Shanghai

Transfer Day

At the departing gate in the Beijing airport and tracking the score of the Louisville/ND Big East semifinal game. ND up a couple early but boarding time interrupts…a 2hr flight later ND in Shanghai learns that ND in NY gave back a 14 pt second half lead and lost down the stretch…bummer. Silver lining – plenty of rest for the big dance. Everything goes surprisingly on schedule and we land in Shanghai Saturday afternoon (after a week in Beijing), find our tour guides, get our luggage (no lost baggage) and hop on the bus to the hotel (much better traveling with the group and translators). Beijing is the capital of China and has a history as an economic and cultural hub that dates back hundreds of years. Its size is significant – a population almost triple that of NYC and buildings separated by congested roadways for as far as the eye can see. Very charming in its undeniably strong roots to the Chinese culture but tough to wrap your arms around in just a week…and, aside from its ever-expanding waste line, nothing all that distinctive about the city’s physical appearance. On the bus ride from the Shanghai airport we immediately see some similarities and differences.

For starters, the fear of death as a passenger in a tour bus is just as poignant and the rules of the road are no less “liberal” than they were in Beijing…you quickly re-learn to only look out the side windows unless you find near collisions with nitrogen transporting trucks exciting. But the view from those side windows reveals a city with a unique and immediately recognizable skyline that projects a markedly more modern feel…and more modern it certainly is. Defined by huge buildings, new-age architecture and carefully planned infrastructure, its history will tell the story of a small fishing village turned major metropolis and financial center of the Eastern World. Its location is ideal for a booming international economy – on the eastern coast of the China Sea and the Yangtze River – and with the opening of the ports to foreign trade in the 1842 (as set forth in the treaty ending the First Opium War with Britain…more on this later), it was soon a major economic center. With the rise of the Communist Party in the middle part of the 20th century, the economic growth of the city was severely stunted and it wasn’t until the opening of the Chinese economy (post-Mao) in 1990 that it again emerged as an international hub…hence, the more modern feel. With skyscrapers and high rise hotels/apartments dotting the sky, the two most attention-grabbing structures are the Oriental Pearl TV Tower (a thick-poled, pointy, antennae-like thing with two big red sparkling balls splitting it into thirds…or, as the Chinese see it, “a picture of twin dragons playing with pearls “) and the Shanghai World Financial Center (101 stories boasting the highest observation deck and hotel in the world). Most of these building are no more than a couple years (WFC 2009) or decades old.

Our first day in the new city allowed for a couple hours of rest and familiarization with the hotel – a 6 month new Marriot Courtyard. Nice place; OK location not close (or far) from much. Later in the evening we had a group dinner at a restaurant in an older village with classic Chinese architecture and a bustling street market that overlooks a network of small ponds and streams. After dinner it’s off to the riverfront for a riverboat cruise to take in the sights of the city. The night was both clear and mild enough (and the beer affordable enough) to enjoy the views from the top deck…a nice way to get acquainted with the place. Before heading back to the hotel, the bus makes a stop at Xin Tian Di, the city’s bar district, to let off those looking for some night life. Great spot. We saddled up at an upstairs bar in the Paulaner (where the house brew is served in liters; not pints) and enjoyed some good ol’ German beer. Without responsibility until 10am the following morning, we had plenty of fun...

Day 2

Breakfast was lights out, again. Most anything you could want served on the buffet – a dangerous situation conducive to the development of glutinous habits (i.e. bread pudding topped with vanilla and chocolate sauce as the main course with sides of dumplings, donuts, and peanut butter stuffed crepes). 10 am and time for a bus tour of the city. We return to the same part of town (obviously a favorite for tourists) and take a guided walking tour through the beautiful YuYuan garden. The garden was built by an officer in Ming Dynasty – a place for his parents to live comfortably in old age (not too shabby of a retirement home…pays to have a son in with the Mings). Nice weather and peaceful afternoon. On the walk from the park to the bus we are constantly bombarded with more opportunity to burn our yuan – Mont Blanc pens, fake watches, etc. For the most part nothing of great interest. We are instructed that the best way to handle these pesky “street vendors” is a simple response in mandarin – “booyah” (translation - NO)...turned out to be too juicy not to be obnoxious. 52 of us walking through the park calling up our best late 90’s Stuart Scott – “Sir, Rolex Watch? Best Price. Just for you” hmmm…how about, “BOOOOOYAHHH!”.

During the afternoon we were offered an optional cultural event. Today’s event: a tour of a water village on the outskirts of the city where the Chinese gondola navigates windy, narrow waterways in an old fishing community. It promised to be the Venice of China. Great marketing. Six to a boat and a Chinese man pushing from the back…the water tour lasted all of about 15 minutes and covered maybe a quarter of a mile. Venice it wasn’t but quaint and enjoyable? Sure. The water was lined with restaurants, shops, and food stands. It was its own little mini-economy fueled by the rows of tourist buses parked in the parking lot (each, I’m sure, selling “Venice of China”). Despite feeling a little ripped off, we enjoyed the opportunity to relax and buy some cheap souvenirs for friends and family at home. After 2 hours of making our own little contribution to local business, we met back at the dock for a walk to the buses. A handful of little old ladies (LOL’s) pushing yet another product. No taller than 4’3 with grey hair, lots of wrinkles and the smile of a grandma, these LOL’s would approach each of us holding two handfuls of bags filled halfway with water and live goldfish…speaking only Chinese. It was clear they were “selling” these fish but we couldn’t understand…what were a bunch of tourists going to do with a goldfish in a bag out on the outskirts of Shanghai? The LOL’s, handicapped by the language barrier, acted out what exactly it was they are selling. The pitch was to buy the fish only to then set them free in the river beneath the dock on which they were conducting their business. Soooo, let me get this straight – All you LOL’s sit here throughout the day catching these goldfish…you then imprison them in a jail of plastic and go about selling them to animal-obsessed American tourists who purchase their freedom….well, temporary freedom anyway, before releasing them back into the very same river that you’ve caught them from and plan to soon catch again in hopes of selling to the next group of suckers??? OK, got it… An MBA-style lesson in effective use of “renewable natural resources”.

Day 3

Company visit in the morning to Ford in the financial district. Brand new building in a business park of other brand new buildings and right across the street from the Shanghai Stock Exchange. We heard from the CFO of Ford’s China operations (an American expat). A refreshing presentation that left out the sales pitch and company overview (rightfully assuming his audience to understand that Ford manufactures and finances cars) and instead focused on the differences of actually doing business in China. The opportunities, the struggles, the interplay with a controlling government. A common theme heard throughout the two weeks was the emphasis on joint ventures in the placement of foreign investment. Each industry seems to have its own idiosyncrasies but generally speaking, capital investment by foreign companies is mandated to be done so via a joint venture and then restricted such that a foreign company can have no more than 50% ownership and must share at least 50% with Chinese partners. Our presenter talked about their process for seeking out these important partnerships and subsequently structuring the deals in a way that it makes sense for all involved (board control, management concessions, etc.). Good presentation and a short bus ride followed by an afternoon off. With rain threatening, we visited the well-respected (or so they say) Shanghai Aquarium. It was…eh, it was alright. Nothing exotic enough to warrant a visit on a day with any sun. Nice walk through town from the financial district to the aquarium. Not one piece of trash on the ground…the cleanest city I’ve ever seen.

Best part of Day 3 was the post-dinner entertainment. A trip to the Shanghai Acrobat Show… what incredible athletes. Impossible to put into words. What would we do without youtube? http://www.youtube.com/watch?v=6Yi5EUcnuYs .

Day 4

A day with two scheduled company visits that saw plenty of time on the bus. GE in the morning and Microsoft in the afternoon separated by a Dim Sum lunch featuring the Fun Zing Yu (deep fried smoked fish) – a Shanghainese specialty. Not bad…still tough to get used to bones in everything. It is perfectly acceptable per the local culture to spit the bones out on the table …just too unnatural for most of us. Following lunch we take a ride out to Microsoft’s China HQ’s…as we approach we notice a big corporate office building home to a company called Wicresoft….Wicresoft? I guess that whole knock-off thing knows no bounds, huh? We later come to learn Wicre was a joint venture with Micro and recently spun off as its own.

Last night for lots of folks in Shanghai and it just so happens to be Emily’s birthday. A big group out to celebrate at a Mexican joint – a special on tequila and Corona. Some USC undergrads come in some time around 11ish…too many dudes dancing on the bar…it was getting a little weird. No complaints when they leave. The night ends across the street at a karaoke bar. Bad music. Good times. Cheap transportation - 20 minute cab ride home = 30 yuan or about $4.50…a guy could get used to THAT!

Day 5

A program wrap-up in the morning followed by a group lunch and then dismissal. The educational aspect of the trip was punctuated by a panel discussion with a Hungarian consultant, an Australian investment banker, and a former Chinese diplomat turned Fortune 10 company president. Thoughtful and engaging discussion with each presenting a unique perspective on business in China and its evolution during the last two decades. Final thoughts from our faculty/professor leaders and it’s then back to the buffet line for the second time in as many hours.

With our afternoon free and a flight to Hong Kong not leaving until the next morning, we visited the World Financial Center and wanted to see for ourselves what the view looked like from 1,600 ft. Before stepping onto the elevator, there was a quick video showing changes to the Shanghai skyline over the last 100 years juxtaposed alongside those of NYC and Tokyo. For the first 80 years Tokyo and NYC show gradual growth stretching higher and higher while Shanghai remains relatively undeveloped in comparison…in the final 20 years, Shanghai finds the magic beanstalk beans and catches up very quickly to the other two. Evidence to the fact that with a country of 1.4B people, when they set their mind to doing something, China can really get it done and get it done fast. We take a ridiculously short 94 floor elevator ride and step out to a fully enclosed lower deck before taking an escalator and another short elevator ride up to the 97th and 100th floors. Magnificent views from the peak…and a window through the floor that allows a birds-eye view straight to the ground…it was enough to make even those with the mildest fear of heights get a little (or a lot) dizzy. Standing atop this, the second largest building in the world protruding out from the skyline of a city below that represents tremendous wealth and opportunity for so many, it was hard not to think of it as a target...a feeling that’s hard to explain and admittedly comes without much thought; it just kinda hits you all of a sudden…I suppose it’s the scars of a uniquely American wound that just won’t ever fully heal nor be forgotten. Having never visited the top floors of the WTC, I now find myself at the top of a modern day WTC of the East trying to shake the thought of a plane someday flying into the side of this tremendous building…thoughts that I soon dismiss as those of an imagination run wild. We ride back down to the 1st floor, ears popping along the way, and hail a taxi to our hotel to pack and get some rest for the early morning ahead. Emily turns to me in the cab and asks something to the effect of, “Any idea who China’s fiercest enemies are?” and it’s clear that the feeling up there was more palpable than I thought. I answer that I have no idea and we discuss the words of a panelist from the morning who briefly commented that the focus of the Chinese government has always been and continues to be largely internal. Our quick answer – or rather hypothesis – to her question is that by not confronting world issues (say, in the Middle East, for example) in the same way that the States have, the threats that Americans feel on a regular basis are just not the same here. A thought soon to be reinforced days later when the UN approves a No Fly Zone in the airspace over Libya as China publically “expresses regret over military actions in Libya”, citing its respect for Libya’s sovereignty. Clearly, a different approach to foreign policy…stand by and watch while the bully beats up the little kid for his lunch money or step in and do something about it albeit after a couple of haymakers have been thrown…better late than never.

Low-key night. Flight to Hong Kong in the morning.