global_jd

Chinese needs

The US General Accounting Office surveys overseas State Department posts and finds a continuing shortfall in language skills, particularly in Chinese and Arabic. See weblog summaries, and GAO PDF. The research does not discuss whether there is an actual lack of such skills in the world, or only a lack among State staffers who can apply for such positions... it's plausible that, in China's case, better candidates may be going to the business sector.

Selling software in China

Great, optimistic perspective from Bud Michael, a San Jose CEO. Four key paragraphs from the piece::

"First of all, business people have to be able to separate political/social views from business issues. The Chinese business people I've dealt with certainly do. This doesn't mean leaving your conscience at the border, but it does mean realizing that not everybody looks at the world the same way we do. Silicon Valley is a leading source of technological innovation, and if we're going to export that technology to the world at large we must learn how to operate in different environments.

"The government controls almost all aspects of Chinese society; we revel in relative freedom from government interference. Good for us, not so good for them. But my advice is simple: deal with it. I tip my hat to the U.S. tech leaders who have been grilled by Congress and often vilified in the U.S. press for "selling out" in China. To me, they are pioneers in this brave new world of capitalism co-existing with communism, and I appreciate their willingness to take their lumps in the cause of market expansion.

"My overall assessment of the Chinese opportunity for U.S. enterprise software companies is optimistic. For companies in the storage and security fields, particularly, China presents an enormous opportunity. The commoditization of high-end serving technology, which bedevils companies like Sun and SGI, has opened up a large market for companies that can offer solutions for the new-era enterprise data center. China's preference for Linux-based server architectures is a real advantage for those who can deal in the Open Source environment.

"It's not a perfect world in China. Its transformation from a planned economy to a market-driven economy proceeds in fits and starts. As often as you see promising developments you run into incomprehensible regulations. Piracy and lack of protection for intellectual property remain serious problems. Finding local partners with a commitment to outflanking the bureaucracy and guaranteeing IP integrity is an absolute necessity. But, in a brave new world, only the brave will thrive."

China analysis

Foreign Policy touches on some of the economic aspects that are not always discussed elsewhere. The GDP per capita is actually higher than in many comparable regions; there is also a far higher degree of centralization than elsewhere too. The article provides a basis for understanding many of the "trophy buildings" I saw on my visit to the mainland... the decisionmakers in the party are approached by those who see contracts available, and so the business sense of the deal may not play as large a role as the personal relationships involved.

"Political power has become more valuable because it can be converted into wealth and privilege unimaginable in the past. At the moment, China’s economic growth is having a perverse effect on democratization: It makes the ruling elite even more reluctant to part with power."

Business bankruptcies significantly exceed the norm. Investments are profitable for the few, not the many. The author suggests that the rate of this behavior may increase, as time runs out for the ability to direct that wealth.

Pub kicks smoking

Off-topic, but a good example of why some businesses find regulation advantageous: "LONDON - British pubs group JD Wetherspoon said on Monday it would ban smoking in all 650 of its pubs by the end of May 2006, pre-empting government plans for a public smoking ban and knocking its shares." But then again, he'd still like the owners-of-legal-force to get after his competitors: "... Wetherspoon criticised the government plans, which would only allow smoking in pubs that do not also sell food. 'The government's approach to the issue of a smoking ban does not make sense, since pubs can get around it by giving up food sales. We believe our approach of a complete ban after a period of notice is the right one.'"

Retail in China, India

Rajesh Jain highlights a Wall Street Journal article comparing retail trends in China and India. (He provides a link to the WSJ writing, but that's locked behind a remember-the-password wall.) A tentative conclusion is that China's consumer market may grow more quickly than India's, because of the greater flexibility and evolution in distribution channels. (But, assuming that current growth levels continue and that income disparity is not a factor, then what happens to the capital that is not spent on consumer goods...?)

Amazon market in China

At Poynter, Fons Tuinstra speculates on what type of market Amazon might see in China, as a result of its recent investment there. "As an ordinary Chinese consumer I do have my doubts about the profitability of retailing books, DVDs, and music online in China. Compared to the rest of the world, books are cheap, low-margin products that are widely available in Chinese cities. It might be more difficult to get them in the countryside, but that is unfortunately also the place where very few people have online connections yet. The main trouble for legitimate publishers is that when they have a successful book, pirated copies will show up to prevent any decent profit making. For music and DVDs, it's even worse... DVDs with movies that have not yet been released to the home market are available here for less then US$1; they are tremendously popular, and most households have stacks of hundreds of them. In that way the official censorship of movies does not work, but it also stops any legitimate retailing business." It takes awhile for an actual marketplace awareness and set of checks-and-balances to build up... in a way the situation seems similar to what the nations of the USSR have undergone as well. Widespread local production of digital assets might be the way to eventually evolve a sense of respect for the work of others...?

Net growth

At CNET: "The number of PC users is expected to hit or exceed 1 billion by 2010, up from around 660 million to 670 million today, fueled primarily by new adopters in developing nations such as China, Russia and India." There's also information on how technology groups are trying to adapt marketing strategies to different regions, although it's hard to see how to get past a conundrum like this: " A low-end Windows PC costs about $350 without a monitor. That's just above the $340 per-capita income of Vietnam.". One option is sharing machines, which makes "in-the-cloud" storage of personal data more attractive. Lots more here... big article, I've printed it out for later re-reading.

China vs India

Dale Fuller of Borland talks with Wiliam Holstein of Chief Executive magazine about how China and India are comparing in the ability to offer technical labor contracts. A government official in China is said to have declared "everyone will be speaking English within 20 years." India has the advantage in longevity and western exposure, but China has the advantage in being able to leapfrog over those early lessons and implementations. Surprising: "China is a little bit lower-cost than India. But I don't think that will last for long." Interesting: "Between the two cultures, there are some distinct differences. One is that we see more and more services going into India, the complete service, everything from consulting services to a full customer center where you have your phone systems set up with people answering them. It's all tied together. Having been established for a while, the Indians have a methodology and a process that's very familiar to those of us in the Western world." Noteworthy: "(Q) Isn't some of this work too complicated to be outsourced or offshored? (A) Yes, the environments are more complex. There are multiple platforms, or different kinds of computer systems, and they have to work together. It's a lot more complex. The notion that you can make all that work well together by taking your secret sauce and giving it to someone else just doesn't make sense."

Strait of Malacca

The Economist analyzes the possibilities of sudden dramatic economic change in China, Japan and nearby nations through attacks on the oil-carrying chokepoint.

China/US trade

Jeffrey Sparshott at the Washington Times has a to-the-point overview of current US politics over working with those living in China. Labor union officials in the US wanted legal restrictions against some unstated types of trade; administration officials rejected "economic isolationism" in favor of "economic engagement". Some think that increased US exports to China would be better than raising artifical barriers to China exports to US. John Kerry got his soundbite, and the AFL-CIO President said it was "an outrage and an insult to American and Chinese workers." Meanwhile there's a parallel issue of currency manipulation, and another issue of whether China will fit into lower tax brackets based on various value judgments written down in the 1930s. I'm glad I'm not the one who has to sit in meetings and figure this all out.... ;-)