Journal on the 2006 International Study Seminar
Marissa Nolen, Class of 2006

Beijing - Monday, March 13, 2006
After 24+ hours of being awake, and a long trip with flights from Seattle to Tokyo and then Tokyo to Beijing, jet lag got the best of me and I was awake with the sun after only 4.5 hours of sleep. Hard to believe that I was just in class all day yesterday—or two days ago, since we’re now on the other side of the international dateline.

Today was a fun day—sightseeing, to help us get our bearings and show us a little of Beijing and the surrounding region. We visited the Forbidden City in the morning, working around all of the construction for the 2008 Olympics to see beautiful buildings and architectural and decorative details from the eras of emperors who lived there. In the afternoon, we hiked along the Great Wall, which was truly amazing— I think we were all a bit awed by the fact that we were really in China, finally, standing on the Great Wall.

Beijing’s an interesting city— very grimy and polluted, to be sure—but it’s a contrast in old dilapidated dwellings and ancient imperial structures and modern high-rises and complexes that are indicative of a country and economy in transition. We don’t have much time here to get the lay of the land, but I’m hoping that the company visits during the next few days shed some light on the intricacies of at least one aspect of life in China right now.

Beijing - Tuesday, March 14, 2006
This morning we had two speakers— an American ex-pat representing the U.S. – China Business Council, followed by the Director General of the China Council for the Promotion of International Trade. The ex-pat spoke of the obstacles and opportunities facing American companies that want to do business in China, as well as her own experiences living in Beijing. Some of the best take-aways from her talk were “The six D’s of doing business in China: due diligence, due diligence, due diligence” and what she called the “New Jersey rule”: If you wouldn’t do it in New Jersey, don’t do it in China. She was amusing, but her points about continuing concerns about intellectual property rights enforcement, and things we take for granted in the U.S. like distribution and trade rights, policy and regulatory transparency, and market access to services shed some of the glamour of doing business there. She also talked about compliance being a problem for American companies going into China, since “what you need to do” can change daily and depend on whom you talk to. Yet despite these obstacles, she was very optimistic about future opportunities in China and stressed that it’s easier to do business there now than it’s ever been— and it was clear that she loves living there.

The second speaker was a high-ranking trade official who offered a dizzying number of statistics on China and foreign investment and stressed the importance of the domestic market as a major lure to American businesses— with 1.3 billion people in China, it’s a huge market to tap. Of course, with income disparity such a prevalent issue in that country, there’s some question as to how many of the 1.3 billion would be able to buy what you want to sell, but there’s no arguing that there’s a real opportunity there. And the numbers he cited in terms of investment growth—both from foreign companies investing in China and the Chinese investing abroad—were truly impressive.

After lunch, we piled into our tour busses to travel to one of Beijing’s suburbs to visit Schenker BITCC, a joint venture between the German-owned logistics company and the Chinese government. It was a long ride, but so interesting—Beijing is huge and we got to see miles of housing, stores, roadside shops, schools, playgrounds, stadiums and many construction projects as the city prepares to host the Olympics in 2008. We were struck by the contrasts between old and new housing, and also old and new construction techniques—we saw many jobs that would’ve been done by machine in the U.S. being performed by people.

Schenker was a really interesting visit—not so much for the facility, which was a modern (and empty) warehouse, but for the manager who spoke to us about being a German ex-pat and learning how to manage workers from a very different culture. He didn’t sugar coat the frustrations he’d had with some of the cultural differences— processes for scheduling and performing tasks were primary examples— and his honesty was refreshing, especially when he told us how much he’d learned from the experience there and how much he’d changed personally and improved as a manager as he came to understand the way things work in China. The challenges really seemed to be worth it and it gave me an appreciation for what it would take to succeed in that situation— working abroad would be such an opportunity for growth.

Once the visit was over and we were all back in our jeans, a group of us headed out to dinner at one of the restaurants that our morning ex-pat speaker had recommended— it was amazingly good food (the Peking duck and an extremely spicy deep-fried chicken and dried chili pepper dish were my favorites) and I learned how to open a bottle of beer with a set of chopsticks.

Beijing & Shanghai - Wednesday, March 15, 2006
Our last morning in Beijing, and I’m sad to leave because there’s so much I haven’t seen of the city. But we’ve got things to do, so I’m packed and ready to move on to Shanghai.

This morning’s visit was to NetBrain Technologies, a privately owned start-up created by an American-educated Chinese man who’s hoping to take it public in the U.S. within the next few years. Not surprisingly, intellectual property rights is a critical issue for the company— the owner talked about cases where disgruntled employees have stolen code from employers and started their own companies, and he’s hoping to combat that by treating his employees well (through company culture, compensation and benefits) and having them sign non-disclosure agreements. Whether those would be upheld if he had to take legal action for employee theft wasn’t as clear-cut as it would be in the U.S., but he said that the government is starting to take IP seriously—as they should if they want foreign companies and foreign technologies to flourish there. Having tried a start-up in the U.S. before moving back to China, he also gave us an interesting perspective on the differences between funding new ventures in the U.S. vs. China— in the U.S., the concept is what sells, so it has to be strong and the numbers have to be there, but in China, your relationship with the investor makes the deal and the concept is secondary. Looking at the office park where the company was located, we all marveled at the elaborate and obviously expensive buildings sitting abandoned and unfinished… were these remnants of deals made on faith that didn’t have viable plans behind them?

En route to the airport to catch our flight to Shanghai, we got stuck in traffic and my bus was stopped for awhile in front of a construction project that was utilizing heavy earth-moving equipment and a bunch of mule-drawn carts to move dirt and rubble. It seemed to represent so much of what we’ve seen so far in China— new and old methods being used together to get things done. It also made me think of other contrasts we’ve seen— between rich and poor, beautiful and ugly, modern and ancient— that make China so different from the U.S., and in my mind, so interesting.

The flight to Shanghai was quick and easy— I had the luck of alphabetical seating and free Tsing Tao beer working in my favor— and before we knew it we were back on tour busses and heading into the city. I knew Shanghai would be different from Beijing, but the skyscrapers and billboards and familiar names of American companies made me think I could’ve been in any large city— except for the Chinese signage, of course.

After checking into our hotel, a small group of us went out in search of dinner and wound up at a restaurant with a translated menu but no staff that spoke English, so ordering was a bit of an adventure. We passed on the “beef tendon in delicious material” and stewed jellyfish, but I’m still not 100% sure what everything was that we ate. Afterwards, we walked around the neighborhood and stumbled onto a French café/bar run by a Frenchman who’d only been in Shanghai for 6 months. His English was good and he was friendly, so we asked him what it was like running a bar there— he said that distribution was a problem, and that there were many things he was trying to get, like certain wines and liqueurs, but it was very difficult and he hoped that as his relationships with the distributors got better, his selection would improve. “It takes time,” he said. Duly noted.

Shanghai - Thursday, March 16, 2006
Our first full day in Shanghai, and everyone’s already found the Starbucks two blocks from the hotel before our morning activity— hearing from a panel of Americans about life in China as an ex-pat and the general challenges of doing business there as part of a multi-national. The companies represented were Weyerhaeuser, Tyson Foods and Intel, and while each exec brought unique perspectives to the ex-pat experience, the take-aways were very similar: it takes a long time and a lot of patience to get results in China, but it’s ultimately worth it, the ex-pat community is very strong and there’s a lot of support there, and that repatriation— going back to the home company in the U.S. after a foreign assignment— can be very difficult unless you make a point of constantly communicating with home base and planning for your return. Unfortunately, many companies don’t take advantage of the new skills and valuable experience their international managers can bring to the table, and a lot of people end up switching jobs and leaving their companies in frustration after foreign assignments. It was a good thing to hear— both as one who’d love the opportunity of a foreign assignment and as one who might be in the position to manage someone with that experience someday.

This afternoon, we went out to the local Coca-cola bottling plant, which was really interesting—we heard about Coke’s strategy in China and their marketing efforts before taking a tour of the bottling facility. They’re definitely making an effort to localize their marketing, which is smart, since what resonates with American consumers probably wouldn’t work as well in China. We were also fascinated to learn about recycling— having seen very few recycle bins, we assumed it wasn’t a priority there, much as pollution and environmental concerns seem to be on the backburner, until the speaker reminded us of all of the bicycles we’d surely seen on the roads, overloaded with stacks of cardboard or heaps of bottles tied together, and we realized that recycling is huge in China because, for better or worse, it’s a source of income for some of its poorest citizens. We don’t have the impetus to sort through garbage looking for recyclables to cash in, so it simply hadn’t occurred to us.
Out in the factory, we watched thousands and thousands of cans and bottles whiz by, being filled and sealed and labeled, and I wondered what percentage of disposable income would be used for a typical Chinese worker to buy a can of Coke or Sprite, and how many could afford that luxury.

Back at the hotel after the tour, a few of us decided to wander the 4-5 blocks up to the main shopping district to check it out and possibly find some dinner, and although we’d been warned, nothing quite prepared me for the onslaught of “Lady, lady, lady—Watch? Bags? DVD? Come look, come look. Gucci, Prada, Rolex, look, look” as street vendor agents grab your arm and stick catalogs of counterfeit designer goods under your nose, trying to lure you into shops or warehouses full of knock-offs. Saying “no” just seemed to encourage them, so I had to quickly learn how to ignore them completely as they followed us down the block. By the end of the evening, we called that area “the gauntlet.” But the shops were neat, and we wound up far from the hotel in a popular spot for hotpot, which I knew had been the downfall of several EMBA students the year before, but we were feeling daring so we took a chance and it paid off—it was by far the best meal in China to date. The tables in the restaurant were equipped with sunken heating elements, and a huge bowl of steaming, spicy chicken soup was placed on our table to boil, along with raw skewered shrimp, meatballs, dumplings, mushrooms and spinach, which we cooked in the boiling soup and then dipped in a spicy peanut sauce. It was a long meal, since we were cooking it ourselves, but really fun and absolutely delicious.

The shops are open late in Shanghai, so we did some more window shopping after dinner before stopping into yet another French café for a drink. Jet lag is still an issue, so I’m hoping to finally get a full night’s sleep tonight.

Shanghai - Friday, March 17, 2006
It was a busy day today, but really interesting. This morning we went out to the local GM plant to tour the facility and hear about the company’s strategy in China. With all of the problems in the U.S., I was surprised that they’re doing as well as they are in China— and surprised that Buick is the aspirational car brand there. So we saw a lot of Buicks being built, noting the process efficiencies they’ve adopted from Toyota, and also noting that robots aren’t utilized as much there as they are in U.S. plants— no doubt a function of labor costs. I was surprised by the contrast between Coca-cola’s and GM’s marketing efforts in China— while Coca-cola really wanted to tailor its advertising to create the greatest impact on a local level, GM was proud of using one brand message across all of its markets. Is GM’s brand successful there in spite of itself? Hard to know.

Our afternoon company visit was to Baosteel, the Chinese government’s vast iron and steel manufacturer. Driving through the company’s grounds outside of Shanghai, we saw rows and rows of worker housing, gas pipelines and train tracks before arriving at the company’s offices to pick up our tour guides and hard hats and then drive out to see sheet metal being processed. It was impressive— huge flat bars of steel, so hot they glowed orange, being forced through rollers at a high speed, back and forth, so that each pass produced a longer, thinner piece of steel. Eventually, as it worked its way down the line, the steel was forced at high speed to wrap around a core to produce a roll of sheet metal that still glowed dark red as it came off the line— once cool, these rolls are precisely what would be purchased by companies like Coca-cola or GM.

On our way back to Baosteel’s offices to drop off our tour guide, she told us about the company’s zoo, which I found amusing in a morbid way since it serves two purposes— the animals there boost employee morale but they also help indicate air quality. Because the company utilizes so much coal and gas, air pollution is definitely an issue, and instead of canaries, they appear to be using peacocks and deer. We saw promotional billboards posted around the grounds that featured the deer grazing in a bucolic scene with the specter of the main plant in the background—an interesting contrast from my American perspective, but because the company is trying to promote the creation of green spaces, it is surely perceived as a positive scene by the workers there.

Shanghai - Saturday, March 18, 2006

Shanghai - Sunday, March 19, 2006
My last full day in the city, and I can’t believe the trip’s over so soon— I could easily stay another week and make another swing through Beijing, but it’s not to be. With most of my classmates leaving for home this afternoon, we all tried to take advantage of the time there by walking around the neighborhood near our hotel and taking in the sights and sounds of the city. We made another pass through the market, too, which was fun.

In all, was such a great trip—and such a great opportunity to see things that I wouldn’t have been able to had I traveled here as a tourist. Being able to visit companies and hear from ex-pats and executives about living and doing business in China has been such a fabulous learning experience. I can’t believe I ever questioned going or that I’d had second thoughts while I was in the middle of final projects last term— it was arguably one of the best parts of the EMBA program. And I want to come back soon.