus headed to the Great Wall. It was a quiet bus ride considering the lack of sleep the night before. Looking out the window at Beijing you can already tell that Beijing is very different from Shanghai. Shanghai is the much more modern city with Beijing having a much older world feel. Still a big Tier 1 city, Beijing looks much older than Shanghai and there are far fewer high rises and big buildings.

When we arrived at the Great Wall, even from afar it is quite an astounding site. We took the chair lift up to the wall and it was quite beautiful. We certainly lucked out with a beautiful day and it felt like you could see for miles. It is hard to put into words what the experience was like but it is probably one of the most incredible places that I have ever been to. The pictures don't even do it justice.

After we took the toboggan down from the wall we were treated to a beautiful lunch at a restaurant with an incredible view of the wall. The owner was so proud of his restaurant and hotel, he gave us a tour of the whole place. All of the rooms have beautiful views of the mountains and the wall. After experiencing the business visits and cultural visits it is clear that the Chinese people are very proud of their work and heritage like the Vietnamese people.

Next stop after the drive back to the city was the Forbidden City. I couldn't believe how big it was, you expect an Emperor's Palace to be large but this was incredible. All of the buildings and architecture were very beautiful. Because of the size of our group and how quite our guide was moving it was very difficult to hear all about the palace.

On the other side of the Forbidden City was Tianeman Square. This was the only place on the whole trip where we saw any military presence and it was also the place where I felt like I was in a Communist country. Having seen the site so many times on television it was eerie to see it in real life. Another impressive site.

Our final stop before our last dinner was the Pearl Market and more opportunity to shop. Again the market was much better than in Vietnam. We spent most of our time up in the jewelry section which is much less aggressive than the lower levels. I still had some trouble negotiating but luckily one of my classmates helped me negotiate my pearl purchase.

Our final dinner was nice, although I think we were all exhausted and ready to be headed to home I think we were all sad to be saying goodbye. I have to agree with the sentiments expressed by everyone at the dinner and I do think that the effects that this time have had on us will only become apparent over time. For me, it was an incredible experience, probably once in a lifetime for me, as I don't know that I would have gotten to Asia otherwise. I feel priviledged that we were able to experience two countries in a very unique way, but I won't lie I am happy to be headed home.

Thursday, June 9, 2011

Last Day in Shanghai

Thursday was our last day in Shanghai and it didn't start out too great for me. I started the day with some of the stomach issues that have been plaguing the rest of the group. But with a full day of siteseeing in Shanghai and a flight to Beijing that night I had to pull myself together to head out for the day.

First stop, the Jade Buddha Temple. It turns out that it was the equivalent of a holy day in Buddhism so the temple was packed with worshippers. At first I thought it was a bad decision to be going to the temple on a day like that but it was interesting to be able to see people practicing their religion. As we moved through the different rooms people were paying respect and making offerings. It is quite different than church on a Catholic holy day. The temple was beautiful and the Jade Buddha was incredible. No pictures were allowed of the Jade Buddha but below are a few pics of the outside of the temple.

Our next stop on the Shanghai express was old Chinatown and some market shopping. As we approached the market I was hoping that this market experience would be much better than the one in Vietnam. Luckily, it was, there was still a lot of hustle and bustle but the market was open and the sellers were not nearly as aggressive as in Vietnam. We went to the silk market first and then the pearl market, where less negotiation is allowed. I almost found this relieving, I had a hard time bartering prices with the vendors and I'm sure I overpaid for some items. I'm glad it was a better experience than in Vietnam. Next on the agenda, lunch, which did not go well for me. I thought I was feeling better but after all of the various smells of the food I was feeling horrible after lunch which led me to skip out on the next 2 stops, the Bund and the Urban Planning Museum. I wasn't too upset about missing the Bund since I had seen at night and think that is a much more impressive view.

Our last stop on the tour was the Jin Mao Tower, next to the World Financial Center, an 88-story building. The views at the top were incredible and on a completely clear day I think it would have even been better.

To top off our day we took the magnet train to the airport, an 8-minute train ride replaced an hour bus ride to the airport. Unfortunately our flight ended up delayed for about 2 hours and by the time we arrived in Beijing, got our bags, and then got to the hotel it was 3:00am. As we were standing in the hotel lobby waiting for our keys and passports to be scanned I couldn't help wondering if the trip to the Great Wall would be worth it.

Bullet Train to Hangzhou

Another early day today, we are taking the bullet train to Hangzhou, a Tier 2 city. We have both a cultural visit and 2 business visits lined up for the day.

First stop was the Longjing Tea Village. It was a beautiful drive up to the Tea Village, a big change from the hustle and bustle of Shanghai. Lots of trees and small villages lined the road up to the Tea Village. Our guide told us that the area is a weekend getaway for many people in the city, which was not surprising.

At the Tea Village we learned about the process of making green tea and then learned from Dr. Tea about the properties of green tea and the differences between the different types. We sampled some of the best tea that I have had in China so far and then a lot of us bought some of the most expensive tea that we have ever bought or probably will buy. If the whole thing was a sales pitch, like some of our classmates thought, then Dr. Tea is the best salesman around. Even if it was only a pitch I was able to get a few gifts for folks at home when I bought the pound of tea to bring home. It was a nice change of pace since the majority of our time in Shanghai has been focused on business visits.

After another traditional Chinese lunch we headed to Geely Motors, a Chinese car manufacturer most recently known for their purchase of Volvo. Geely primarily sells cars in Asia, Eastern Europe, and Africa. After looking around the showroom it was clear that their car models all resemble other successful car models. Their best seller is a dead ringer for the Toyota Camry. In their business presentation they presented several new models of car that they are planning to introduce over the next few years. I think their business strategy is not very strong, they are focusing on too much innovation instead of finding a gap in the market and using it to their advantage. In my opinion they need to focus on one or two models that are needed in the market and then mass produce those. It will be interesting to see how Geely proceeds now that they have purchased Volvo. There is already press around the differing management of the Chinese owner and German operator. It will be interesting to see how this situation progresses.

Our last stop was the Asian American Amity Association. Because we needed to make our train, it was a very quick stop. Due to the rushed nature of the visit I walked out not completely sure what the AAAA does. It was clear that everyone we met with was proud of the work that they do. From what we heard my assumption was that they aid Americans trying to do business in China and pair investors and businesses after they research the Chinese businesses. Unfortunately we didn't have much time for questions there to better understand their role. We were all excited to have the last of our business visits done. Personally, I am about ready to head home, it has been a great trip but I am exhausted and a little homesick at this point.

From there it was back to the train and back to Shanghai. A little tired of traditional Chinese food we ventured out for some pizza tonight. It wasn't bad, especially considering it is hard to get good pizza outside of NJ in the US. Siteseeing in Shanghai tomorrow and late flight to Beijing, then the long journey home.

Tuesday, June 7, 2011

Shanghai Business Visits Day 2

Tuesday was another full day of business visits in Shanghai. The more time I spend in this city, the more I like it. It is a beautiful, clean city, that is very modern and continuing to grow.

Our first visit this morning was 3M China where we heard from Wayne Xue, Director of Corporate Strategy and Communications. I was very surprised to learn at how diversified that 3M is overall as a company. I was aware of their consumer products division as well as their healthcare division but didn't realize how deep their portfolio was. It is also impressive how much the China division contributes to 3M's overall revenue and is one of 3M's most successful foreign subsidiaries. Based on what we heard I think 3M China is doing a lot right, they are investing in R&D, planning to increase the R&D headcount from 450 to 750 by 2015, they also have very low turnover of employees, so they are obviously a good place to work. The market average in China is 1/3. 3M China also targets up to 70% of supply regionally. I also think their strategy is sound, expecting that the industrial sector will be a major contributor to their short-term growth and that healthcare and the consumer business will be contributors to their long-term growth.

Similar to the Vietnamese, the Chinese business people that we have met with so far all seem very proud of their accomplishments and their businesses. I do think that the Chinese people are a little less warm than the Vietnamese people but everyone we have met with so far have been friendly and very professional.

We had another great lunch today. We were at another mall and found a place that we could get a salad. I was never so happy to have a salad in my entire life.

After lunch it was a stop at the US Consulate located in the office complex of the same mall. Quite different than our visit to the US Consulate in Vietnam, this was much more laid back from a procedural standpoint. We met with Tom Cooney from Public Affairs, Evan Felsing in Economics, and Ki Tin (sp?) in Commerce. One of the most striking things that we heard on this visit to me, was the many Chinas that exist in the country. Shanghai is not really a real reflection of the economy of China, it is one of the showcase cities in China. Tier 2 and 3 cities are markedly different. We will get the chance to see a Tier 2 city tomorrow when we head to Hangzhou.

The team also spoke a bit about US businesses operating in China. With IP issues still looming China may not be the best place where a company's competitive edge is their intellectual property. There are also 2 large issues for companies now, labor costs are increasing and finding good Chinese managers can be difficult. Starting to do business in China is not something that can be done via phone, it requires a presence to get started. The largest opportunity they see is in the services sector, with 80-90% of companies being successful. The message I heard is that there is still opportunity in China but it is not necessarily easy to start up in China. I think this is where Vietnam may begin to have an edge over China, their labor costs are still lower and they have a very young workforce.

The other topic that I found interesting was about education. China is the #1 source country for international students in the US. Although the higher education system in China is good, it is very prestigious to receive an American education. China is clearly benefiting from their students returning home with a quality education. Some of the folks that we have met with already were in fact educated in the US. Overall it was a very interesting and informative visit, it would have been nice to start our business visits off with this visit like we did in Vietnam. I think it would have set the stage well for our other business visits.

Our final visit of the day was the Langham Hotel in the Xintiandi area of the city. The Langham is a luxury hotel in the heart of the nicest areas of the city. We received a full tour of the hotel and it is quite impressive. They are catering to the business professional and providing luxuries to the business traveler. It was also interesting to find out that the area is owned by one investor and his brother. Having been there earlier in the week in the evening it is clearly a successful operation that they are planning to grow even further. The hotel treated us to a very luxurious buffet dinner which was a nice break from all of the traditional Chinese food we have been eating.

The future of Xintiandi

This is just the desserts!

We have another full day tomorrow, taking the bullet train to Hangzhou. It's hard to believe our trip is almost coming to an end. So far it has been an enlightening trip where we have met a wealth of interesting people. I expect to be continuing to learn from this experience for a long time to come.

Shanghai Business Visits Day 1

Monday was our first full day in Shanghai and our first day of business visits. I am curious to see the contrast with the visits we had in Vietnam.

Our first stop was Jones Lang LaSalle, a real estate developer focusing mainly on commercial real estate in Shanghai. This proved to be a very informative visit with a lot of information on not just commercial real estate but retail and the residential market in Shanghai. David Erickson, who presented to us, gave us an interesting overview of the real estate market in Shanghai. Just looking around from the bus on Sunday you could see from the amount of construction that real estate is likely booming in China.

Although his company doesn’t focus on residential real estate he did give us a very comprehensive overview of the residential market in Shanghai. One of the biggest concerns is if Shanghai will face a housing bubble such as what happened in the United States. After hearing the information presented to us I think China is much better positioned to avoid a housing bubble. The Chinese government tightly controls the housing market and the most recent restrictions will aid in avoiding a housing bubble. The government now requires 30% down on all housing purchases and 60% down on second homes. It was also interesting to hear that the majority of mortgages in China are 15-year fixed mortgages and in the rare instance 30-year fixed mortgages. In the US we had a number of a adjustable rate and interest-only mortgages as well as the number of homes that were financed 100%. China still may have some issues ahead of them with the number of homes that are being built but given the controls in place and the tight arm of the Chinese government I don’t think they will experience the housing bubble in the same way the US did.

The commercial and retail markets in Shanghai are booming as well. Just one look down Nanjing Road and you can see all of the development. One interesting statistic that David shared was that 50-70% of the government's revenue comes from the sale of land use rights. There are no upcoming expirations for about 30 years, so it will be interesting in the future to see how China handles this and if they are able to reduce their reliance on land rights sales.

Our next stop was lunch at the World Financial Center, also known as the Bottle Opener building. We had a great lunch at a Dim Sum restaurant, which turned out to be one of our favorite meals in China. With all of the hustle and bustle in China I was surprised at how slow the service is in restaurants. I expect that when I travel to Europe but was surprised by it in China. That is probably why most people take 1.5 hour lunches!

Our afternoon business visit was the one I was looking most forward to on the trip, ShangPharma, a Contract Research Organization. I was expecting that we would be hearing more about outsourcing of clinical trials to China, which is the topic of my research paper for this class. Although that isn’t ShangPharma’s focus, they have an impressive operation for discovery of new molecules. With pharmaceutical companies tightening their belts and cutting Research and Development costs this is a great business model to help pharmaceutical companies focus their efforts. The company is fully staffed with scientists and they are comparable to a small US biotech company. I think this is a great business model as pharma companies cannot succeed without a fruitful pipeline but it takes many tries to find the next Lipitor or Viagra. With R&D taking up significant costs for pharma companies this model provides them a way to still discover molecules but have an outsourced company continue multiple workstreams with reduced costs to the company. I wish we could have toured the facility and seen some of the laboratories but I'm guessing due to intellectual property rights that would be prohibited. I'm not sure that this model exists in the US but I'm planning to do some research to find out. ShangPharma was clearly an impressive and successful operation in Shanghai.

Following a long day of visits we all went to the Shanghai Acrobatic Show. It was very much like a Cirque du Soleil show, a great performance. Afterwards some of headed down to the Bund to get a view of Pudong at night. What an impressive sight, especially at night.

That was followed by one of the best and most cost effective things I did on this trip, a massage. A very relaxing way to end a busy day. More business visits on Tuesday.

Tuesday, May 31, 2011

Welcome to Shanghai

Sunday's 4 hour flight from Ho Chi Minh City was a breeze compared to the 15 hours to get to Hong Kong earlier in the week. When we got off the plane the immediate difference between China and Vietnam was the weather, no more humidity.

The city was an about an hour drive from the airport. It's hard to believe seeing the city for the first time that China is still an emerging nation. It was much like driving into NYC, lots of high rises, lots of highways, and lots of traffic.

On the way to the hotel we stopped at the Pudong area for some photos. There are some amazing new buildings in Shanghai including the TV Tower and the World Financial Center, otherwise known as the Bottle Opener.

After getting settled at the hotel we took a short walk down Nanjing Road, the expensive shopping area of Shanghai. It was all high end brands. We stopped in one of the malls for a quick bite and were surprised by how empty it was. It didn't seem like the residents of Shanghai actually shop there. We actually found out during a visit today to the US Consulate that all of the very high end retail companies are mainly here for show not to make any money.

We had our first group dinner, a traditional family style Chinese meal. To me it didn't seem that much different than American style Chinese food. As much as I like Asian food I think I will be ready for good old American food by the end of the week.

A few of us ventured out to the Xintiandi area or the French concession after dinner. This is a shopping, dining, and bar area in the city. Our guide Candy had warned us not to take red cabs but we found out the hard way why red cabs are taboo. Cab drivers in Shanghai don't speak any English so you need to give them a card with the Chinese characters of where you want to go. We realized very quickly that he didn't know where to go even though we were going to a popular part of the city. He had to stop and ask directions. We got there eventually but we won't be taking any more red cabs.

So far I really like Shanghai, in a different way than I liked Vietnam. It's really hard to compare Vietnam and China since they are completely different cities in different stages of development. Although I liked the Vietnamese people I never felt completely safe in Ho Chi Minh City, in Shanghai I feel like I am in New York. You need to be careful but the streets aren't overwhelmed with people and runaway motorbikes. It's a very impressive city and it will be interesting to see how it compares to Beijing later in the week.

Our business visits start on Monday.