China Speakers Bureau: October 2009

Facing the chasm between Chinese and US internet users - Kaiser Kuo

Image by Fantake via Flickr

A great speech by Kaiser Kuo earlier this month at the University of Nebraska, addressing the Sino-US relations and how the internet plays an growing role. Few people outside China have an idea how the largest group of internet users, the Chinese, are using their newly-found freedom. You can find the link here.
The speech, Shouting Across the Chasm: Chinese and American Netizens Clash in Cyberspace, can be listened to here. A warning ahead: first you have to go through some Nebraska information and you might have to use a fast internet connection.

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Kaiser Kuo is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

Debunking three China myths - Shaun Rein

Shaun Rein takes the stage again in Forbes, debunking three myths about (business in) China that are no longer true and perhaps never have been.
1. China's economy is export-led
2. China has a limitless supply of cheap labor.
3, Connections are everything
One the second point he argues that retaining talent has become more important than ever (and then we do not talk about the thousands of unemployed graduates, who still have to build up their qualifications):

At the white-collar level, most multinationals need to rethink their human resource strategies. Job-hopping is high, with many companies losing 20% of their employees a year. The overwhelming reason younger white-collar workers leave their jobs is not because their salaries are too low but because they see no career paths there.

Many more useful tips in Forbes,

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Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your conference? Do get in touch.

Cutting out the middle men in travel - William Bao Bean

William Bao Bean by Fantake via Flickr

William Bao Bean, partner at the Softbank China-India Holdings, gives a thorough overview on how the travel industry in China is developing online. With the Beijing Olympics over and the Shanghai Worldexpo coming, infrastructure in hotels and other tourist facilities have increased dramatically, although profits have plunged.
The strongest digital companies, C-trip and E-long, are still going strong, but being squeezed by the possibilities for hotels to connect directly to their customers, both individual travelers, but also company.
In the hotel sector overcapacity at the high end have forced prices down at the top-end, while at the bottom budget hotels have been increasing prices, hurting mainly the middle part of the sector.

More at Traveldaily.cn

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William Bao Bean is a speaker at the China Speakers Bureau. When you are interested in having him as a speaker, do get in touch.

ChiNext as new source of capital - Rupert Hoogewerf

The tallest building in Shenzhen, Shun Hing Square

Shenzhen via Wikipedia

In Shenzhen today ChiNext, the Nasdaq-style stock exchange, was launched to provide smaller and middle size companies with capital. An excellent opportunity for entrepreneurs, Hurun publisher Rupert Hoogewerf tells Reuters.

'The biggest challenge for (China's) entrepreneurs ... was how to raise their first capital,' said Rupert Hoogewerf, publisher of the Hurun Rich List.

'The second board can effectively shortcut that first break.'

China has already two stock exchanges, in Shanghai and Shenzhen, but they were mostly dominated by state-owned companies.Many entrepreneurs also sought a listing in Hong Kong.

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Rupert Hoogewerf is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

China's strong consumer base - Shaun Rein

Forget China's older generation via Wikipedia

Shaun Rein is giving foreign retailers a crash course on who to target among the Chinese consumers and what the dangers are, in Forbes. They should forget about the Chinese equivalent of the baby boomers, the older generation will not start spending even when health care and pension systems are in place.
Shaun Rein:

The typical Chinese retiree has lived through a world war, a civil war, famine, the Cultural Revolution and political economic turmoil that make the current malaise smacking the U.S. look like almost nothing. Do you really think they will trust new policies so much that they stop saving and suddenly start spending? It is doubtful. Moreover, older Chinese have mostly missed out on the economic boom since 1978. They retired before the gold rush of the last few years, or they've been working in state-owned enterprises where the pay stays low. Even though their savings rate hovers around 60%, they don't have much money socked away.

The new consumer base for multinationals will be in the third and fourth tier cities, although the struggle for the Chinese consumer in those places will be tough as major domestic players like Haier and Li Ning have also set eyes on those regions:

First, consumers in third- and fourth-tier cities are not as price sensitive as many think, but they are very value conscious, and they want premium products...The lesson there is that companies shouldn't just bring in cheap, watered down versions of their products. They need to bring in their top lines too, although they might have to change those products a bit.

More lessons to learn in Forbes

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Shaun Rein by Fantake via Flickr

Shaun Rein is also a speaker at the China Speakers Bureau. Do you want to share his insights at your conference? Do get in touch.

Economic growth not yet convincing - Arthur Kroeber

Arthur Kroeber by Fantake via Flickr

China's bean counters have been reporting enthusiastic economic growth of even 8.9 percent in the third quarter, but our own analyst Arthur Kroeber of Dragonomics is not yet convinced,he tellls DNA. "The quality of the growth stinks."

The government looks set to meet and perhaps exceed its 8% growth target for the full year, but "we find it hard to share in the general euphoria about China's economic prospects because the structure of growth stinks," notes Arthur Kroeber, Beijing-based managing director of Dragonomics Research.

In particular, Kroeber points to nominal GDP, which grew by only 4.7% in the first nine months, "which is a bit better than in the first half, but still incredibly slow."

In effect, around 40% of "real growth" is still generated by price declines, and investment accounted for 95% of growth in the first three quarters. "Consumption contribution remains at historically low levels and much of it is coming from the government, not the private sector," says Kroeber.

More at DNA.

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Arthur Kroeber is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

Women rule the wallet - Shaun Rein

In charge by Praziquantel via Flickr

With an economic growth of 7.9 percent in the second quarter of 2009, China is a must for global retail companies, despite its lower base. And in China, women under 35 rule the wallet, says Shaun Rein in his latest article for Forbes.

That one consumer segment has defied the analysts and kept on spending like it's 2007. China's overall retail sales rose 15% in the first half of this year, and that growth was driven in large part by women under the age of 35, buoyed by China's $586 billion stimulus package and a stock market that has risen around 80% since January. My firm, the China Market Research Group, recently surveyed female consumers in China, and 80% of them said they expected to spend more in the next six months than in the last six.

Many people outside China fail to understand how much the position of women has changed in the past decade, Rein writes. They bring in half of the family income, decide on many of the purchases and even for big ticket items they have at least an equal say. And they are focusing on other issues than men:

These young women are greatly concerned about the safety of the products they buy for their children. If Americans worry about the "Made in China" label, Chinese women worry even more, for they have to deal with it every day. Many choose where they shop based on whether they think they can find genuine and non-toxic products. One 32-year-old woman in Tianjin told us, "I shop at Wal-Mart ( WMT - news - people ) because I trust that the products its sells are real and safe. To ensure safety, I am willing to spend more."

We've found many affluent women flying to Hong Kong or Korea to buy baby formula, even before last year's melamine scandals. In general they trust foreign brands more than domestic ones. As a 34-year-old woman in Zhengzhou told us, "Foreign firms are less likely to cut corners in the production and quality control process." The vast majority of females in 15 cities told us that they would spend 20% or more for products for their babies if they felt they could fully trust that they were safe. This covers everything from clothing to food products to soaps. The fear Chinese consumers have of being hurt by tainted merchandise affects every kind of purchase decision.

More at Forbes.

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Shaun Rein by Fantake via Flickr

Shaun Rein is a speaker at the China Speakers Bureau. You want to share his insights at your conference? Do get in touch.

China cannot lead the world - Victor Shih

Beijing, not yet ready via Wikipedia

Is China going to lead the world? That questions is asked frequently, but Victor Shih is pretty sure in his piece in the Wall Street Journal that China is far from ready.

But leadership does not depend on cash reserves alone. To lay credible claim to a bigger global role, Beijing must show it understands the rules that make a modern economy work and how to play by them. The economic downturn has only shown how far behind Beijing is in this regard. China's market institutions clearly lag those in more advanced Asian and Western countries. Parts of the government continue to blatantly disregard property rights and contracts. Rules are conveniently bent to favor powerful state entities.

Victor Shih goes over a wide range of recent incidents and his conclusion is devastating:

In all these examples, the Chinese government could have chosen to show the world it is willing to respect property rights, enforce contracts fairly and discipline firms that violate the rules regardless of their political connections. Instead rules were disregarded to maintain the facade of relative budgetary balance and SOE profitability, and connected insiders and large SOEs with political influence were once again told that they need not adhere to contracts. Private entrepreneurs and outsiders were reminded that the law means little without political backing.

More at the Wall Street Journal.

Victor Shih by Fantake via Flickr

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Victor Shih is a speaker at the China Speakers Bureau. When you are interested in having him at your meeting or conference, do get in touch.

My quirkiest billionaire - Rupert Hoogewerf

Image via Wikipedia

Rupert Hoogewerf is interviewed by Shanghai Urbananonymy on his ten-year operation of documenting wealth in China with his Hurun or China Rich List. What are the differences between the British and the Chinese well-to-do?

The entrepreneurs in China are all first generation. In Britain the Duke of Argyle, for instance, can trace his roots back to the year 600. If you go through The Sunday Times rich list you see that the focus is less on entrepreneurs, it's more on aristocrats. But in China's there's no old money. Everyone started from the same point, although some were born into families with connections and were able to leverage those connections to get their first break.

And what was his quirkiest billionaire?

We had a crocodile farmer in south China. He had the largest crocodile farm… leather and meat. He's no longer on the list. The crocodiles ate so much food they put him out of business. He had something like 30,000, 40,000 crocodiles, which is a lot of crocs. This year someone fell off the list because they got divorced, the settlement cost him a mint. I've been looking for the sex toy manufacturers, who apparently have 90 percent of the world's sex toy market. But it's very difficult to find the king of porn and value him.

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Rupert Hoogewerf is a speaker at the China Speakers Bureau. When you need him at your

Image by Fantake via Flickr

conference, do get in touch.

Why the Chinese pirate - Shaun Rein

Rupert Murdoch via Wikipedia

Rupert Murdoch was the lastest Western corporate tycoon in Beijing, asking the Chinese authorities to crack down on fake products and the infringement of intellectual copyrights. Shaun Rein sets him straight and explains in Forbes why fake DVD's and Gucci bags are not dissapearing from China's markets.

First, China's piracy problem is not a matter of morality. More than anything, it is a matter of poverty. Piracy was similarly rampant in Taiwan, Korea and even Japan until consumers there got wealthier and domestic forces emerged to press those countries' governments to take action.

The Chinese won't do much beyond the occasional high-profile crackdown to show it takes the issue seriously, except when there is serious domestic pressure, as there has been to root out fake medicine and milk powder, for instance.

On a local level, even if the central government wanted to tackle the issue seriously, bigger interest would stop them. Shaun Rein:

Second, you need to change your sales and pricing strategies for products like software and DVDs.Time Warner provides an example of how not to do it. It realized it needed to lower its prices, so it started selling DVDs for $3 apiece. The problem? Most pirated DVDs in China sell for less than a dollar.

Much more at Forbes.

Shaun Rein by Fantake via Flickr

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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your conference, do let us know.

Most-sought speakers for October 2009

Kaiser Kuo by Fantake via Flickr

Just like in September, our top-10 ranking of most-sought speakers sees this month a relative huge shift, including a new number one: Kaiser Kuo. Shaun Rein has been holding this place since we started the ranking last year after we started the China Speakers Bureau, but now Kaiser Kuo has beaten him, although by a very small margin. Also four newcomers, although they have been all in this ranking before.
Both Kuo and Rein have been working hard in the mainstream media and Kaiser Kuo had on top of that two major key note speeches, possibly explaining his current position at the top.
We follow the media adventures of our speakers pretty close, and over the past few month we see a steady drop in the quotation we see. Perhaps the downturn in the media is at last also hitting the coverage of China or China-related subjects, but we are not sure of that.
Who was not missed by the media was Rupert Hoogewerf - although he dropped a bit in the rankings. His latest Hurun report, telling us the the rich in China have become more rich, has been quoted in 48 hours in almost a dozen different languages including Korean and Vietnamese, showing he really got a hot subject.
Annette Nijs climbed as she presented her book in China on October 1 in Amsterdam, unfortunately only in Dutch, but we expect a translation into English soon. Also back is our celebrity author Zhang Lijia, who is currently at a prestigious program in the US, so had little time to work on the media, but still got back in our ranking.

The October top-10 (September in brackets)

Kaiser Kuo (2)
Shaun Rein (1)

Zhang Lijia by Fantake via Flickr
William Overholt (7)
Annette Nijs (10)
Victor Shih (9)
Tom Doctoroff (5)
William Bao Bean (-)
Jeremy Goldkorn (-)
Rupert Hoogewerf (4)
Zhang Lijia (-)

China's super-rich are getting richer - Rupert Hoogewerf

CHONGQING, CHINA - JUNE 16: Rupert Hoogewerf ...

Rupert Hoogewerf by Getty Images via Daylife

China's rich have not only survived successfully the financial crisis, they are getting richer very fast, says Rupert Hoogewerf, the author of the annual Hurun report, documenting for a decade the well-to-do, according to Reuters. The country now counts 130 billionaires, up from 101 last year and that number might be under-reported.

China's rich are getting richer, with the average wealth on the list $571 million, up almost one-third from last year, said compiler Rupert Hoogewerf.

"With the greatest wealth destruction in the west of the last 70 years, we've seen China buck the trend and the wealth seems to be still growing," Hoogewerf told Reuters on the sidelines of an event to unveil the 2009 rich list.

"They've put the credit crunch behind them," he said. "The key driver has been urbanization. You've got all these cities being built, and that requires property developers, iron and steel manufacturers. The latest thing is cars."

More at Reuters.

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Rupert Hoogewerf is also a speaker at the China Speakers Bureau. When you are interested in having him as a speaker, do get in touch.

China's fourth estate, the internet - Jeremy Goldkorn

The Danwei crew by sinosplice via Flickr

Democratic elections and free media might be far away for China, but the internet is increasingly taking up some functions in allowing people to tell the government what they want, says media watcher and Danwei-owner Jeremy Goldkorn in Times Online.

Jeremy Goldkorn, founder of danwei – a website focusing on the media in China, said: “The Internet is the closest China has to a fourth estate. It’s the only platform citizens have for airing grievances. It is increasingly going to play a part in monitoring corruption and government malfeasance.”

No censorship filters at Beijing internet cafes - Jeremy Goldkorn

Change the World, Obama. | Nobel Prize for Pea...

Image by sara b. | 2009 via Flickr

Despite all the recent upheaval on the Green Dam Youth Escort internet filters, Beijing cybercafes did not have this or other filtering software installed, tells internet expert Jeremy Goldkorn ZDnet Asia. Registration has been tightened, though.

Jeremy Goldkorn, founder and editor-in-chief of danwei.org, a site focused on media, advertising and urban life in China, said a recent check on some cybercafés in Beijing indicated the absence of the content filter.

"One of my colleagues visited several Internet cafes in Beijing over the past week and found that none of them had installed Green Dam or any other new censorship software on their computers," Goldkorn told ZDNet Asia in an e-mail interview. "However, they are strictly enforcing registration [where] all users have to present and log in with their ID cards."

He said Green Dam "was just one of many tools" the Chinese government can tap to control Web content. "Green Dam itself may disappear, but the government's intention to continue controlling the Internet does not seem to be changing," he noted.

Goldkorns own website Danwei.org is blocked inside China.
The article in ZDnet Asia also quotes Reuters, writing that at least one Beijing high school refused to install the officially compulsory software.

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Image by Fantake via Flickr

Jeremy Goldkorn is also a speakers at the China Speakers Bureau. When you need him at your conference, do get in touch.

Corruption: a nono in China - Shaun Rein

Image by doncorleon via Flickr

Corruption in China was long seen in the foreign business community as an unavoidable nuisance. But now the Chinese government has been coming after huge companies like Rio Tinto, Coca-Cola and McKinsey, avoiding corruption has become - even more than in the past - a must, to stay in business, writes Shaun Rein in Forbes.

When your company is charged with corruption in China, you have to worry about not only bad publicity but also running afoul of America's Foreign Corruption Practices Act and a Chinese government that is increasingly clamping down on the corrupt activities of foreigners.

Buying guanxi has always been troublesome, as your new-found friends retire or move away. Now, increasingly, your guanxi ends up in jail and foreign executives might follow them if they are caught. Corruption has always had its downside, Rein says in Forbes:

Commercial corruption is a very serious problem. You end up working with the wrong partners and suppliers. If the corruption is extensive, your own team members are working more for themselves than for you. ...

In the end, never give a bribe. You can make money in China without it. Even if you have to give up some opportunities, the risks aren't worth it. The U.S. government will hold you accountable, and the Chinese government may nail you as it looks for more high-profile targets like Coke and McKinsey to show that it takes corruption seriously, and to set an example. You don't want to

Shaun Rein by Fantake via Flickr

be that example.

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Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

My situation is not Orwellian - Jeremy Goldkorn

Jeremy Goldkorn by Fantake via Flickr

This summer Jeremy Goldkorn saw his corporate website Danwei.org blocked by the censorship in China, an honor he shares with many including YouTube, Twitter, Facebook and a few others. Nevertheless, as he writes in The Guardian, life goes on, despite this nuisance.

Within weeks of the site being blocked, I attended – by official invitation – a provincial government media forum at which I was allowed to air my views. Soon after that, a Chinese TV station hired me as a presenter, to conduct a series of interviews with government officials and well known business leaders about environmental problems. The programme is for a Chinese audience, broadcast nationwide. Not exactly Hard Talk, and they may not broadcast the interesting footage, but I got to give a senior government official a hard time about his department's empty eco-slogans. I also asked Liu Yonghao – one of the richest men in China – what he intended to do about the methane emissions caused by the farting of all the cows his New Hope Group owns.

Most hilariously, and this is difficult for anyone who has not spent time in China to understand, the state-owned China Daily newspaper ran a quote from me complaining about internet censorship on the top headlined story of its front page.

More at the Guardian.

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Jeremy Goldkorn is also a speaker at the China Speakers Bureau. When you need him at your conference or other meetings, do get in touch.

Non-performing loans heading for a stress test - Arthur Kroeber

Image via Wikipedia

Non-performing loans have been dealt with effectively over the past decade, but as those old loans and the current financial rescue packages are added up, China's financial system is heading for an unprecedented stress-test, writes Arthur Kroeber in the Financial Times.
Kroeber:

Chinese NPLs can be divided into four tranches. Tranche 1 is Rmb1,400bn removed from the “Big Four” commercial banks – Bank of China (BoC), China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (ABC) – and China Development Bank in 1999.

Tranche 2 is Rmb1,300bn removed from the first three of the Big Four in 2004-05 as they were being prepared for international stock market listings, plus some other bits and pieces from other banks in 2007.

Tranche 3 is Rmb816bn removed from ABC in 2008, presumably preparing the ground for it to list.

And Tranche 4 consists of whatever NPLs still sit on the banks’ balance sheets, especially as a result of this year’s lending binge.

Strategy was: rolling them over into the future. But a time-bomb is ticking, depending on the economic growth rate of the country. The burden for the future is substantial, but not catastrophic, writes Kroeber:

But this bet absolutely cannot be placed a third time.

The above scenarios only work if the financial system generates no net new NPLs in 2011-2019 beyond the banks’ own ability to provision and write down.

After 2020, demographic and other factors will turn unfavourable, and the structural real GDP growth rate will fall from 10 per cent in 1980-2008, and an expected 8 per cent or so in 2010-2020, to around 5 per cent. When that happens, growth can no longer erase past NPLs – only inflation can.

More at his column in the Financial Times.

Arthur Kroeber by Fantake via Flickr

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Arthur Kroeber is a speaker at the China Speakers Bureau. When you need him at your conference, do get in touch.

Internet nanny tighter than ever - Jeremy Goldkorn

Image by Fantake via Flickr

The cat-and-mouse game between China's internet users and its censors - sometimes called the internet nanny - has been fiercer than ever, says Danwei's Jeremy Goldkorn to the Wall Street Journal:

“This year has been tighter than for many years,” said Jeremy Goldkorn, founder of Danwei.org, an English-language outlet that translates Chinese news.

He said that most of the blocked sites are social networks like Facebook, Twitter and YouTube, which posted anti-government texts or videos during the July upheaval of the Xinjiang Uygur minority group.

Danwei has been blocked since July 3. Other sensitive sites such as Reporters Without Borders and Amnesty International were taken down this week. To date this has become the longest continuous blockage in the nation’s history.

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Jeremy Goldkorn is a speaker at the China Speakers Bureau. When you need him at your conference or meeting, do get in touch.

Thursday, October 29, 2009

Facing the chasm between Chinese and US internet users - Kaiser Kuo

Wednesday, October 28, 2009

Debunking three China myths - Shaun Rein

Cutting out the middle men in travel - William Bao Bean

Friday, October 23, 2009

ChiNext as new source of capital - Rupert Hoogewerf

China's strong consumer base - Shaun Rein

Economic growth not yet convincing - Arthur Kroeber

Thursday, October 22, 2009

Women rule the wallet - Shaun Rein

China cannot lead the world - Victor Shih

Sunday, October 18, 2009

My quirkiest billionaire - Rupert Hoogewerf

Friday, October 16, 2009

Why the Chinese pirate - Shaun Rein

Wednesday, October 14, 2009

Most-sought speakers for October 2009

Tuesday, October 13, 2009

China's super-rich are getting richer - Rupert Hoogewerf

Monday, October 12, 2009

China's fourth estate, the internet - Jeremy Goldkorn

Friday, October 9, 2009

No censorship filters at Beijing internet cafes - Jeremy Goldkorn

Thursday, October 8, 2009

Corruption: a nono in China - Shaun Rein

Wednesday, October 7, 2009

My situation is not Orwellian - Jeremy Goldkorn

Tuesday, October 6, 2009

Non-performing loans heading for a stress test - Arthur Kroeber

Friday, October 2, 2009

Internet nanny tighter than ever - Jeremy Goldkorn

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