What I found most interesting was the “child” part – when I was 15 I would have slugged anyone who called me a child.  During the summer of my 15th year, I was working in our metal stamping plant where the highest temperature reached 103 F (40 C).  I had my first factory job when I was 14 turning wheels on a lathe.  My Father never read child-labor laws, and thank God for that.  It was an invaluable experience that I am sad to say I won’t be able to give to my son.

I can remember in 1998 visiting a factory for a major automotive supplier in Taiwan.  There were 14 year old boys working on the lines making seat belt assemblies.  I asked about it and found that they were students at the local technical school.  They worked half a shift on the line and spent the rest of the day in class studying engineering.  Today, 12 years later, they would be around 26 with degrees in mechanical engineering and over a decade of hands-on experience.  I imagine some of them are running plants in China now.

I’ve written about The Wiffle Ball Life before, a term coined by P.J. O’Rourke to denote the rather pathetic American obsession with safety, self-esteem, and never doing anything the slightest bit risky – especially if it might also be fun.

I understand that Apple is worried about its image, and I acknowledge that those eleven 15 year olds may not have wanted to be there.  But there is a big difference between a 15 year old farm kid fibbing about his age to get a good factory job to help support his family and using 6 year old slave labor in an illegal fireworks factory in Sichuan.  It would be nice if the amazingly flexible English language had a concise way of stating the difference.  I think “under-aged labor” is more reflective of the reality of the situation.

Should you need to verify that your suppliers are not using “under-aged labor”, our friends at China Quality Focus can perform a Corporate Social Audit for €376 + travel expenses, a small price to pay to avoid the kind of (undeserved) bad publicity Apple is experiencing.  PassageMaker can also help our clients, under the auspices of a Vendor Coordination contract, draft supplier agreements to reflect the social norms of their home country or industry.

A better solution would be to have PassageMaker perform the Assembly-Inspection-Packaging functions in our 100% US-owned and -operated Assembly Center.  We will warrant that we meet the necessary social compliance metrics.

Give us a call before you write the press release or talk to the New York Times.

Not that China is necessarily our enemy, but they are certainly a competitor, and I don’t normally borrow money from my competitors.  Some interesting articles covering all sides of the USA declining(?) debate and other silliness.

• America On The Rise – I sure hope so, and the author’s demographic points are very valid
• 10 Mega-Themes That Spell The End Of Western Dominance – for a contrary view, if a bit overly pessimistic IMAO
• How America Can Rise Again – a very good overview of our dynamic creative culture and moribund political system – he had me until he started pointing to the Carter Administration as his example – please – but overall a very worthwhile article (hat tip to David Bradley)
• Foreigners cut Treasury stakes; rates could rise – if the US government was spending this borrowed money on upgrading our infrastructure, that would be one thing…
• Foreign demand falls for Treasuries – more detail
• Jitters over China’s waning taste for T-bills – more if you can stand it
• Uncle Sam vs the Dragon – this is a good strategic overview
• EXCLUSIVE: Help Wanted — ‘Arrogant Americans’ Need Not Apply – worth a laugh
• Flip-flop diplomacy with the Dalai Lama
• The Global Debt Bomb – interesting interactive report – I feel like I need an aspirin
• China to release pollution-fighting fish in lake – and this is just odd

Sorry nothing more for today, too much catch-up from Chinese New Year.

More interesting articles:

• Hong Kong remains world’s freest economy: report
• For this American, the idea that the US government can get Google to do anything is silly
• Impressive China economic growth numbers
• An ode to the internal combustion engine
• Now IMDB is blocked in China
• From Wired, In the Next Industrial Revolution, Atoms Are the New Bits
• De-industrializing Detroit
• How to Push a Dump Truck Out the Window – the wreckage that was America’s 4th largest city
• US slaps duties on electric blankets from China
• Bacteria Rebuilt To Make Oil
• We Are So Screwed – a fascinating look at financial crises
• China protests US arms sales to Taiwan

The last two weeks have been insane.  The pollution was unbelievable up until this past weekend, as bad as I’ve seen it in over a decade.  I could taste it and feel it on my teeth.  Blowing your nose was a bit of an adventure and made me wish for black handkerchiefs.

It has also been fun as the Great Firewall is now blocking Bloomberg completely and Reuters about half the time.  Several IT guys we’ve worked with in the past have left China for Thailand because the Firewall is too big a pain in the neck.

Day 15 – Customer visits seem to to be an almost daily event.  So far this trip we’ve had them one after the other from USA, France, Australia, etc.  I was running late, so I hired one of the gypsy cabbies who hang out by our apartment complex to run me across the street to the office instead of taking 10 minutes to walk.  He proceeded to pull straight out into oncoming traffic driving the wrong way down the main road and then cutting across 4 lanes of oncoming traffic to get to our side of the road.  Such is life in China.  After 10 years here, Mike still doesn’t drive.

Lunch was nothing special, though I am constantly amazed at how fatty the meat here is.  In the USA, where nearly everyone can stand to lose a few pounds, fat is bad, horrible, terrible stuff.  Here, it is where the flavor is.  And hardly anyone is overweight.

fatty pork and bok choy with garlic

lovely beef and mushrooms

At night I head off to Futian to meet an old friend who is now a rep for PassageMaker.  He was born in Hong Kong but raised from infancy in the UK, so he speaks perfect British English.  He moved back to HK on the day of the handover in 1997.  He wanted pizza and beer, so we go to NYPD (New York Pizza Delivery), an outdoor place that serves the best American style pizza I’ve ever eaten.  Really.

The owners are a couple American Born Chinese (ABC) from California who developed a dough recipe that is mind blowing.  Crispy and soft at the same time, it kicks the pants of anything I’ve tried anywhere else in the world.  All ingredients are flown in weekly from the USA.  And the beer is dirt cheap, too.  Across from our table was a skyscraper with a gigantic TV across the top 5-6 floors.  We watched TV while we ate and chatted.  My camera sucks in low light, so I couldn’t take a photo.

Sitting outside on a nice night, eating great pizza, drinking cold beer, watching a TV 5 times the size of my house and hanging out with an old friend, all for about 20% of the cost of a similar meal in the USA, I wonder why the heck I don’t live here full-time.

NYPD extra large supreme

Futian at night - the colors constantly cascade

Day 16 – Worked all day and well into the night.  We didn’t leave the office until nearly 11 PM.  Given the hour, Mike’s wife thoughtfully arranged for dinner – a meal of grilled tofu, potatoes and lamb skewers, washed down with copious amounts of cold beer.  Oh, did I mention it was on the side walk, sitting on stools that would be reserved for a pre-school classroom in the USA and eating off a plywood folding table sized for a dwarf?  It was bloody fabulous.  It cost about $5.  I love this place.

eating meat and drinking beer on the street - yang rou chua'r & toilet paper napkins

grilled tofu - really good

our dining table

our chef

delivery bike - it's a good sign of quality if the locals will order delivery - they must be doing well, as a few days later they helped me make change to pay a cab driver who was out of small money - whole operation runs on a cell phone

Day 17 – A full day at the factory.  We are working on a big order that needs to go by the end of the month, and we are using this as the first test case of my ideas for operational improvements.

The view from our factory manager's window - Buji, an industrial suburb of Shenzhen

industrial park dormatories - maybe 2500 people live and work here

Who doesn't like Corinthian columns on their factory? I know I'd like them.

Every industrial park needs a decorative fountain!

The back part of our industrial park is still under construction - note the concrete erosion control lattice on the hillside - you see this everywhere in Asia

I joined the managers from the factory and had my first meal at the park’s cafeteria.  Food was not bad, certainly not as bad as they’d told me.

Beef & mushrooms for $1

That night we picked up some prospective clients for dinner at my favorite Xinjiang restaurant.  I’d gotten them hooked up with my old friend from Taiwan as a translator and we all had a great time.  One item of note, we saw the world’s most expensive production car outside the hotel.

a Maybach at the 999 Royal Suites

Day 18 – Mike asked me to join him for lunch on Saturday.  On the way down to meet him, I passed a ballot box – the apartment complex is having an election.

The ballot box

The banner announcing the election

We head to an Algerian coffee shop in the center of Luohu.  Both of us are in the mood for something other than Chinese food.  The place has several things that rare in China – a separate smoking area and SILENCE.  The Chinese, especially the Cantonese, are not quiet people.  Going to a typical food court on a Saturday is like enjoying lunch next to a jet engine.  You get used to it (by slowly going deaf), but it is a shock for first-timers used to the USA where typically people don’t shout in restaurants.  We had business to discuss, so it was a good choice.

lunch at an Algerian coffee house - seperate smoking area for the hookahs (yes, really)

Evidently Algerians eat their gyros with french fries - a North African Primanti

Shenzhen skyline - the bronze building (two towers of the same structure) has been tied up in a corruption scandal for years and has never been finished.

That night we head to Coco Park area for Brazilian barbecue and to later join friends at Club Viva.  I love churrascaria and this one was acceptable.  The ones in China just fail on the salad bars, which is a big part of the appeal for me in the States.  However there were two items of note:  camel meat and beer urns.

Roasted camel meat - they have camels in Brazil? Very rubbery and fatty - not something I will seek out again.

The urn of beer is one of the greatest ideas of all-time. An idea America needs to adopt. And Tiger Beer from Singapore no less - my favorite!

Day 19 – despite being Sunday, we go to the office to work most of the day.  Not much of note, but a few photos nonetheless.

An accidental photo of the apartments across from our office reflected in a puddle. These are very working class apartment blocks and are fugly. Note the slapdash hand poured concrete sidewalk.

This is what I was try to take a photo of. This flower graffitti appeared today, next to the trash bin no less.

Fruit and sugar cane for sale on the street. In order to eat sugar cane, you have to hack it to length and peel it. Our sidewalk is usually covered with foot-long strips of sugar can husk.

The day ended with another wonderful dinner by Mike’s wife and the maid.  Simply magic from such a small kitchen.

Dinner at Mike's

The chefs - Anita Tang-Bellamy and the housekeeper

Day 20 – I woke to ghastly pollution.  At first it appeared a lovely misty morning, but that soon turned into choking smog that persisted all week.  That said, it was a great and productive day at the Assembly Center.  The culinary highlight was a fabulous meal at a very upscale restaurant near the factory.  The place was part of a large apartment development with Spanish style architecture, a welcome departure from the typical Chinese apartments.

the mountains are obscured by smog

This is a temple, so I am told. It is a huge sprawling walled compound like a miniature Forbidden City. I hope to visit before I leave. Note the smog.

That's Di Wang Da Sha, the tallest building in Shenzhen through the smog.

A sign for Mission Hills golf course - supposedly a great course, but hard to imagine playing in this pollution.

they literally tear down mountains here

There is an army base across from our industrial park, complete with vintage jet fighter, tank and rocket on display.

A beautiful apartment complex, with a Spanish feel, with many good shops and restaurants.

Notice the planters in the road and the brick streets.

A sublime dish of squash and mushrooms.

Savory meat buns.

Sweet egg custard dumpling - this is hot and delicious.

Sweet pumpkin and taro soup.

Day 21 – Pollution continues and is even worse.  Back early to the Assembly Center to start working on the line.  We have a big rush order of a complex assembly, around 90 parts in the BOM, and an agonizing wiring step that takes around 8-9 minutes.  No way to automate it, it must be done by hand.

First thing is to head off to B&Q to buy some decent tools to cut down on assembly time as much as possible.  For the February order I will get electrical and air tools to speed things up and allow for more people at the wiring operation, but today it is just decent hand tools.  By upgrading the tools and teaching some Drum-Buffer-Rope practices, we complete the order 5 days ahead of schedule.

B&Q is like the European Home Depot.

Because land is so expensive, even a big box has to be multi-storied. These escalators are wide and flat to allow for carts, and they make them a sale point by lining them with bins. We picked out some containers on the way from one floor to the next.

How soon until this trend of patterned appliances and cabinets takes off in the States (the refrigerator is on the left)? My guess is no time soon.

Lunch was at a North West style restaurant.

I am sad this picture did not turn out - these are some of the best preserved vegetables I've ever eaten - vinegared and salted cucumbers and long beans.

Lamb bones - you suck the marrow out with a straw.

The soybeans in the back were particularly good.

One of the Little Sheep restaurants I mentioned previously - something creepy about it.

The Source of Cherry?!

Day 22 – Another day at the Assembly Center.  A good day with more smog.  Ho hum.  The highlight though was dinner with my old friend, my lao pengyou, Sabrina.  She was Mike’s first employee 9 years ago and we have become close friends over the years.  We always go for dumplings when I am in China.  She is a wonderful project manager, a very tough lady who doesn’t take any crap from suppliers.

My dear lao pengyou, Sabrina, who wouldn't hold still for a photo.

Roast pigeon - from lunch actually, but fun nonetheless. You don't eat the heads - they're just for show.

Dumplings with Sabrina.

Wonderful sweet & sour fish with Sabrina.

The fan in the bathroom was installed upside down. You see a lot of this kind of laziness here. I once saw the grill of a DongFeng (East Wind) truck installed upside down.

Day 23 – Another day at the factory, including lunch at the cafeteria.  This time we invited members of the production staff and they played “gross out the foreigner” with the lunch order.  Good natured fun and I am used to it.  I’ve never yet backed down.  Except for the waterbugs a few years ago, but I was already recovering from food poisoning.  Oh and did I mention the pollution *cough*?

Pollution is ghastly - compare with the picture above.

So far so good - a wonderful dish of tofu and pork - the reason most people in the West don't like tofu is because they've never had properly prepared tofu.

The fish was tasty but loaded with bones - what is so hard about boning a fish?

We start to go off the rails. Pig liver soup - with valves!

Now this was just plain vile. Pig's large intestines with sweet peppers. I ate two pieces to satisfy the hosts, but this will not be on the menu again.

ahhh...hmmm

Every cafeteria needs a puppy.

This is a beer poster in our cafeteria - a work dining hall that serves beer for breakfast, lunch and dinner. Why can we not have this in America?

Our industrial park's cafeteria.

Icky looking sweet pastries - I'll pass.

Basketball court in front of dormitory.

The outdoor pool tables (basketball court to the left, convenience store and cafeteria on right).

Another erosion control method is to pour concrete all over the hillside - really looks nice with the pollution patina.

Chinese construction site in the back corner of our park.

Our building.

Nice landscaping jarringly accented with fake plastic trees and shrubs in unnatural colors. They light up at night for extra class.

A plastic Japanese maple - why?

Pollution turns the leaves gray with soot and dust.

The industrial park gate.

I love the dragon turtles.

Tearing down mountains yields a lot of stone - EVERYTHING is polished stone.

We leave the plant close to 9 PM and the smog has rolled in.

We join Mike at the office and walk home for a late dinner.  This involves Mike’s preferred method of crossing the street – sprinting across 8 lanes of traffic instead of the “long way” using the pedestrian bridge.  Chinese pedestrians have no concept of jay walking.  The only thing more dangerous than the air in China is the traffic.

A late, lite meal at Mike's.

Day 24 – We head out in the morning to pick up a prospective client in Futian at the Marco Polo.  Dinner involves a trip out to Shekou for dinner at Tasca, a fantastic authentic Spanish tapas bar.  Spanish food is the only thing I like better than Asian cuisines.

Futian skyline around Coco Park

Futian skyline around Coco Park - note the cranes raising another skyscraper.

Futian skyline around Coco Park

Futian skyline around Coco Park - the handsome buildings in the foreground house the new McCawley's, a Nepalese restaurant, a Chinese-military-themed nightclub that is hugely popular with the locals. The Brazilian barbecue and Club Viva are around back.

Coco Park

TAPAS!

Paella!

After dinner we walk over to Sea World, an outdoor mall surrounding an old cruise ship.  This was the ship where Deng Xiao Ping signed the papers to create the Shenzhen Special Economic Zone, which was sort of the real starting gun for the reemergence of China.  They’ve since filled in the harbor, completely surrounding the ship.  The place is now a “Little Foreign Town” catering to expats.  My camera did not work with the lighting, so no pictures.  I am sure you are heartbroken.  We went to the original McCawley’s for a drink and then headed home.

Day 25 – It’s a glorious Saturday.  The pollution is gone and it is deliciously warm but not hot.   Mike’s in the mood for pizza and his wife and daughter want to go shopping.  The car drops us off in the heart of Luohu, in the shadow of the “Empire State Building” of Shenzhen, Di Wang Da Sha.  It is one of the best looking skyscrapers in the world, IMAO.

This photo does not do it justice. The building has twin spires and from this angle, you can only see the one. It is perfectly symetrical, so use you imagination.

Scroll back up for the pollution shot of this building from a distance.  If China adopts a better energy source – perhaps modern nuclear as in France and Japan – this a pretty attractive city.  The clear days that you do get remind you of how awful the pollution really is.

Papa John’s is the choice for today, and like many US chains in China, they’ve gone upscale and adapted to local tastes.  The dining area is an alcove of sorts, shaded with big comfortable chairs.  Kind of like eating pizza on you covered patio at home.  The recipe for the dough was substantially different than in the States, and while it was satisfying, it is no NYPD.  Looking out from our alcove a gleaming new Gucci store dominates.  A Mercedes festooned with wedding decorations pulls in to park.  To the left is a brand new Hyatt and to the right the Huaan Conifer Hotel, a Chinese hotel that is by far the nicest place I’ve ever stayed in Asia.  I spent 3 weeks there once and it is decadent.  Next door to the Papa John’s is the most badass fast food restaurant on the planet.

Papa John's local menu.

Gucci

Just married - the Chinese have embraced many trappings and traditions of Western weddings, including white gowns and bouquets of flowers. It is also common to have two ceremonies, one Western (white color scheme) and one traditional Chinese (red color scheme) in full costume.

The Huaan Hotel - this photo is a pretty good summary of Shenzhen.

The new Hyatt.

Chinese chain of healthy fast food restaurants featuring steamed food - and Bruce Lee. Told you it was badass.

After lunch we go to the Dongmen (“East Gate”) Road shopping area, which is a sprawling warren of narrow streets selling every consumer good under the sun.  It was a mob scene.  And lots of fun to see that many people out having a good time.  We buy some movies and the ladies get squid-on-a-stick (they didn’t ask me if I wanted any, *sniff*) and take it easy instead of going out on the town.

Dongmen shopping street

Day 26 – Another beautiful day.  I go across the border into Hong Kong with a co-worker, just into the New Territories, not the famous city center.  We are going shopping for American style dill pickles (yes, really) for Mike, mainly an excuse to get out of Shenzhen and do something different.  We cross the border at Luohu, and see something across the fence in Hong Kong I have never seen in Shenzhen – a grave yard.

Hong Kong graveyard on the hillside facing Shenzhen. Little mausoleums tucked into the hillside.

Today also saw my first trips on the Hong Kong MRT and the Shenzhen subway system.  So now I have an Octopus card for Hong Kong (which can be used to buy all sorts of things, not just riding the MRT, very cool) and a Shenzhen subway pass.  I rock.

Hong Kong MRT

A small town in the Hong Kong New Territories

First we went to a Chinese “wet market” selling an amazing array of fresh ingredients.  The smells were powerful and it is not for the faint of heart.  I thought it was awesome.

Know your butcher.

Really fresh fish.

Now THAT'S a cutting board!

Live crabs and shrimp and oysters, oh my!

Chinese sausages - these are awesome - especially the blood sausage on the left.

Vegetable vendor.

Tofu vendor.

Dried sea food vendor - that's dried squid - yummy. No, really. It's yummy.

Upstairs they had a food court.  As I mentioned above, these places are LOUD, but I feel right at home.  This dynamic, barely controlled chaos, coupled with incredible food, is what attracted me to Asia in the first place.  We have two 600 ml Skol beers and noodle soup.

Noodle soup with fish balls and crispy fried fish skin. Roasted garlic as the final addition is served in the spoon so it doesn't get soggy.

Hong Kong food court.

Hong Kong food vendor.

After lunch we try a number of Western style grocery stores looking for the pickles.  They are located in malls that are part of the MRT stops.  Very sensible.  Not sure which is the chicken or the egg, but it works well.  The grocery stores are 100 times better than when I was last here, but they are still thinly stocked compared to your average Kroger and are positively claustrophobic.  I can barely walk down the aisles without turning sideways.  After an hour or so of looking, no pickles.  We buy Cadbury’s chocolate for the office instead.  Couple things caught my eye.

Imported beer is big in China - a real sign of wealth and an acknowledgement the superiority of European brands.

You can buy whiskey and fine American wines in the grocery store!

Defeated we cross back into Shenzhen at the new Futian crossing, a far more impressive building than the old Luohu crossing.  Reminds me of an airport.  In this place the Shenzhen River is much wider.

The Shenzhen River, facing east.

The Shenzhen river, facing west.

We take the Shenzhen subway to meet Mike for dinner.  Very clean and efficient.  Instead of a poster in the car showing the map of the lines, they have an electronic display that tracks the progress of the train.  Very cool.  We head to a Japanese restaurant that has the craziest deal I’ve ever seen.  All the sushi and tepanyaki you can eat and all you can drink – juice, soda, tea, beer, wine, sake, doesn’t matter – for 150 RMB.  That’s $22.  I have no idea how they stay in business.  By my count, I ate $100 worth of food alone, not even counting the beer.  There is no restrictions – you can order anything off the menu.  The absolute highlight was kobe beef sashimi – raw slices of rice paper thin beef.  I ate at least 3 orders, each 45 RMB.  It was fantastic.  It is now my official favorite thing to eat in the whole world.  Note to the FDA – it is far easier to control the diet and health of a cow than a wild fish swimming in the ocean.  If sushi is legal in the USA, why not raw beef?

This restaurant is in the basement of one of the big malls in the area, CITIC Plaza.  It is a bit of a maze, so we went round and around looking for it, including an elevator with the follow sign:

This Elevator Circulates Time - new this year from Dongguan Elevator Factory #1, the Time Warp Elevator!!

Last item for today’s blog, the Japanese restaurant had cool bronze dragons on the table.  I had seen these before in Korean restaurants, but had forgotten about them.  I need to get some of these for my home in the USA.

Can you guess what this is?

very cool

That’s all for now…

View from the apartment window.

view facing Hong Kong New Territories

Note the mosiacs in the pool. It is amazing what you can accomplish with a massive supply of inexpensive labor.

And though it feels cold here because of the damp, it is about 62 F.  Salem, VA was in single digits in comparison.  The company apartment is decorated with Chinese art (Mike has good taste).  We even have a life sized terracotta warrior.

Rather imposing

These are iron door pulls that would have been mounted on a pair of double doors (love the screws)

A window - the screen is hinged internally to swing inward when mounted

Our apartment complex, taken Day 5 before the rain started. The pool with the mosaics is up the hill to the left.

Entrance to the apartment complex in the rain

The walk to the office takes maybe 5-6 minutes.  The rain was coming pretty hard and the wind overwhelmed the umbrella.  One thing you notice about side streets like ours is how poorly they are sloped to drain the water.  Makes for enormous puddles.

Stopped at my snack shop for dumplings and a tea egg.  I make tea eggs at home, and they are just that – eggs boiled in tea, dark soy sauce and spiced with star anise.  The flavor is very subtle – it is 90% a regular hard boiled egg, but the last 10% makes all the difference.

Breakfast (10 dumplings and 1 tea egg = 4 RMB = $0.60)

Worked the morning in the office, and then had lunch at the restaurant around the corner.  It has a few dishes that are wonderful, but is certainly not fine dining.  The highlights:

This is the best use for broccoli - it goes fast - garlic and what I think is chicken broth. A savory delight. In the background are fried pork ribs. Awesome.

This is the best use for squid - crispy golden brown and delicious!

Back to work until late in afternoon, then I head to Futian district to take an old friend from Taiwan to dinner at an Italian restaurant.  We were the only ones there, so service was exceptional, as was the food, as was the wine, AS WAS THE PRICE.  Dinner for two cost 7 times as much as dinner on the street the night before!  Luckily she is bringing some of her USA friends to PassageMaker, it was a legit business dinner, but man it is easy to get spoiled by the cheap food over here.  I figured we all know what Italian food looks like, so I’ll spare you photos of gnocchi and tiramisu.

Day 7 – A clear day, rain has stopped.  It’s knocked the smog out of the air, so a bright blue morning.

Clear blue skies

The streets around our office are narrow and crowded

Off early to our Assembly Center in Buji.  I’m working on continuous improvement initiatives there as part of our new ISO 9000:2008 certification, something we achieved just last month.  My background is in manufacturing, and since we are gearing up for what we think will be a very strong 2010, Mike asked me to come over and assist with introducing the alphabet soup of kaizen related initiatives – 5S, JIT, OJT, etc.  Meet and greet the staff, which is dominated by women at the manager level.  Only one man on the senior staff.  You are seeing more of this in China, but my impression is PassageMaker is ahead of the curve here.  On to lunch, which is fabulous as usual.

An even better use for squid - a superior version of the dish I had yesterday

The best use for duck, although I hate the way they cut through the bones. Makes eating very difficult and slightly dangerous. And yes, that's the head.

I love these little fish

Man they do vegetables well

You have to get used to your food staring at you

On the way out, we passed the fish tanks that hold the seafood fresh and alive until it’s time to cook it.  Everything in China is prepared fresh.

If I'd known they had had geoduck I would have ordered it. Never had it before.

Duck fish

Later that afternoon we headed back to the office to pick up Julien Roger of China Quality Focus, our sister company.  Mike, Julien and I flew to Shanghai for the Global Sources trade show, a trip that wasn’t scheduled for me when I came over, but I’m glad I went.  The show went well and I’ve never really been to downtown Shanghai before, just the industrial area around the old Hongqiao airport.  We flew into the new Pudong airport and I am convinced the planning went something like this – “To demonstrate the greatness of the People’s Republic of China, we will build the longest airport in the world!”.  We landed late at the last gate and walked for 10 minutes in a straight line down the terminal until we got to the baggage claim area.  This is a seriously long building.  And thoughtfully they included no people movers like the trams at the Detroit airport.  Considering the late hour and the lack of other arrivals, you’d think they could’ve found a found a gate closer to the exit.

Heading to the hotel, Ibis, a chain of affordable hotels owned by Novotel, a French company, what struck me about Pudong at night were the vast highways.  Six to eight lane interstate grade roads as compared to the cramped streets typical of most Chinese cities.  Pudong was farmland just a few years ago, and it definitely has a planned feel.

Although they fed us on the plane (a 2 hour flight with meal service – haven’t seen that in the States in decades), Mike and I were still hungry, so we found an American bar, Malone’s across the street and had a very good hamburger while listening to a GREAT Filipino cover band.  Every bar and hotel in China has a Filipino band, all playing English cover tunes, even when the clientele is Chinese.  And nearly all of them suck.  This was an astounding exception.  They were tight and the covers were quite good, including good hard rock and heavy metal.  The singer had some serious pipes.

Back at the hotel, I noticed the bathroom is a pre-fabricated assembly.  Smart idea for a chain.  It was one of the nicer bathrooms I’ve had in China.

Notice how all the parts are manufactured. I'm willing to bet Ibis just plops this into each room as a completed assembly. The big button on the way flushes the toliet, which is a European wall mounted unit.

Day 8 – After the best night’s sleep so far, up early to get to the show and set up the booth.  On the way to the convention center, I saw this:

Just bizarre

They switched us at the last minute to give us a corner booth, which meant we had to cut up the posters to make them fit.  I think the booth looked pretty good, considering.

Mike Bellamy (L) and Julien Roger (R)

I’ve been to a fair number of trade shows over the years.  Heavy truck shows are dull unless you really like trucks and truckers, car shows are fun, and motorcycle rallies are a blast.  But in every case before, I was selling a product.  If the guy’s got a Road King we have something for him, but not if he has a Dyna.  We’re on this model of Peterbilt, but not that one.  But now that I’ve done it, nothing beats selling a service.  EVERYONE doing business in China needs Quality Inspections, Product Testing, Sourcing Feasibility Studies, Vendor Coordination, Intellectual Property Protection, Logistics and Assembly Inspection & Packaging.  The industry doesn’t matter, they all needed at least one of our services.  This was a gift and clothing fair, but it is the same at every show.  It’s like we are selling beer at a NASCAR race.  We got business cards from USA, France, Australia, Saudi Arabia, Venezuela, Israel, Nigeria, Iran, South Africa, New Zealand, etc.

Mike is a featured speaker at every Global Sources trade show (including Dubai, Hong Kong, Mumbai and South Africa this year), and he gave a two-part presentation spread over the first two days of the show.  He did a great job and it was extremely well received by the standing room only audience.  Rather than a canned sales pitch, he tells it like it is, barely mentioning PassageMaker or China Quality Focus.  The soft sell works and many attendees stopped by the booth afterward to tell us so.  They figure anyone with enough confidence to NOT shove his company down their throats must have it going on.  And they are quite right.  We do.

Mike is a featured speaker

Mike giving his presentation

Julien Roger is also a tremendous salesman and very knowledgeable.  I learned a great deal from watching his methods.  Selling China Quality Focus’s services is easier, as Quality Inspections are very straightforward compared to PassageMaker’s services, but the combined message of the two companies meshes very well.  We often have the same customers.

The convention center is still under construction and gigantic.  As with the airport, the point seems to be making you walk as far as possible to get anywhere.  Despite the impressive size, they apparently forgot about effective HVAC.  It is unseasonably cold and I packed for south China.  Day 1 of the show had no heat at all, which made it a real grind.  Day 2 was a little warmer, but still uncomfortable.  By Day 3 they’d gotten it going to the point it was now actually hot inside.  HVAC needs some work for sure.

They also have very little in the way of food.  The restaurants inside looked just plain bad, serving cold rolls and sandwiches wrapped in plastic like a vending machine.  However, there was a McDonald’s right across from our hall, W2.  It turned out to be the world’s smallest McD’s, about the size of a broom closet, with one little girl selling horrible looking “chicken sandwiches” out of coolers.  I put that in quotes, because they were actually pork.  Menu says chicken, she will say in English it is chicken, the box says chicken, but she insisted in Chinese that they were pork.  We passed and were directed to the other McD’s at W5.

W5 is an international airport runway away from where we were.  In 30 F weather, I was not interested in the walk, but there was nothing else, so walk we did.  Entering W5 was a shock as it was still under construction, freezing cold and reeked of paint fumes.  The McD’s was even colder than the rest of the building.  It was a huge McD’s, brand new and manned by an army of eager young staffers in winter parkas.   McDonald’s can’t heat their own place.  It was also completely deserted.  We were it for customers stoopid enough to walk that far in the cold for genuine simulated food.  Our “food” in hand we sat down to eat our rapidly cooling cheeseburgers (with cucumbers instead of pickles) in 25 F comfort, huffing paint.  Then the staff helpfully turned on the Backstreet Boys at headache inducing volumes to entertain us, because what lao wai doesn’t love the Backstreet Boys?  We’d shout over the music to tell them to turn it down please.  And they would, just a little.  As it was the only food around, we ate there all three days of the convention.  Our experience was exactly the same each time, including the yelling over the music to turn it down.  Note to China:  the progress over the last 30 years has been astounding, but build convention centers with decent places to eat and heaters.

Holy crap this place is big!

Holy crap this place is big!!

Holy crap this place is big!!!

This is the smallest McD's in the world, right across from our exhibit hall.

So why put the real McDonalds as far away as possible?

W5 under construction

Way to plan fellas

The interior of the McD’s was just as bizarre.

Huh?

What is it with women and fruit and vegetables?

This is a joke, right?

The rarest sign in China

With the first day of thee show successfully behind us, we head out into a bitterly cold Shanghai sunset.

Shanghai sunset - the pollution makes it prettier!

For dinner, we are off to meet friends at Shanghai Hooters.  Yes, really.  This turns out to be loads of fun.  Mike, Julien and I meet up with one of our sales reps, Dan Welygan, who worked in our Shenzhen office for about 4 years.  Also in our quintet is a classmate from the University of South Carolina now living in China.  Many, many wings and beer later, I have a new found appreciation for Hooters.  It was a bold decision to open this restaurant, as typical Chinese girls lack the requisite body type required of a Hooters waitress.  And they have to be attractive and be able to speak English.  A pretty small labor pool.  Our waitress was very good, spoke solid English and really new how to work a room.  A very bright young lady, she has a future in sales for sure.

Our waitress Elva

Hard to find the body type in China - the Chinese are blunt about weight and appearance. I am sure every one of them would describe themselves as "fat" and not be the least self-conscious about it.

Day 9 – Second day of the show went as well as the first.  Part two of Mike’s seminar was very well received and many of the attendees have stopped by the booth, several 2-3 times.  After the show, we meet our web developer, a French graphic designer living in Shanghai, at a trendy coffee shop for sandwiches.  This place was in a glittering new mall, still decorated for Christmas.  My cameras does a poor job in low light, so my apologies for the quality of the photos.

Christmas decorations in Shanghai

First of two Ferraris I saw in less than 2 minutes - notice the Christmas lights on the trees.

yep, that's a Christmas tree!

This is what irony looks like. The sign says "The site of the first national congress of the Communist Party of China". This historical marker is in front of a brand new shopping mall and a Ferrari had just driven beneath it. China is not a politically free country, but it ain't communist either.

So far no Chinese food in Shanghai.  After the meeting, off to meet another USC classmate at The Boxing Cat Brewery, the nicest brewpub I’ve ever been to.  As I was once in this business, that is quite a statement.  It was in a 100+ year old home in the old part of Shanghai, beautifully refurbished.  The brewpub was 3 stories, with a bar on the 1st and 3rd floors.  It felt exactly like a British pub, with beer selection and menu to match.  Since we had already eaten we did not order anything, which now that I know the chef was trained at Le Cordon Bleu in Paris, I heartily regret.  I have a feeling it will not be my last trip.  My, how far this country has come in just a few short years.  However, even The Boxing Cat has moments that confound.

Where the heck do you want me to put it? You really don't want to know the answer.

Day 10 – Last day of show, and the pollution is pretty bad today.  Traffic is light, and some exhibitors start packing up almost from the opening bell.  We stayed until nearly the scheduled end at 5:30 PM, though we give up when they start dismantling the booth around us at about 5:10 PM.  Global Sources has been good to us and we thought it the honorable thing to do to stick it out to the end, though honestly the show really ended around noon.  Off to Pudong airport (which is even more gigantic from the outside and has the coolest road system connecting it I’ve ever seen) to catch our flight to Shenzhen.  Our first Chinese meal of the trip is some very good Cantonese cuisine at the airport.

Smog

Always a bad sign when the gates are in triple digits

Cantonese beef noodle soup - Chinese airport food is MUCH better than USA

Shrimp dumplings, they go fast

Mike's 'set menu' meal

Day 11 – Worked all day to get caught up from the show.  Verizon’s data service here stinks, a pale comparison to my old AT&T service (of course, that is reversed in the USA, which is why I switched).  Many emails did not come through to my blackberry.  I also discovered that Verizon is charging me $2/minute to RECEIVE CALLS.  This was one of the specific questions I asked before adding the “China plan” for this trip.  I have already written about how woefully trained their salespeople are, and this takes the cake.  Since the trip began, I have been receiving calls from clients, family and friends – including a call a 3 AM from a client who had missed I was not in USA.  My team in the USA is having words with Verizon about this, but let’s just say, it was a cute phone bill.  China Mobile by comparison, charges nothing to receive an international call.  Heck, their rates to MAKE an international call are less than Verizon.  So, if you want to get in touch with me, send me an email and I’ll give you my China Mobile number.

I join Mike and Adam Supernant for dinner at a local place in Liantang.

Chinese donuts - I like the fried ones, steamed ones not so much. Sweet dishes are not for dessert, but served as part of the meal.

This is essentially braised fat - gross.

It's very common to have fire at the table.

Quite tasty dish of tofu and pork finished on the burner at our table.

After dinner I was invited to join some of our Chinese co-workers at a nightclub.  I was flattered to be invited and went along.  After several hours, I had my first run in on this trip with the dreaded Mao’s Revenge.  I am trying to tell it like it is for those of you who don’t travel overseas, and if this strikes you as TMI, it isn’t.  You need to know what you are in for.

While western style “sitters” are becoming more common, squatters still dominate.  In a sense this is good, as sitters are not as sanitary ( I mean, everyone else is sitting there too).  But when you’re in an emergency situation and you are not used to squatters, this can get dicey fast.  My advice for survival in these situations:

1. Wear sensible shoes with good rubber shoes – I prefer Blundstones.
2. Wear jeans.  Avoid khakis – not the color issue but the way the pockets are cut.  I always keep everything – wallet, keys, passport, phones – in the front pockets of my jeans.
3. This is a very uncommon position for a Westerner.  I have pretty strong calves and thighs, and have learned how to balance, but if you never done it before, try it and hold the position for 2-3 mins.  It takes some getting used to and you don’t want to find out the hard way you can’t do it.  Luckily the squatting position is more conducive to the situation at hand, and so things tend to go quickly.
4. Carrying a small packet of tissues is a good idea.  Toilet paper in a public restroom anywhere in the world is never a given.  Handkerchiefs and socks (single use of course) will do in a crisis.
5. Carry a bottle of prescription Lomotil or the generic.  I always do and there is no OTC medicine that comes close.  It WILL stop the drama.

My evening cut short, off to sleep.  Day 12 is Sunday, market day in Liantang, and Mike and I head to Mian Dian Wang, or “Noodle Snack King”, my favorite fast food chain in the world.  14 line cooks actually making the food by hand.  Total cost of the meal is about 60 RMB, or less than $9.

Noodle Snack King

Knife cut noodles

Seaweed salad, bamboo shoots and bean sprouts

Soup dumplings

Lamb dumplings

That evening, Mike threw a dinner party at his home.  It was great to see old friends and an even better meal.  Simply the best food I’ve ever eaten in China.  Mike’s wife and the maid did all the cooking.

Two women, in this kitchen...

with this equipment and about 2 hours...

made this.

Day 13 – Monday – Last night there was a little too much “medicinal wine”.  Whenever you hear that phrase, run screaming in the other direction.  After such an amazing meal, we needed something basic to calm the acid seas, so off to Subway (yes, really).  A steak and cheese later and all is right with the world.  With some lingering Mao’s, I head to the apartment to work from home.  It was a glorious day, 70 F and clear blue skies with a light breeze.

Our apartment complex

Later Mike asked me over to finish up the leftover ingredients from the dinner party – there was no left over dishes, just raw materials.  This is the modest result.

A light meal - those ladies can really cook!

Two customer visits tomorrow and time at the factory.

All for now…

I am a minor stockholder in a local manufacturing company that celebrated 95 years in business last month.  My family’s involvement goes back almost 50 years, which is quite a statement of longevity in itself, but 95 years is just extraordinary.  Even more impressive is the growth and dynamism of this very old company in the last decade.  Under the vigorous leadership of the “younger generation”, it has more than doubled in size while maintaining stellar profitability and taking on NO debt.  Simply astounding to watch.

This company has been an international player in its core market for decades.  They’ve been selling overseas for longer than I’ve been alive.  While maintaining their core manufacturing in the USA, they were outsourcing before it was cool.  The management has guided the company along this journey by focusing on product innovation, customer service, maintaining profitability and keeping debt to a minimum.

There’s been plenty of bad press about the USA recently – our relative decline in competitiveness, our gruesome debt burden, the decline of the dollar, rumors of a new global currency – and one could be forgiven for thinking the best was behind us and that it was now a Chinese (or Indian or Brazilian or pick your country) world.  Perhaps I am guilty for spreading this sentiment.

While we aren’t going back to 1950 ever again, the USA will remain a major, if not the dominant player for some time to come.  While atrocious government policies have wounded us, in a democracy those can be undone.  Despite our demographic challenges, we are still the 3rd largest population on the planet, and by far the wealthiest of the major economies.  All of our major competitors, including China and India have huge challenges of their own.

From where I sit, what will define the future is creativity, and in that the USA has an astounding advantage.  I meet a great many people from all over the world, but the numbers of inventors from the USA dwarfs what we see from other markets.  The downside is that no one would be crazy enough to start a manufacturing company in Salem, VA today as they did 95 years ago.  Taxes, regulations, cost of materials and labor make it prohibitively expensive, not to mention a gigantic pain.  The corporate buyers demand a world price, which drives manufacturing to China.

I’ve written before that I view my role at PassageMaker as having a moral component – helping to lift some the desperately poor people in China out of poverty, and helping companies around the globe grow and successfully bring their products to market in an intensely competitive world.  If I didn’t believe this, I couldn’t do this job.  It is very easy to blame the outsider for all your problems, but I the truth is always more complicated and usually involves looking in a mirror.

If the crowd in Washington want to keep this country in manufacturing, they won’t do it with protectionism.  They can do it by getting out of the way – in the form of reformed labor laws, rational regulations, and lower taxes – but it is just so much easier to blame the Chinese instead.

And send in your vote on whether Mike should shave his beard!  What’s up with that?!

Happy Thanksgiving to all!

China, the world’s third-largest economy, said it plans new measures to close factories to curb overcapacity and pollution after this year rejecting requests to build industrial projects worth almost 200 billion yuan ($29 billion).The government will target the steel, aluminum, coke, cement, paper and utility industries, Zhu Xingxiang, director of environment evaluation department at the Ministry of Environmental Protection, said today in Beijing.

“This shows China’s confident enough about the momentum of growth to begin addressing structural excess capacity problems,” said David Cohen, an economist with Action Economics in Singapore. “One of the motives will be to improve the profitability of existing companies.”

Must be nice to have economic growth robust enough to want to slow it down.

Anyone who’s traveled in China knows there is substantial over-development.  Gleaming new skyscrapers sit empty and the amount of factory over-capacity is staggering.  Is the PRC a house of cards?  In a sense, yes.  The development over the last 30 years has been hugely successful, but the annual income for the vast majoirty of the people is still not high enough to turn them into consumers in the model of the West.  The consumerism in the coastal mega-cities does not extend very far inland.  It is true they still depend on exports to drive their economy.

The article focuses on the demand side of the equation.  PassageMaker’s focus is on the supply side and the reality is that the manufacturing capability of China is here to stay.  That over-capacity will serve to keep prices low and I don’t see how the “world prices” will be set anywhere else.  I do not see India stepping up to take China’s place.  With the dissolution of so much of the American manufacturing sector, to say nothing of regulations and taxes that make it unattractive to run a factory in the USA, where are you going to make products?  I doubt the current administration in Washington will have a change of heart and encourage the opening of new coal mines, power plants, steel mills, etc.

Is China weaker than it appears?  I would say yes, but that does not mean it is going to implode.  We are all in for a rough ride the next few years, all of our own making, but China has cash and industrial capacity and I personally believe they can weather the storm.  PassageMaker is hedging its bets by proceeding with plans to open another Assembly Center in Mexico, but there are no plans to exit China.

Even if the financial crisis leads to social unrest, the people of China have seen over the last 30 years what they can accomplish.  While there are hundreds of millions of peasants in China, there are also now millions of managers, engineers, businessmen, entrepreneurs, etc., and they are not going to vanish.  PassageMaker is planning for long-term growth and so far I think we’ve chosen wisely.

I’ve never understood the personality cult of Mao in China, not least because Deng Xiao Ping deserves the credit for what China has become since Mao’s death.  It always seemed to me they idolize the wrong person.  I mean 70 million people is more than a rounding error.

So I get it that the Chinese excel at hagiography, but this is just bizarre.  I honestly don’t know what else to say.

I hope Obama’s visit goes well and we can avoid a trade war with China.  Given the amount of American debt they hold, our ties with China are more important than ever.  The world economy is fragile enough.

This is an interesting conundrum.  How do you promote business in China, without seeming to run down your home country?

Here is my [edited] response for what it is worth:

Thank you for your email.  All of us at PassageMaker look forward to working with you.

I appreciate your feedback vis-a-vis patriotism.  I cannot speak for Mike and Brian, as they have both married into China as it were, but I can tell you that I consider [it PassageMaker’s role to help American businesses] remain viable.

I spent most of my life in the US automotive industry, and the corporate buyers began pressuring us in the mid-to-late 1980s to move production, first to Mexico (after 6 trips to check it out, we decided to pass); to eastern Europe (we had a great 12 year relationship with an excellent supplier in Plzen, Czech Republic); to the Asian Tigers (we started sourcing in Taiwan in 1991 and I lived in Singapore in 1994); and now to China.  Left to ourselves, we likely never would have moved anything anywhere.

PassageMaker recognizes that outsourcing is a sensitive subject with many clients, but the sad reality is that buyers expect a “world price”.  Having worked in manufacturing for over 20 years, starting with my first job in a machine shop at 14, I know that sometimes American companies can deliver that price.  I know my company in Virginia does just that.  But many companies, especially start-ups, cannot.  They don’t have the tooling, equipment or expertise in place to meet the expectations of the market.

China has a role to play, and that is where PassageMaker comes in.  Our goal is to help foreign companies be successful in their dealings with China.  If by helping an American company successfully manage their China supply chain, I can make the USA operation more profitable, everyone wins.

While the economic and political environment in the USA are causes for great concern, I agree with your assessment of America [as the exceptional and indispensable 'city on a hill' with its best days ahead of it].  It is why I live here.

PassageMaker intends to be a truly global company, with Assembly Centers in every major market.  PassageMaker-Mexico will likely be next, but PassageMaker-USA is also on the list.  We already have sales presence in USA, EU, Mexico and Brazil [with Asia, India and Africa on their way].  We want to be able to offer a comprehensive supply chain solution, including the option to assemble or complete manufacturing in America, regardless of where the core components are made.

I appreciate your concern and would be happy to discuss this further.  Please feel free to call me on my cell.

Whether or not this prospective client takes me seriously has yet to be seen, but my email was sincere.  I take no joy in the apparent slow death of American manufacturing, but I also do not think I am the one doing the killing.