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China Trip with Peter, Bruce, Craig and Jonathan - March 2008

The sky is overcast and grey. Looks like rain. It must be Spring in China. During my 20 day visit this time, I never saw the sun. The locals seemed to be seeing the sun, but a bright spot in the grey haze that one can stare directly at is not what I would define as the sun. The unprecedented growth of the economy as certainly been at the expense of the quality of life in China. Trash is burned along the side of the road. Coal or wood is the main fuel. Emissions controls are not part of any older vehicles or trucks. It is not that the new industry is the problem, it is that the old ways cannot be stretched and expanded to accommodate the intense density of the population which as resulted from the new industry.

I have known the Wu family since 2001. Then they lived in an aging apartment building so typical throughout China. The apartment was on the fourth floor, the ideal location according to Harriet, the English major turned exporter. "The roof leaks on the top floors and the lower floors are damp. The middle floors are best." None of the hundreds of apartment in the closely packed apartment buildings have any parking. Sidewalks connect the buildings to the busy overcrowded streets. Bicycle parking was available. The drab shabby concrete building was unbelievably ugly. The dark filthy stairs reminded me of a condemned tenement building in New York City. But when the door to their apartment was opened the change was shocking. The apartment could almost be judged opulent. From the gleaming tile kitchen to the fully modern bath, it would be a desirable apartment in any upscale neighborhood in the US. Harriet rode her bicycle to work, and carried groceries up those steps every day. No wonder you do not see fat people in China!

On this trip in March of 2008, Harriet picked us up at the airport. She now has a brand new bright red Audi, but is afraid to drive it in the crazy traffic of Shanghai, the largest city in China. She has purchased a new 3 br, 2 bath condo, not much different than her old one but in a fine new building, with a garage, and parking in a new riverfront development in Huzhou. We drive from the airport on new divided highways with hefty tolls and get into town now sporting traffic lights at most of the intersections. The driving is still chaotic with trucks, buses, scooters, bicycles and pedestrians casually criss-crossing the road wherever they are inclined with absolutely no regard to oncoming traffic. They simply cross slowly, and the maze of traffic flows around them.

The country side showed less change. Yes, the ground was being cleared here and there for new factories and lots of new buildings could be seen, but our factory was unchanged with the exception of one startling new development. As we pulled up the factory manager came out to greet as usuall but this time not alone. He was followed by three 18 year old girls, complete with all the latest fashion. They all spoke just a bit of English and some Japanese. They shared an office next door to the factory owner, with three small desks, each with their own PC. They were local girls (as in local from this province, Huzhou about 1 hour away). They lived on site and had all meals provided from the factory cook who cooked for all the employees. They sometimes went home for the weekends. They spent there days, emailing possible customers, providing quotes and handling the paperwork required for export. This was a new concept. Always these factories were dependant a official export companies who went to shows, found customers and placed there orders with which ever factory needed the work and would provide the best pricing. As the factory has always been run by the manager, and the bookkeeping done by his wife, I had nobody I could communicate with directly, so always needed the broker in between. Now that barrier was gone. What would be the impact? Slower deliveries when "direct" customers get priority? Poorer quality without the independent inspection of the broker? Or would we have better integration and communication resulting from closer ties?

Our next visit was a new factory. The large buildings were new and spacious. Still just concrete buildings but with lighting, outlets, doors and windows. The factory manager's office was immense, with big leather couches. I saw a conference room next door with a boardroom like table and 2 dozen chairs, quite unused. Additional empty rooms could be offices for the future. I also noticed the nice car in the parking lot. Here was every sign of success, but when we toured the factory, most buildings were idle. He was making some wood craft items, unpainted shapes like hearts and little boxes. He was also exporting some green canes to Japan. There was certainly not enough money in any of that work to begin to explain the luxuries.

The story was interesting. It seems the old factory was situated under the water of the new reservoir being built. The government provided this new factory, and what must have been a generous budget as well. It all looked good, but along with the free new place came a requirement to produce X RMB in sales. He was not even half way to the goal. What he needed was sales. An interesting opportunity.

Train travel in China can be quite comfortable or can be quite unpredictable. Very comfortable "soft bed" sleeper cars are provided at a very reasonable rate, with two bunk beds per cabin. The trains are quite and smooth running, and a great dining car is included. The problem with trains is the ticketing. There are many options if you are ticketing more than 2 weeks in advance, but we tend to be working out the trip as we go. You can buy tickets near your departure terminal at the station, your hotel or small agents. But it is common to find the train "full". In reality the train may be full or may be empty, and the availability of tickets seems to have nothing to do with the room on the train. Twice we found no "soft beds" available and purchased "hard beds" instead which are 6 beds to an open cabin and easily upgrade on the train. In one case the whole soft bed sleeper car was empty! But "no tickets" were available. So far, so good. The problem comes with connections. You cannot buy tickets for a second leg. You must wait until to get there, then buy the tickets for the next connection. After an overnight train from Hangzhou to LuShan. We arrived at this famous spot of scenic mountains first thing in the morning. Or so our guide book says. There is a joke in China about the famous mountains of LuShan. It seems fog is the dominant weather pattern and the joke questions if there are really mountains in LuShan, as few have seen them. The fog was so thick we could not see across the road. The train station was small and a single line snaked out of the terminal at the only ticket window. We got in line to get our connecting tickets, from LuShan to Shantou. We had the request written out in Chinese. We finally arrive at the window and confidently slipped the note through the slot under the window. The lady read it, consulted her computer and slid it back under the window with a shake of her head. We slipped it back and tried again. A vigorous shake and the word "no". We tried in vain to reason with her in English but to no avail. I turned back to the impatient line of 20 people behind us in line and asked if anyone could speak English. No response.

Peter looked a bit concerned to say the least. I reminded him that without a little adventure the trip would be boring. He was not amused. We positioned ourselves in the traffic stream and started asking young people walking by if they spoke English. In about 1 minute we had a small crowd around us, as it so typical in China. All problems are solved with consensus of a crowd. We had an English speaking student translating our problem for the crowd who all had something to say about it, none of which he translated for us. We went back in to the ticket booth to the great interest off all. The problem was that the train was either full or was not running on a Sunday, we were not sure which. The only thing we were sure about was that sightseeing in the fog was out, and the sooner we got on our way the better. We were to meet Bruce in Shantou the next morning and if we did not get the train that night, we would not make it.

We bought tickets to Nanchang, the closest big city. It was assumed we would be able to get tickets there. For all the usual reasons we could not find that out from LuShan. We packed into a "hard seats" local that crept along for the next few hours to Nanchang along with chickens in boxes, families and students going back to large Universities after their weekend at home. Our student translator accompanied us. We also picked up 2 other students who chatted with Peter the whole trip.

Another long wait in the ticket line and we find all trains are booked to Shantou. It is the place to be and all trains are full. It looked like there was no time to waste. Our student consulted with someone back at school and told us of a flight to Shantou, that we could just make, at a reasonable cost. We took a taxi that knew all the shortcuts to get to the airport without going on the toll road. We crossed under and over the toll road, on very bad roads at high speeds and even traveled on part of the toll roads the wrong direction to avoid the toll booths. Oh boy what fun.

At the ticket counter, our poor student could find nothing of the expected flight. He was out of his depth as I suspect he had never been to the airport before. We made the rounds of a dozen little airline booths, each with a few possible flights and found no flights to Shantou. Any local would have given up but we pushed on and finally organized a flight with a connection. This seemed to be an unusual issue for we had to go over the idea several times and were charge for each leg the same as if they were completely separate flights. Ouch. But by evening we had landed in Shantou. Our free sightseeing day was spent entirely in travel. But now we had a real problem.

Seems that we did not know the name of the hotel we were to meet Bruce and Jonathan. The only place we had it was in an email, and there was absolutely noplace we could find internet access at the airport. After bumbling around for ten minutes we decided to take a cab to the nearest hotel, and check our email there. Oh, my. "What Hotel?" is known by all taxi drivers. "The closest hotel" is known by none. Many experts were consulted up and down the line of cabs but nobody know where this "closest" hotel was to be found. Finally an officer approached and asked how many stars. Ah, the standard hotel rating so commonly used in China. I hold up 3 fingers, for a 3 star hotel. He rattles something to our driver and we are off. Oh my, I think. Why did I say three. I should have said 5 star. At a fine hotel we would be able to check the internet easily and get help. But for some reason I said 3. Then Peter says that maybe he will take us to our hotel directly. I have been to Shantou before and expect we will be at the same hotel as last time but I do not remember it at all. I watch during our 20 minute ride and it seems we are moving downtown in the right direction. We arrive at a hotel, go to the business center and get online. I check the email and get the hotel name. What do you know, this is our hotel! That is pretty improbable in a city of millions. Wow, what a surprising end to a tough day.

Last meal on the street for Peter before leaving Shantou.

Bruce, Craig and Jonathan arrive during the night and we all go out to visit granite production plants the next day. The following day, Peter returns to Hong Kong and California, Bruce and Craig followup with the search for granite in Xiamen and Jonathan and I travel north to a small town in Fujian Province between Xiamen and Fuzhou called Xianyou. We meet Mr. Tan and his son Hanry and his fience and travel together. It is a rural area (for China) in a river valley between the mountain ridges that cover the coast. The air is cleaner than I have seen in China. It is the town that Mr. Tan was born and raised in and now he was returning.

The next morning he told me his story over breakfast. As a boy, there was little to do in the town so he build his mother a house. Not just another house but an amazing house, with brick, granite and tile. He and 15 friends worked for 3 years to build this amazing house 30 room house, unlike any in town. Following that he ran away and managed to cross the border and get into Hong Kong, with about 30 cents in his pocket. He worked as a laborer, than a factory assembly worker, then line supervisor, then manager. Then one day he said to his boss, that he would like to supply the parts to his boss. He would give them 100% inspection and would charge just 4% more than cost. He would never compete with his boss by making the products his boss made and would always disclose his cost and source for parts. His boss agreed. If first overseas parts were from NEC so he named his company UEC. Today his business includes about 60% of the traffic hazard flasher market in Hong Kong, and a significant production of OEM speakers for companies such as Bose, which includes about 20 containers per month.

He has now come back to his town and is building a new office build and factory. The local officials were all once his schoolmates and he is now the local hero. The facility is fantastic. His new office will be larger than MSBs whole space. He plans to landscape with bamboo! Once again it is a dramatic move to build a new factory in a small town, rather than in the big cities with all the other factories. But he feels his hometown would benefit from local employment so he is giving back.

While living in Hong Kong he has supported the community in other ways. We visited a local park with a famous 2000 year old tree and saw some new pavilions set up by his mother. At the local school we saw the new addition and teacher offices donated in memory of his father. It was a great site. It was evening and dark outside but class room after class room where full to capacity, with kids learning English. Eager and attentive, one can only imagine the impact on the world of millions of bright, motivated English speaking kids as the reach the University level and the work force.

Outdoor Chalk board in School Yard

Night Classes in English

We learned a bit about the local government, the party and the way things work. In many ways the system sounded more like the system in ancient China than any new reformed communist system. All power is centralized as it has always been. All taxes flow up and benefits flow down. Taxes are collected on payroll and sales. Income and real estate taxes are selective, primarily on the wealthy. Local officials are appointed level by level from the state to the province to the city. The local official must be subject to his superior but his success in remaining for being promoted is very much measured by his ability to do his job and secure a good reputation among the local people. Officials are to have a fatherly role, watching out for and caring for those under there control. Abusive officials do not last long, so for the most part, the average people seem much more satisfied and less cynical with their officials than most Americans are with their elected PoliticianÕs.

We had tea with one official, and witnessed an amazing ritual of tea preparation with tiny cups, multiple rinses, temperature control and a very expensive tea. It tasted very good, but perhaps not US$1000 per kiloÕs worth.

I cannot finish without discussing the new cars in China. It is clear that when in comes to building a brand image, Mercedes has one the battle. Everyone I asked what the best car was to have said "Benz". That was the car. So I asked Mr Tan why he needed the top of the line Benz to drive around the dirty streets of his town and he explained it was all a matter of how the system worked. When you approached a government official and asked for land to build a factory, the official would decide if you would be a good choice for the project based on your business success. This would be invariably judged by the car you drive. It was that simple. In all your dealing with vendors, and customers, all want to deal with the new up and coming rich, and in a somewhat simple way, it is measured by your dress, and gadgets. It is an attitude more expected in a colonial era but considering the dramatic changes in China it is understandable. They have no idea about the California "stealth" wealthy.

The high ranking government men do not need to drive Benz, as they are all ranked and that rank is displayed on the license plate. We had tea with number 0003, and that was enough to generate respect. Respect seems to be a primary wish among all, and wealth just a means to respect. Although a vast and densely populated country, most have never left the local community and thus your happiness depends solely on your performance in your family and community. For the most part, families and morals are strong, and drugs and crime are not found anywhere but in areas with large tourist and transient populations. Once I asked why a nice new scooter was not locked up. The answer was; "Who would take it? Everyone here is known and all know who's scooter that is. The thief would be instantly identified."

After a brief stop in Hong Kong we visited Summit Metals in their new factory in HuMan City. The new factory was very nice and well managed. From their we traveled by train well into China's heartland, ending up in Yueyang in Hunan Province. It is a regional vaction spot and were were somewhat of a spectical, in this area infrequently visited by non-Chinese. We saw some sights, including an island in the very large and polluted Dongting Lake which appears to be the native home of Goddess Tear bamboo, which is used to make our black bench and is cultivated in Europe but not found in the US. We then visited the local university and found a very attractive campus. The dorms were very crowded Ð 8 girls per bedroom, with 2 bedrooms sharing a room with 16 desks and one bathroom without hot water. That had to be carried from the next building. None of the classrooms are heated and our guide suffered frostbite last winter in her toes during a major exam as she could not take the time to stomp around and stay warm. The cafeteria food was pretty good, we thought, until we found that it was exactly the same, lunch and dinner every single day of the year. We had a wonderful visit and enjoyed hearing about her life growing up far in the country and about her transition to college life and plans for the future.

Touring in Yueyang - Lunch at the University

The following day we spent in Wuhan, in Hubei Province, a large city near the famous 3 gourges dam project. We visited an excellent museum full of amazing artifacts uncovered in the area from tombs that were thousands of years old. Very much like a visit to Egypt. A visit to the local art gallery was a disappointment.

Another overnight train, with a great dinner in the dining car and we arrived in Hangzhou in Zhejiang Province. We met up with Bruce and Craig and toured the famous West Lake area. Most interesting to me was a visit to the China Academy of the Arts, the number one art University in China. Although they claim to have a program for foreign students it was very poorly presented, with a simple brochure outlineing the costs and majors being the only thing offered. I had to demand some kind of ad-hoc tour and really made little progress until I met a student from Croatia in the hall who stopped to help. She was in the masters program in her 3rd year and gave me a great picture of how it all works for a English speaker. She felt quite isolated and said that learning Chinese was hard as the program was poorly planned. Better to learn at home before arriving. She was given a free hand in defining her program and given great praise for anything she did. She wrote her papers in English and wondered if anyone read them. She did not have any good friends among the Chinese students, who she said were friendly only when they could practice speaking English. Instead she was housed in nice apartments in the foreign student housing area and she spent most of her time with the other foreign students. She said that most of the American students lived off campus. Typical.

Back to Huzhou were we started for dinner with Harriet and off to Shanghia for a trade show and return home. I visited 8 providences, and covered about 2700 miles traveling by car, bus, train, ferry and plane.