By syw on May 15, 2005
Why China? Why not somewhere else?
I tried answering these questions recently during an executive presentation. This is the summary.
The plane lands. Except for these Chinese signs, it is no different than San Francisco International airport. The trip to the hotel is the standard, boring, and uneventful (and frequently jammed) high-way traffic. The hotel clerks greet you in English and you notice something very odd -- they don't tip for services here. "Hmm...," you think. "I think it is going to be OK here." Few minutes after getting your email done, surfing your standard web sites. You remembered, "I am actually in China. Let's see what kinds of real Chinese foods are here."
I visited ShengYang, DaLian, ShangHai recently. The exercise is to find anything that's negatively different from a similar trip in US (say, going to San Diego, Phoenix, and Los Angeles). In fact, the 3-hour high-way ride from ShengYang to DaLian can only be described as boring in the way it is so uneventful. Our escort kept on telling the driver not to drive too fast (beyond 140 km/hour. You compute.).
Infra-structure is like clean under-wear. You only notice it when something's wrong. In Beijing, you quickly forget about any infra-structural issues. They simply work.
The champion for the 2005 ACM-ICPC (Associate of Computing Machinery, International Computer Programming Contest) is Shanghai's Jiao Tong University. Fudan University was the 6th place, Peking University 11th, and TsingHua University 13th. MIT and Indian Institute of Technology shared the 29th place.
Walk around any campus that is engineering intensive and make mental notes on the ethic background of the population. What do you observe?
Human races are not fundamentally different, at least statistically speaking. People in any part of the world are as smart as the other part. The difference in productivities comes from education, work-ethic, and the management.
There are daily, non-stop flights from San Francisco to Beijing. The flight takes about 12 hours. It is the strangest coming back. You will depart 2pm from Beijing airport and arrive 9am San Francicso -- the same day.
The time difference is an advantage. A typical traveller wakes up very early in Beijing. That happens to be late afternoon in California -- the prime time for email traffic and meetings. Many people will not even realize that you are not in the country. You are one day ahead of California. This means all those email you fired off on Monday get to them Sunday night. Your California colleaques find your messages waiting for them 1st thing Monday. By the time they have digested and ready to talk, you just woke up and are ready.
Beijing is a very safe city. There is little worry about getting mugged, stolen, or robbed. The taxi are cheap and efficient. The foods are (generally) clean. Tea is the most poplar drink and usually free -- a readily avaiable safe liquid source that is not acoholic. Tap water is safe and bottle water is available everywhere.
Cell-phone, based on GSM, has excellent coverage. A local cell-phone account costs 50 RMB a month (less than US$6) and and 60 cents RMB a minute to talk (that's 6 cents US$ a minute). ATMs accept your US credit cards and ATM cards.
It is only the most ancient civilizaiton in the world.
OK, let's not argue whether China is the most ancient civilization in the world. But it is clearly one of the oldest that is still active. Everywhere in the city, the capital of China for only few thousand years, you see history. Real history that can be made into Indiana Jones movies. Citizens demolish structures that are merely few hundred years to make room for new developments. "If we try to preserve those younger artifacts. There will be no place to live."
Of course you have heard about the Great Wall, the only man-made structure visible from the moon.
The history is alive here. People tell you stories willingly: this is where the emperor did that and this restaurant has been serving since a hundred years ago. The name of this alley comes with a sad story. You will be sitting in a restaurant that was once the private chamber of the empress. You walk in the history and chat with a fellow citizen who happens to be a descendant from the Qing royalty.
Decisive, MNC-friendly (Multi-National Corporations) government
We can argue on the merits of various forms of government. We can debate the freedom of speech. We cannot disagree on the decisiveness of this government. When the central government decides, the country follows. They are bold, they are clear in strategy, and they move fast.
IT industry is their target. They intend to be among the strongest in this industry and they know us MNCs can help. They want our helps. They have learned from other countries. They know somethings cannot be hurried - developing IP and talents among them. They need partners, that's us, the MNCs, before they grow up.
Do you want to help? Do we?
Immense market, explosive growth
Newsweek said it well. Most publications find it easy to deliver stunning statistics about China. If you have not seen them, a refresher is a simple Google away. GDP growth in China has been among the fastest in the world -- 10% annually. If you dig deeper, IT industry contributed unproportionally to this growth. 25% growth has been sustained and predicted. In fact, most pundits forecast the "2nd golden era" coming.
Is there a better opportunity? Is there a bigger market that is at a more strategic inflection point?
The country is making sweeping decisions for the next 50 years. It knows its population and potential. The government intends to exploit its power fully. What role does my company want to play here? Remember, the current "world-wide" market share means very little here. They have a quarter of the world population. The market share in China will change whatever existing market share landscape. They know that.
They are also open to options. How would this company help to thrust the country into its desire future state the fastest? They want nothing but 1st-class and leadership position. They are determined to be there. If you can help, you are a welcome partner. Otherwise, get out of the way.