The China Vortex
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Why Western Employers Are More Attractive To Many Chinese (Jun 25)
China is a nation of entrepreneurs, and , has 85 million businesses compared to the US’s 25 million. Considering that China has about four times the population of the US, the proportion is about right. These numbers reveal that China is in fact, not a socialist nation, but is instead one which has a very capitalist heart. Or as the Chinese government would say, has “market characteristics”. There are many Chinese university graduates who when choosing a job, prefer to go to a western company over a Chinese company. For many, American companies are the most preferred. Why is this? For many of them, it is because that they will get good training, learn management, and work within large organizations about how to get a job done. They get a chance to work with people from many different cultures and countries. These are significant advantages which most Chinese companies, which have not yet gone global, are not yet able to offer. But I believe that there is another perhaps more importan...


How Chinese Society Is Changing (Jun 21)
The west never seem to tire of telling the Chinese, especially Chinese government, about how China should become a more open society, and the Chinese never tire of telling the west to shut up and stop interfering in China’s internal affairs. The great irony is that for the most part, both sides agree on one thing: that China should become more open. It’s just that many westerners think that they should set a timetable which the Chinese should march to, and the Chinese believe that they should make the changes according to their own internal considerations. I believe that by publicly criticizing the Chinese government and policy, many well-intentioned western critics (and some not so well-intentioned), actually slow down the pace of China’s opening up because if the Chinese government and society changed more quickly, they would be seen as bowing to western pressure. That is something no Chinese government can afford to seen doing. This is the core reason why I have so little time ...


Why China Is Really Annoyed At US Policies (Jun 19)
This is pretty self-explanatory. Investors who bought notes due February 2018 on March 17, just after the Fed helped arrange the bailout of Bear Stearns Cos., have lost 6.2 percent, according to Bloomberg data. The 10-year note, at 4.25 percent, yields no more than the inflation rate, leaving investors with real returns near zero. Consumer prices have exceeded 10-year yields by an average of 36 basis points since December, Bloomberg data show. In 1980, inflation reached a 33-year high of 14.8 percent and yields averaged 11.4 percent. `Out of the Bottle’ Yields on 10-year notes had dropped to an almost five-year low of 3.28 percent on March 17, after the Fed cut the discount rate at an emergency weekend meeting and backed JPMorgan Chase & Co.’s deal to buy Bear Stearns Cos. Rates on three-month bills plunged to 0.39 percent, the lowest since the 1950s, the same day as investors sought the safety of the shortest maturity government debt. Consumer prices advanced 4.2 percent in May fr...


Interfering In Another Country’s Internal Affairs (Jun 19)
“Interfering in another country’s internal affairs” is a routine mantra often used by Chinese government spokespersons, and is used most often when pointed at the US and US critics, especially with regard to human rights policies. On the surface, this makes a lot of sense, especially with regards to generally ignorant US politicians, movie stars and others, who would have a hard time finding places like Tibet and Darfur on a map, but are moved by some of the images they see on television. For them, China and Chinese policies are a very convenient whipping boy, even though they have very little context and understanding of the real underlying issues. This naturally puts the Chinese government on the defensive and more recently, some Chinese have become angry at the overseas criticism. So who’s right and who’s wrong? Those who argue against interfering in another country’s internal affairs, or those who say it’s OK to do so? The fact is that if a country is big and has a strong econom...


The PR Problem for Chinese Online Public Relations Firms (Jun 17)
Several days ago, Sam Flemming of CIC, a Shanghai-based online reputation management company pointed me to a news article on Business Week called . The article specifically highlighted a company called Daqi.com (in Chinese the name means “Big Flag” which has a certain nationalistic appeal), and cited a case in which it helped Toyota satisfy a customer who had not received his car after three months. According to the company’s CEO, her company, an Internet online reputation management company, helps its customers, mostly western multinationals, to monitor their online reputations and help put out fires with users in China. Out of curiosity, I then entered Daqi.com into my browser address bar so that I could visit the site and learn more about the company and what they do. What I found, and what I did not find, were very interesting. First of all, I thought I was going to find an online reputation management company, or public relations company, or whatever buzzwords they are using ...


Getting The Dragon Right (Jun 12)
On June 11, I attended an event in Beijing where Jack Perkowski, author of the book Managing the Dragon talked about his experiences doing business in China and on the Chinese economy. He also keeps where he talks about China-related topics. In March, I had read the book and wrote an online review which you can read . During the dinner talk, Mr. Perkowski talked in greater depth about some of the issues he talked about in the book. Most of the audience of 20+ people were people who had considerable experience living and working in China. He talked about how he saw China as having two different economies, which he calls the “local foreign economy” and the “local local economy”. He sees the local foreign economy as being made up of 400M people who have average annual income of US7500. The other 900M people have an annual average income of US2500. Right now, these are almost separate economies in the same country. The existence of the local local economy, which is very cost- and pric...


A Hard Look At Microsoft’s Performance (Jun 11)
In a final closeout post on his blog, MSFTExtremeMakeover takes a at MSFT’s performance over the past eight years. The picture which emerges is not pretty, but it’s true. Technorati Tags: microsoft, steveballmer, technology


Apple Closes The Loop On the Competition (Jun 11)

Feature Comparison Chart
  Apple Microsoft Blackberry Nokia Adobe Rich Internet Applications Dashboard and iPhone Apps Silverlight 2.0 None None Flex/Media Player/Flash Player Push-sync to Mobile MobileMe/Microsoft Exchange (iPhone only) ActiveSync/Microsoft Exchange (Windows only) For email For email only None Push-sync to Computer (Corporate) Entourage (Mac only) Microsoft Exchange None None None Push-sync to Computer (Consumer) MobileMe (Mac and Windows None None None None Gaming None xBox 360 None nGage II None Television Apple TV xBox 360 (?) None None Media Player (?)
Just as with a master go player, whose moves seemingly look random in the beginning, Apple’s moves in the mobile and desktop space are beginning to come together. While the iPhone3G was expected, the real aggressive play came with MobileMe, Apple’s completely revamped version of it’s .Mac subscription service. With Apple’s announcement of the new iPhone3G and MobileMe web-based push...


Poverty Numbers As A Chinese Social Stability Indicator (Jun 9)
Seeking Alpha has an interesting article . The article comes with two graphs, one of which is above. This shows that there has been a gradual fall in numbers of poor since 1981, but there was a bump in the years from about 1988 to 1994, when the numbers of poor stubbornly resisted to fall. This was a time of high inflation in China. Do I need to tell you what happened in China in 1989? This graph gives a rough indication that as long as the Chinese government is able to show a descending line that poverty numbers are going down in absolute terms, then the government’s position is safe. If inflation should pick up and the number of poor goes up, then they have something to worry about. So far, developments on the economic front have been going well in China, with the noted exception of high inflation in China, much of which is due to higher commodity costs (food and energy costs) and capital inflows. Much of the capital inflow into China is due to investors who want to get out of ...


Honey, You’re Looking Old (Jun 7)
In 72 hours, more than 600,000 persons in China, and 6-7M persons worldwide, are going to turn to that little something dearest to them and say those dreaded words, “Honey, you’re looking old”. I’m not talking about their spouse, I’m talking about something they normally spend far more time with: their iPhones. Within 72 hours in San Francisco, Steve Jobs will take center stage at the Apple Worldwide Developers Conference (WWDC) to announce the second generation of the iPhone, which many refer to as the JesusPhone. We already know that the new phone will include . Hmmmm…. Does that mean we can call the second generation of the iPhone the Second Coming of the JesusPhone? For China, the big question is whether the new revs of the iPhone will include the Chinese government backed and developed TD-SCDMA technology, which is the local version of the 3G standard, and has now been handed over to China Mobile for care. China Unicom and China Telecom will support competing 3G standards whic...