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Archive for the 'Chinese Gov.' Category

3 Days of National Mourning

China blocked TV

 

Yesterday, today and tomorrow are 3 national days of mourning. It’s all a little bit weird. We’ve never really experienced national days of mourning before that I can recall. All the ‘entertainment’ channels on the TV (Discovery, National Geographic + movie channels) have been blocked as part of the Mourning Days.

Yesterday at 2:28pm there was 2 mins silence in the office buildings. At Andrew’s work everyone stood in silence, and outside the apartment all the cars stopped where they were and tooted their horns for that time. I hadn’t received the memo about it all, so looked out the window at the noise to see the traffic on Shennan Dong Road completely unmoving. I thought it might have been caused by an accident, but all cars had stopped. It was like seeing a moment in time captured in front of your eyes.

The above photo is of the TV screen on a blocked channel. I’ve written it out below:

Dear subscribers, According to an announcement of the State Council of People’s Republic of China, May 19 to May 21, 2008 are national mourning days. In order to express our heartfelt condolences for the victims of the disastrous earthquake in Wenchuan, Sichuan Province, we will suspend the relay of overseas channels with limited landing rights that contain entertainment programmes during the above period. Thank you for your understanding and cooperation. 2008 /5/ 19


									

Don’t ask, just do

Political Sign Shenzhen

When was the last time you saw a political slogan splashed across a billboard? Just another component of the intriguing Chinese psyche.

China low-ball pricing

I received a most interesting email from a friend recently, containing a link to a Jim Pinto article about how China plays the capitalist game. Whilst none of this is old hat it was quite succinctly put, and therefore worthy of a mention. Below is the article (my emphasis added) but you can view the original here. There’s also some useful links at the end of the article.

China low-ball pricing

In the early 1990s, China was merely a low cost place to make labor-intensive products. Now the country with the world’s largest population has become the most powerful force in manufacturing. Prices for Chinese manufactured goods are typically half of comparable U.S. and European products, which gives China a strong competitive advantage. But here’s something most people don’t realize - it’s not low-cost labor - it’s low-ball pricing. China simply accepts much lower profit margins.

U.S. businesses develop products with 50-60% gross profit margins and 10-15% net profit. Developing countries (other than China) look for 30-35% gross-profit, or 5-10% net-profit. China accepts gross-profit margins of only 5-7%, with 0-2% net-profit. Therefore, even with comparable manufacturing costs, Chinese products are the cheapest.

Here’s a simple example to illustrate the point: Let’s say a product costs $40 to manufacture. In the US the target selling price will be $80; in other countries, typically $60.

The Chinese would sell that product for just $45, maybe even $ 40 (zero margin). This astounds most outside observers-how can a profit making enterprise survive (capital and cash flow) with no profit?

The answer: In China, short- and medium-term operating deficits are acceptable since the government manipulates and controls capital. Chinese planners recognize the demand for short-term profit as the Achilles’ heel of Capitalism. Their own primary strategic objective is long-term global market share. The tactics: a/ High volume; b/ Fast response; c/ Immediate local employment; d/ High investment in automation and quality to maintain price leadership.

For America, the remedies require significant attitude shifts. Our short-term financial mind-set must change. Business needs to realize continual quarter-to-quarter increases in revenue and profits cannot continue on and on with work that is done elsewhere in the world.

It must be recognized that manufacturing and job creation are not just political or business manipulations, but the building blocks of society. To be competitive in global markets, it’s important to keep investing in jobs, to upgrade factories. Entrepreneurship and talent must be encouraged and stimulated to thrive in the manufacturing sector.

Deja Vu

Yesterday (Sunday) we took a bus ride for about an hour and there was a 40-ish year old man on the bus. Nothing unusual about that, nearly half the people in Shenzhen are male ) .

A few hours later we got back on the same bus for the return journey and, lo and behold, this same guy was on the same bus, boarding with us at the same stop. Interestingly, our alighting and boarding bus stops were different at our destination, but within walking distance of each other.

This morning, after passing through the metro subway gates, I passed the same man walking in the opposite direction!

Now the controversial ‘cigarette lighter on a stick’ will be in Shenzhen in 3 days time (May 8th). Coincidence? You be the judge.

A blockage

It’s interesting to note that with the recent turmoil in that “peacefully liberated” province in China’s West the authorities have now blocked access to YouTube in China. It will be interesting to see how long this ban stays in place. It would be also interesting to know if they’ve approached YouTube asking them to remove the content that shows the activities taking place.

Beijing initiation

Beijing Skyline

Righto, first things first. Beijing is a place where the pollution is horrendous. Unreal. No words can describe how bad the air pollution is here. It's the first thing that hits you after arriving at the airport. Beijing makes the air in Shenzhen seem like a tropical island resort out in the Pacific somewhere.

It actually requires some mental effort to consider that the level of pollution has been allowed to reach the level that it has. It's mind blowing. It represents a complete disregard for the environment and the future of our planet. None of us are innocent in this regard either, as others have discussed.  

I have no idea what they're going to do for the Olympic games but you can guarantee that there will be some kind of heavy-handed and multi-pronged approach to improve the air quality come August 2008.

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