Entrepreneur – ???

Beijing Diary Issue X 23 April 2006Entrepreneur – ???This was a week when I started to mix more with other entrepreneurs, interviewed candidates and experienced the
Inner Mongolian deserts attempting to suffocate Beijng in a blanket of fine sand.

The Chinese word for entrepreneur is???(qi ye jia), the first two words are the same as business, but interestingly with the addition of the word 'jia' or 'home' it becomes a pronoun for all those seeking to prove that they have the next hot idea – a linguistic clue perhaps that all Chinese have business on their mind and in their homes. On Wednesday I went to the China Entepreneurs Forum at which 90 plus hopefuls listened to Fritz Demopoulos[1] and NickYang[2] speak.The mix of people in the room interested me, an equal number of local Chinese, expatriates and those who should profit the most, the returning Chinese."This forum would not have been possible even two years ago," said the founder Eric Smidth, "because the market in China has changed so rapidly to embrace entrepreneurship." Now as individual cities and even city districts compete to get new companies to register with their commercial department, the costs and improving transparency have made entrepreneurship viable. In Chaoyang district the EASWEST WOFE will cost US$4,000 and take some 3 months to process. Still a far cry from the 7 day and US$600 fees ofSingapore or near instant registration in Hong Kong, but for entrepreneurs, the footsoldiers of a country's economic army, it is possible to enter the fray.

One of the comments that Nick made was that success = effort/expectation[3] and I found this a useful way to evaluate my first 3 months in Beijing. To date I have rented an office, set up an IT network, undertaken two client projects, started the translation of the website to Chinese, attended multiple networking events and interviewed 8 candidates. I feel that my successes have been few for the efforts. Above all, I haven’t won a client in
China yet – and this is the acid test of my entpreneurial vision. In low moments I counsel myself to re-evaluate my expectations – but have still institigated the ‘no client – no couch’ policy which keeps me at the desk or in my bed, with nothing soft inbetween. The difficulty with being an entrepreneur is that by definition, one has to start things and believe that they will be a success. Another word from Nick rang true "If you follow the pack, you are not an entrepreneur. If you run counter to popular opinion and are right you are a visionary. If you are proven wrong then you are an idiot."Hoping to be proven right in my expectations after reading the candidate questionnaires Nicole had sent out, I engaged in the time intensive task of interviewing this week. I found the quality of English staggering – both in the written replies to my 4 page questionnaire, but also in the articulation of concepts and expression of a desire to be in a company where the candidate can learn and grow. Each and every person, graduating or already in work, expressed a need to work in a company that would teach them new skills, and those who wanted to leave present employers would do so not only for the money, which the cynic in me didn't believe entirely, but because they felt they were not growing. 26 year olds who had studied Master's degrees in the UK were asking for RMB5-6,000 (US$625-750)[4] The decision that I have to take now is which is the right person to hire first, a decision between a Beijing university graduate from Guandong who studied in Leeds or a Beijing women who studied a Masters in Surrey.  In amongst the candidates were some expatriates, often with little Mandarin, expectating salaries three times that of Chinese graduates – I couldn’t help but see the parallels with the message Hu Jintao was telling the American press while in Seattle, it is not that the Western economies are uncompetitive in absolute terms, they are just uncompetitive in relative terms to the Chinese costs and hunger for development.To see how a young Chinese business is developing, and with a view to some Internet tools that we need, I went to visit my friend Guosheng Qi[5] and his company, Gridsum[6]. A group of graduates from Tsinghua
University under the considered guidance of Qi, they are offering Internet consulting, search engine optimisation and internet development. I am not an expert in development, but in the tidy office on the 6^th floor of a grey, but buzzing, building I think I saw the engines of China’s present growth. Qi showed me how they could use an English language crawler to download an entire site and extract key text, while anonymously sitting in Haidian district in north east Beijing. Apparently English language Internet searching yields 3 times the content that Chinese language searches do, because English is more precise, with Chinese sentences having potentially several meanings, depending upon context. Ironically the complexity of English makes it compelling and essential for the Chinese to learn for communication, commerce and even as the source code behind their internet. 

The source of the blanket of sand over Beijing this week was Inner Mongolia, one of 11 such storms to hit China this year. On Sunday alone, the big winds from the northern province brought 10 tons of sand per square kilometre[7], a small fraction from the 1.74m square kilometres of desertified land in the country, accounting for 18% of China’s land area. At Jian Wai SOHO, painstakingly architected in fabulously impractical white, an army of cleaners was dispatched to sweep and scrub, and I saw one woman tasked with uncovering the hundreds of white marble pebbles that lie at the base of the each tree within the SOHO plantation, armed with a washing up brush. It is a serious issue for
China that the capital city is essentially being encroached upon by a large and irrestible desert. There are some 838 days left to the Olympics, and the herculean task of holding back nature to allow preparations must surely be an opportunity for an entrepreneur with vision, assuming that with all this sand in the air, they can see clearly.

---

[1] Currently running travel site www.qunar.com, formerly CEO of Shawei.com, a sports internet company. After securing investment from Intel, Softbank and IDG, Shawei was profitably acquired by Tom.com. [2] Founder of Nasdaq listed mobile content portal www.kongzhong.com started with US$500,000 in capital raised from selling their Internet portal, Chinaren, to
SOHO

[3] Attributed to an American academic

Sloan
School

[4] Taxi drivers in
Beijing earn RMB3000 per month.

[5] Second from the left

[6] See their new logo as work in progress – an indication of the emphasis being put on marketing

[7] Source: china daily 21 April 2006 page 3

“Cash for coverage”

Beijing Diaries. Vol. II. Issue. IX (16^th April 2006) Easter Sunday 

“Cash for coverage”

This was a week when the largely academic and logistical challenges of starting EASTWEST in China became superceded by practical issues of sifting through resumes, the moral dilemma of ‘cash for coverage’ and the realization that even some simple tasks are open to misinterpretation.  In response to our 4 page questionnaire that I use to filter job seekers, Nicole and I received some 15 replies, not all as expected. Raymond, a 35 year old Vice General Manager apparently at a local PR firm replied: ‘hi Nicole,i hate waste too much time to answer those questiones.i am not a usual guy..here is
beijing china,the clients are wating special company and special man…pls just schedule a time to meet next week if you want to know real market or forget it. good luck, raymond’  Good luck indeed Raymond. This terse response was quite a contrast to the many extremely polite and considered answers, not all of which were spell checked, as one candidate elegantly named ‘Snow’ replied to the question, ‘what do you understand a PR firm does’ as “Go Pubic” for the clients.” Of course it’s not fair to poke fun as I wonder if Haier or Lenovo ask American or British candidates to answer questionnaires in Mandarin.   My goal is to find a recent graduate who can help me to build the network of contacts I need. Last year some 3,380,000 young people poured out of the 2,210 higher education institutes[1]. Apparently 25% didn’t find jobs and so someone must be available. What has impressed me from the questionnaires has been the keen desire of all the applicants to learn, and the honesty with which they declare their ignorance, but take adventurous steps defining how we can build the business. Public Relations is seen as a new and emerging profession, and while Raymond’s delivery may have not been so diplomatic he identified the real opportunities and challenges that I face.  In
China there is an entirely different approach to PR. While in Europe and America, and in Singapore, there is a tacit agreement on the separation between advertising and editorial, in China this line doesn’t exist. In other words, agencies pay journalists a ‘transport allowance’ to get coverage. I have dealt with this previously, but always through our partner agencies. This week I had a call with a potential client selling properties in Mongolia who want coverage in Beijing and Shanghai newspapers. Delighted at the prospect of a client, I am also hamstrung by my inability to call the journalists myself, and by a realisation that I will have to navigate the ‘allowance’ negotiations.   The ‘allowance’ ranges from RMB100 (US$12.5) to RMB1000 (US$125) depending upon the merit of the news release. In a way I can see the logic of this arrangement – the media own the channel through which one distributes information, just like a middleman takes a commission when selling fruit or furniture. Why should they pay for journalists, layout, printing and postage to help promote another company’s products? It is a moral dilemma for all agencies in that as long as ‘cash for coverage’ exists the profession will struggle with it’s reputation as paymasters not perception managers; the poor brethren of advertising agencies. For me it presents practical issues of how much, how to disburse but also what precedent it sets for EASTWEST as a new arrival.Nicole, arriving on Monday for one month to help at the office, couldn’t empathise with my dilemma and assumed that ‘cash for coverage’ was how PR works, one of a few areas of miscommunication. Nicole is my former language coach from when I was in the Beijing Culture Language University in 2004, and I asked her to come and work with me as I trust her implicitly. On Wednesday a courier company made a delivery and I asked Nicole to take a note of the courier company’ phone number and she called them requesting pricing information. On Thursday morning I asked her to send a document and the 12 photos for the company registration to Ken Lee by courier. At the close of the day I asked her why the document was still on the desk. “What’s a courier?” she sweetly enquired. Slightly incredulous, I recounted the previous day’s activities. “Oh – I wasn’t sure if you meant this letter had to go to Korea, or it had something to do with my career, and tell me, what is a courier?” I know and trust Nicole – I spent 3 months with her teaching me Chinese – and here we were sitting no more than 2 feet away from one another with the simplest of tasks completely misunderstood. Nicole promptly picked up the phone and had a man take the document and deliver it. That evening Nicole went to Ikea to source more office furniture – seen here looking at career enhancing shelves made in Korea that could be delivered by courier.   
Today is Easter Sunday, and I have failed to celebrate. Lent’s forty days have passed, the fifty days of the Easter Season has begun. The last forty days have meant going without a number of things, including heating, and I am praying that the Easter season, although of course not recognized in secular China, will bring me some salvation in the form of a bright, bi-lingual graduate who understands the difference between a person, a vocation and a country, and who is good at negotiating transport allowances.  

Man zou                       

---

[1] http://www.moe.edu.cn/english/index.htm 

‘Commuter’

 

Beijing Diaries. Vol. II. Issue. VIII (9^nd April 2006) 

 

‘Commuter’

 

 

This week I made progress in transitioning the Jianwai soho unit into an office, started the recruitment drive and felt what it is like to commute between cities, a fatiguing experience destined to be the fate of a growing number of mainland Chinese.

 

 

On Tuesday Guosheng Qi, a serious young IT graduate of Tsinghua university, came in a cream linen suit followed by sweating minions who delivered the hand assembled computer and HP printer.  Qi, whose email address alludes to his sense of optimism at jubilantocean@yahoo.com, told me of his desire to work with international clients as foreigners ‘understand that software can add to the business process and not be a cost that must be avoided.’ Qi sees most Chinese firms not paying for software but rather installing it without an understanding of what it can accomplish. Ironically when I had asked Qi about purchasing MS Office he told me that this was not the custom in
China, where some 92% of all software is pirated.[1] Qi would answer emails at all times of day and night, seemingly working around the clock, keeping pace with the 24 construction of
Beijing.

 

There is a sense in
Beijing that to stop working is to be left behind. Jian Wai Building 10 is an island of finished construction surrounded by a road receiving rails, a power sub-station being deconstructed, two acres of settling soil awaiting the piling cranes and the white lines being painted in the car park of the new International Trade Centre building. In the office across from mine the young entrepreneurs at the glamorously named XianTu Design Centre kip on the couches, their aging Xerox machines spitting out copies and RMB while they slumber.

 

This prevailing sense that ‘now is the time’ keeps me driving forward, and the next part of the plan is to find people – considered to be the hardest part of setting up in China. I placed an English language advert on the Shui Mu Qinghua[2] bulletin board at 10.00 on Monday morning. Eden, who kindly did this for me, told me “be prepared for the rain.” By 16.00 I had 35 applications and 4 phone calls from people with email addresses including ‘rosiedream’, ‘hope’, and my favourite, ‘maximisechina.’ Within 24 hours I had 65 applications. A complete mix of people applied, some considering their experience as an organizer in the Youth Communist Party to be critical, one their computer skills and one lad named Jack, just felt he should be given a chance. Overall the bi-lingual written skills are high, and I look forward to discovering who actually wrote their resumes themselves and who paid English competent friends for the favour.

I headed back to Singapore mid-week on CA 969, one of an average 932[3] flights leaving
Beijing airport daily. A herd of country people were being rounded up for flight 1991 to
Vancouver, and I thought the flight number was synonymous with the year that these folks were emerging from. One 20 hour flight to ‘Hongcouver[4]’ would carry them through 20 years like a scene in ‘Back to the Future.’ The plane to
Singapore was full of ‘commuters’ like me, mostly asleep before the delayed take off. China Air planes don’t have in-flight entertainment, save the distance screened movie, and flight 969 ressembled a flying dormitory for the
China hopefuls.

 

The hope for
Singapore, now that it has arrived in the future, is to become a great sporting nation. The Rugby Sevens were being played this weekend here, and I was fortunate enough to be invited by my friend Tim to hear three rugby legends talk – John Eales, Willie John McBride and Martin Johnson. An audience of nearly 1000 expatriates heard these men talk of their exploits, and bid some S$140,000 for memorabilia, money that would go to replenish the coffers of the Singapore Rugby Union after executive Steven Lee absconded with S$300,000 of club funds last year.

 

John Eales former Australian international said, “Leadership requires humility, composure,…,having faith in the plan, the people, and the opportunity.”

 

As I prepare to commute back to
Beijing tonight, to start interviewing people who will become EASTWEST China, I continue to have faith in the plan, the Chinese and the opportunity that lies in middle Kingdom. It is the inescapability of commuting that requires humility, and efforts not to display fatigue that require composure.

 

In response my end rejoinder of Man Zou, long time friend and IT support guru, Jin Chong commented that “Man Zou” is used mostly when you meet people whom are going back, a smaller version of “Bon voyage”, in most cases, conversational. As I commute it seems as though Man Zou is what Jin should be saying to me.  

Although pretending his Mandarin is rusty, Jin suggested I say “Zhen Zhong Zaijian” 珍重再见Translated as “Very seriously I wish you well for the future” – or less seriously as “take care”。Interestingly enough the alternative spelling of Zhong is Jin’s surname Chong – some people will do anything to get into the Diaries it seems. After all the commuting I think I still rather like the idea of man zou慢走, walk slowly. 

---

[1] Source: Trade Secret Theft. Computer World. Nov. 15 2004. 92% of the software installed on computers is pirated, according to a recent study by IDC and the Business Software Alliance.

[2] One of Beijing’s leading universities

[3] Source: http://www.bcia.com.cn/en/investor_data_1_filelist.html

[4] So called because of the number of Hong Kong people living in
Vancouver

‘Blooming Beijing’

Beijing Diaries. Vol. II. Issue. VII (2^nd April 2006) 

‘Blooming
Beijing’ 

‘Springtime is seen as a season, growth, renewal and new life. But it is also a time when chronic diseases break out’[1]

This has been an excellent week, one in which I secured first ever coverage for clients in mainstream English language publications in China, gave EASTWEST it’s Chinese christening and avoided all Spring related illnesses.

I started the early part of the week in Shanghai working with our local partners at a press briefing for our clients the Asia Public Real Estate Association[2]. Enveloped in the 5 star luxury of the 4 Seasons hotel it was easy to believe one was in New York, but when I went back to the 168 Budget motel past the rows of pink-lit massage parlours masquarading as hair salons, and was accosted by children and their begging mothers outside expatriate watering holes, it was clear that in Shanghai the streets are not paved with gold. Our press briefing on the Monday secured coverage in the Shanghai Daily and China Daily, discussing the lack of transparency that exists in China for property investors and the need for international standards to enable Real Estate Investment Trusts (REITS) to be safe investment vehicles for international fund managers. A day later Giorgio Armani arrived in Shanghai to announce opening 40-50 stores in China over the next five years – the finer detail of lack of property title transparency less appealing to the publishers than the sight of the Dorian Gray of fashion surrounded by spring chickens of the catwalk

Spring is officially here, because the heating is off. I arrived back to SOHO to a chilly apartment. Tired and fractious after a days travel I felt the intense frustration of being completely unable to influence my surroundings – the radiators were stone cold and the all-in-one aircon/heater units appeared to have no electricity to them. November 15^th to March 15^th is apparently the period during which Beijing residences receive heating – regardless of temperature or personal choice. One person somewhere on the grid apparently flips one switch and we are all driven to reach for sweaters, scarves and duvet. Today it was 22ºC. The temperature[3] gains a mean 8ºC during the month of March, rising from Hi/Lows of 7ºC/-4ºC at the start of the month to 16ºC/3ºC at the end of the month.  Mercifully because spring is officially here, the same hand that turned off the heat is turning on the water giving life to plants and grass, and flowers in gratitude are bursting into bloom. Nature’s contribution to Spring is the big wind that she uses to scour construction sites for cement and dust the city with a fine grey grit.

According to Chen Zhi Yong, a Traditional Chinese Medicine expert, springtime is one of growth and renewal but also the potential for sickness is high, not least due to this large wind which causes the barometer to rise and fall, affecting one’s Qi or life force. During winter our bodies, like trees, store up energy which forms the essence of Qi, but also toxins. In the springtime these toxins flow as evil Qi that poison our systems, causing illness and skin diseases. Springtime is considered the season of the liver, the cleansing organ, and the organ that is responsible for ensuring the smooth flow of Qi as it takes its passage outwards towards the extremities of the body giving healthy activity. The warmth of spring has also brought health concerns about avian flu, H5N1, and this week government officials were vaccinating pet birds in the park as 16 people in
China have been infected so far, of whom 11 have died.

The numbering of Avian Flu got me thinking about names and the impact of a name on success, a concern this week as I had to christen the China Company. Chinese people, admittedly mainly girls, have adopted English nouns to make their names easier to pronounce for foreigners but also because it sounds cooler. I have met girls called “Rain”, “Ocean”, “Seven” and at the press briefing a journalist with the Shakespearan name “Ophelia[4].” Jessica of ‘Lee and Lee’ devised some nice names which had both the sound of EastWest and a meaning of ease and listening. The problem with translating EASTWEST directly is that while Dong (东) means East and Xi (西) means West, when spoken together as EASTWEST /DongXi (东西) they mean ‘thing’. “Thing PR” seemed a little inarticulate.  We settled on Yi Tong[5] （易通） – which means easy communication, but in this language blessed with ambivalence, can also mean ‘easy to go through.’

Spring is coming to Beijing and with it many blooms. Tomorrow I am having delivered a new computer, printer and router which will create more of a sense of this space being an office and not a weigh station for my adventures, and with posting an advert for the first member of staff I am working to create a team that can connect with the team in Singapore and the Beijing community. The main challenge that everyone has told me they face in Beijing is that of recruitment and then retaining staff. The young people that I have met so far have been extremely earnest and keen to please, but then they have been seeking a placement and it may different once they have the rights of an employee. Now that it is officially spring time, the added concern is that potential candidates are not suffering from an imbalance of the elements of wood and earth, or H5N1, and of course that they like my new company name, Yi Tong易通

Man zou (take care)

H5N1 bird flu virus has infected 16 people in
China, of whom 11 have died

Ophelia is the submissive daughter of Polonius, a chief advisor to the new King Claudius, in the play Hamlet by William Shakespeare. She is deeply loved by both Hamlet and her brother, Laertes. … upon in the play

---

[1] China Daily ‘How to stay healthy in Spring’. Page 12. March 22^nd 2006

[2] Aprea.biz

[3] Thanks to weather.com for precise, unbiased view of the weather

[4] Ophelia is the submissive daughter of Polonius, a chief advisor to the new King Claudius, in the play Hamlet by William Shakespeare. She is deeply loved by both Hamlet and her brother, Laertes. … upon in the play

[5] Tong was the character that I originally chose for my logo in 1995 and therefore has sentimental connections while also remaining true to the vision of the company.

Luxury Chopsticks

This week marked the first time that I was not pre-occupied with operational things, except installing the washing machine, and upon my return from Singapore I was greeted by a clean and tidy SOHO and felt that life is getting good. I landed 2 months ago to set up a Beijing office and finally I have a working office, started legal proceedings and completed EASTWEST China’s fee paying project, this time in Shanghai.

I decided to work with Ken Lee, the chap who endeared himself to my by his observation that snow on my arrival in China was a good omen, and started proceedings to set up the Representative Office. There is a reasonable list of required items with the China business operating as a subsidiary of the Singapore Company. An indication of how many ministries will be perusing my Registration documents, Bank letter of good standing and personal resume, was given by the requirement to submit 12 colour photographs. The process should take four weeks and cost RMB8,500. Ken was the only accountant who wanted RMB; a shrewd move as I watch the US$ depreciate daily in spite of two American congressmen being in Beijing to threaten a 27.5% import duty on China unless it revalues the currency.

It seems that China and the Chinese are now going to have to wrestle with wealth, and the Government announced on Tuesday 21^st its plan to impose a consumption tax on disposable wooden chopsticks, wooden floor panels, yachts, and luxury watches as of April 1 of this year. 15 billion pairs of disposable chopsticks, the eating tools dating back for 3,000 years also called kuaizi, are thrown away every year.

I amuse myself now with looking for Chinese words with identical Pinyin spellings and the same of the four tones; Kuai (4^th tone) also variously means quick, piece, meat chopped, middleman, a unit of money, and happy – hence shengri kuai le (happy birthday). Of course the Chinese character is different but really context is so important to understanding Chinese. I have been considering restarting Chinese classes now that the day to day operations in the office are nearly complete. I still have an intellectual fascination with the characters, am anxious about the inability to not be in command of the company that will be set up here, and want to be able to enjoy events that aren’t specifically for expatriates.

On Friday I went to see a Chinese production of ‘The Playboy of the Western World’[1], and sat through an Irish turn of the century play as good as deaf. The play, a comedy in 3 acts I was later to learn, centres on a young man who gains favour in a small village by claiming to have murdered his abusive father. Seemingly inconsequential, it struck me that this was a challenging play to stage because it strikes at the heart of the Confucian reverence for elder men, especially the father. Here were young Chinese actors and actresses dressed as workmen and massage parlour harlots acting out filial infidelity and sexual promiscuity. It may not sound like a big deal sitting in London or New York, but for Beijing it dawned on me that the amateur group were brave for their play selection and overtly sexual displays on stage.

Their urban anonymity reminded me of the book that my father has recently published[2], in which he analyzes a British Victorian society suffering from ‘cultural schizophrenia’ – a period depicted in literature at once in love with the romanticism of the rural past and passionately embracing the modern urban reality. As I landed in Shanghai, China’s most modern metropolis, for the Asian Public Real Estate Association’s inaugural conference, I was to see the comparable pace of change in China to that which transformed the UK during the industrial revolution.

The APREA conference is our second fee paying project managed out of the Beijing office, with full support from the Singapore team. David Turnbull, former CEO of Cathay Pacific showed photos of the transformation of Shenzen, across the border from Hong Kong, from farming land to tightly stacked urban maze of concrete, steel and tarmac. “To feed all the Chinese people, the small farms will be consolidated and the farmers moved to high rise complexes like this,” said the avuncular Mr Turnbull.

The massive urban development in China means more good business for the delegates at the conference and indeed for me, but as mentioned previously is having a social cost. Presumably a number of the 78,000 civil disturbances recorded last year are the result of this transformation, and the loss of a physical connection with the earth and a forced embrace with the concrete future. With wooden chopsticks considered a ‘luxury’ it seems that the rural poor will be paying yet another price for urbanisation.

 

Footnote: requirements for a Representative Office

The application letter (to be singed by General Manager or Chairman of BOD), please provide following information
Name of the RO, both English and Chinese.
Registration Place of RO (can be extracted from rental agreement)
Name of the Chief Representative and representatives
Business scope
The intended operating period of the RO (normally 3 years)
Photocopy of the Headquarters’ Business License
Photocopy of the Credential Letter issued by the bank of the HeadquarterOriginal Appointment Letters of Chief Representative and Representatives issued by the Director or General Manager of the Headquarter
Identity certificates (Passport or ID card) of Chief Representative and Representatives
The resumes of Chief Representative and Representatives (including education background and working experiences)
12 Photos (2 inch, light blue background) of Chief Representative and each Representative
Office Rental Agreement (the lease term should be not less than one year)

 

---

[1] J.M. Synge John Millington Synge (1871-1909)

[2] The Victorian Novel, Professor Emeritus, Louis James. Blackwell Publishing. ISBN:0-631-22628-1

2,791 Miles out of my comfort zone

I have missed writing the diary, a function of a rather stressful and purely self-imposed extraction from my comfort zone in Singapore. Moving three different apartments in as many weeks, missing out on more horse racing with the Queen, and moving 2,791, has me to question why, at the age of 39, I am embarking on another start up.<!–[if !supportFootnotes]–>[1]<!–[endif]–>

If I am honest it is less to do with ego this time than with a sense that I must keep challenging myself, or I will atrophy in the uber comfortable confines of Singapore. Arriving back from Beijing to Singapore two weeks ago I realized just how easy it is to relax in an environment where really all major decisions and threats have been neutralized by warm weather and omnipresent government control. As the latest elections in Singapore ‘heat’ up the main debate is happening on-line, but journalist Lee u-wen of the Today newspaper worries about Bloggers, ‘They're anonymous, they are eager to comment, but do they know the rules?<!–[if !supportFootnotes]–>[2]<!–[endif]–>[2] According the Parliamentary Elections Act bloggers ‘are legally not allowed to indulge in anything that can be construed as campaigning. ..Nor can blogs conduct "political advertising"[3]. ^{<!–[if !supportFootnotes]–>}Listening to Power 98 with fresh ears, I heard all the recruitment advertising for the army – I’d forgotten that one of the main stations is Singapore Armed Forces Radio. The patronizing tone, the false American accents and the absence of any issues being discussed on any of the stations reminded me immediately of the China International radio in Beijing – these two states are run in parallel lines and somehow the perpetual dumbing down reduces one to aquiesence.

As I moved out of my China-town apartment and into St. Martins Lodge, the stability of the Singapore political system seemed more of a guarantee than a threat. I bought the 3 bed apartment at the top of Orchard Road as a base for myself as I headed to Beijing, but I hadn’t envisaged the strength of longing that I would have for actually settling in. Sonya, one of the team at EASTWEST, urged me to organize a housewarming party, and as I watched Queenie face paint friends I knew that she was right to encourage me. Jim Littel, instrumental in the Beijing housewarming 2 weeks prior, observed that I have a habit of holding parties in empty spaces – and that’s kind of how life feels right now; 2 new spaces for new opportunities.

Some of my inspiration comes from the sense that I am not the first to do this, far from it in fact, and indeed I am sometimes embarrassed it has taken me so long. Singapore is the 7th largest trade partner of China. Temasek Holdings, established in 1975 to own and manage the Singapore Governments assets, has invested over US$4.2bn in China but this is dwarfed by the US$33.15bn in bilateral trade each year, although in fairness it appears that nearly 90% of that is Chinese goods being sold or shipped via the ports of Singapore. There are some 1,217 projects that Singapore companies have invested into China, and I guess that with my little venture we can make that 1,218, as EASTWEST is technically a Singapore company.

I mentioned my latest exploits to Daisy Goh, Deputy Director International Operations of the Economic Development Board, as we placed our S$5 bets at the Queen Elizabeth II horse races on Saturday. The British High Commissioner had kindly invited me. I thanked him that day shortly after he was knighted by the Queen, becoming Sir Alan Collins. I asked him if he had been slightly nervous kneeling before an 80 year old lady waving a length of sharp metal about his head, and it occurred to him then that he had been in some danger and it rather added to the occasion. Daisy and I were pleased to place winning bets in the US$275,000 Queen Elizabeth Cup, and I chose to see it as a good omen for my own race to get EASTWEST established in Beijing. Daisy is an interesting and well travelled mandarin of the EDB, having studied and worked in Paris and been responsible for negotiations with Lucas Film and other creative industry initiatives, and it was with pleasure that I accompanied her in the High Commission Jaguar back to town from the Kranji race course, overlooking the Straits of Johor.

On the drive back, Daisy echoed Ken Livingston comments, Mayor of London who said on opening Mayoral offices in Beijing and Shanghai, “I view closer relationships with China as the very highest strategic policy for London.”<!–[if !supportFootnotes]–>[4]<!–[endif]–> I took these words, and the winning of S$14 on the Queens Cup, to be encouragement as I boarded Air China 970 from Singapore to Beijing – this is the overnight flight that leaves at 00:15 and arrives at 06:00 and promises no sleep as the seats fit Asian behinds and the trolley dolleys wheel through when they should in theirs. It was only halfway into the 30 minute trip at dawn to JianWai SOHO, sipping my Starbucks latte, that I remembered that in order to reduce my luggage to a prudent 20.7kg I had stowed my tennis and squash rackets in the overhead locker. These were now en-route to Singapore no doubt. By the way – there is no English language phone number on the Air China website – not any, and certainly not for left luggage.

All this moving has resulted in me losing several things, and forgetting others, in a way that I have found disturbing not for the loss of a material possession but rather it has lead me to question whether after 10 years in the comfort zone I have not lost something else.

<!–[if !supportFootnotes]–>
<!–[endif]–>

Man zou.

(take care)

---

<!–[endif]–>[1] Ever the eternal optimist, in researching this diary I discovered that if the fortune of Bill Gates was stacked in US$1.00 bills it would reach from Singapore to Beijing, 2,791 miles. Coincidence – or just a comforting thought – I know which I will believe.

[2]<!–[endif]–> http://www.todayonline.com/articles/107441.asp

[3]<!–[endif]–> ibid

<!–[if !supportFootnotes]–>[4]<!–[endif]–> Straits Times page 51 March 4^th

50,000 Lommodipys

Beijing Diaries. Vol. II. Issue. IV (26 Feb 2006)

50,000 Lommodipys

On closer inspection China is full of contradictions, counter currents in the tidal waves of change and culture. In my fourth week in Beijing I listened to Mr China, hosted an art exhibition and learnt that in spite of some signs of non sense, this place is opportunity in chaos.

About 100 expatriates struggled to find seats at the Bookwork café on Tuesday to hear “Mr China[1]” himself, Tim Clissold. This is a book about China’s “institutionalized confusion,” and we listened keenly to his accounts of spending US$400m on companies only to learn of managers building identical competitive factories with the proceeds, long negotiations with factory managers as Tim tried to give them pay increases, and was held hostage by workers fearful for their jobs. At the end of 4 years the New York investor’s money had drained away into the soil of China’s industrial heartlands. Uncharitably, as Tim expounded on the new opportunity being Chinese companies buying western ones, I thought that failure had been rather profitable for the Armani clad author, if not for those who had funded his China MBA.One of Tim’s leading themes is that China has the apearance of being illogical while foreigners abandon their senses when they have their passport chopped at the gates of the middle kingdom. Both appear to me at once true and false. Mark Day, Chief Representative for the Motion Picture Association[2] who has worked in China for 30 years, told me that the difference between Oriental and Occidental people is that Orientals exist on shame and occidentals on guilt. In other words that face and collective acceptance are motivators in Confucian societies compared to individual atonement in judao Christian ones. Therefore westerners, including me, come to a society that is operating on an equal but opposing philosophy and when they meet both are disorientated, both struggling to create order which is structurally impossible. Chinese behaviour seems illogical because it is driven by a different set of values, like that of the factory manager who resisted a pay increase because he lived in the same dormitory as his workers and acceptance was more important for his wellbeing than self aggrandisement.

I had similar degrees of confusion attempting to settle into Unit 0504 of Jian Wai SOHO on Friday – one month after coming to China. It doesn’t seem possible to have one worker labour at a task, and once the two cleaners had finished their 1.5 hours of work I passed them RMB40 (US$5) to settle the RMB35 (US$4) invoice. Twenty minutes later and must gesturing I relented and found another RMB6 so that they could return to me RMB10. Meanwhile a band of 5 men came to poke, point, consult, plan, discuss, agree, talk on walkie talkies,review and ultimately change the light bulb for the decking. It didn’t cost any more money to have all these workers, but there are so many people that a task for one person becomes overly complex and purpose for a committee.

Perhaps B&Q needs a committee to work on their signage, as they play their part to keep Chinese at work in their homes doing DIY. British retailer B&Q is one of the largest retailers in China, promising on their signage, “More than 50,000 Lommodipys to ofeeryou one-stop shopping[3].” Near SOHO is the Beijing branch, 1 of 48 stores which contribute GBP116.8m (US$203m/RMB1.624m) turnover to the Kingfisher Group with sales of these Lommodipys growing at 55.7% per year. I purchased a HAIER microwave for RMB279 (US$34) to complement the Hyundai stereo that cost a princely RMB190 (US$24). It seems illogical that these goods can be so cheap, but considering the agency cleaners cost RMB12 (US$1.5) per hour in the capital city, it is perfectly conceivable that factory workers in second tier cities like Xian are earning US$20 to US$30 per week – what one American factory worker would make in one hour[4]. The 50 to 60 people that came to my SOHO warming party on Friday are living the modern China lifestyle; a cosmopolitan mix of well heeled young Chinese and westerners aspiring to be the next Mr or Mrs China. Rebecca[5] kindly agreed to have a showing of her contemporary Chinese paintings by Tong Zhenggang and Yao Junzhong and sculptures by Yong Jie Pang. It has been a month since I got to China and this was a real milestone for me, one that required making a commitment to Beijing and starting the process of building a social network which for me, is soul food. As the days pass, the self doubt of relocation is transitioning to an awareness that the “institutionalised confusion” of China is something that everyone contends with, and that the feeling of chaos is like living next to a busy road – after a while you don’t notice the noise. Mark told me that SARFT[6], the ministry that Frank Yao[7] works for, limits the number of American movies entering China to 20 per year. The various ministries involved have negotiated royalty payments in excess of 70% leaving the 7 Hollywood studios with significantly less than the 50% that they receive in other markets. As I paid RMB10 (US$1.2) for the fully packaged DVD of the ‘non-approved’ “BrokeBack Mountain” at the store today, I considered that in the face of “institutionalised confusion” someone, somewhere can always get something done in China, even if it is not the person or in the way that one might have expected. After 4 weeks I have no pretensions to be Mr China, but I have invested in a few Chinese Iommodipys.

Man zou (take care)

---

[1] ISBN: 0060761393

[2] http://www.mpaa.org – responsible for anti piracy in China and also my neighbour in Soho

[3] I include the handphone camera shot poor as it is simply to prove the retailer really had this sign. Apologies for the quality – I was stopped earlier from taking photos by an astute manager.

[4] 2004 reports indicate that the average manufacturing wage is $54,000 a year. Source: http://news.thomasnet.com/IMT/archives/2004/01/dispelling_the.html?t=archive

[5] Myself, Rebecca, Allen (Mckinsey consultant) and Vivian (entrepreneur).

[6] State Administration for Radio Film and Television

[7] See Beijing Diary 19th of February

China Boy

I’ve made progress this week, the blanket of snow covering Beijing on Monday being a good omen by legend, as it brings water for the crops in spring. In the first working week of the Year of Dog I have learnt about the myriad laws for company incorporation, rented an office in downtown Beijing and been given an insight into who survives in Beijing, who thrives and who simply walks away.

Monday morning began my education into the labyrinthine legal maze facing me in setting up the company here. Essentially my decision is between setting up an FIE (Foreign Investment Enterprise) as either a Representative Office or Wholly Owned Foreign Enterprise (WOFE). As far as I can understand, they key difference is that the Representative Office cannot function as a stand alone entity, unable to invoice or receive payments from a client. It is taxed 10% on its expenses, and staff have to be hired through FESCO or another government linked employment agency. The real benefit is that there is no need to bring cash into China. The WOFE functions entirely as an independent business with all the rights that gives, costing between US$5,000 and US$15,000 to set up. A function of currency controls, the WOFE must have a stated working capital and this money must be brought into China and registered with SAFE (State Administration for Foreign Exchange). Four consultants later and I am confused whether I need to commit RMB100,000 (US$12,000) or US$100,000 to ensure that my license for a WOFE would be approved. Each consultant had differing stories of which amount would ensure success with the up to 14 ministries that need to approve a business license application.

Pondering the legal entity I was able to be more decisive when it came to committing to an office. I was sold on Unit 0504 in block 10 of Jian Wai SOHO, one of 20 blocks designed by Japanese architect Riken Yamamoto. However, when I told Tina, the rather capricious agent, she said it wasn’t available. Why take me to see a unit that’s not available At 136m2 for RMB8,500 (US$1,620) it is US$7.92m2, less than a third of what the most expensive accountants, Dezan Shira, spend and half that of the cost conscious Mr Lee of Lee & Lee, and so I believed the 5^th level unit in this centrally located complex represented good value. The deciding factor was the decking area that meant we could sit outdoors – unique to the 5^th level and a feature I haven’t seen in any other offices. Body language is universal, and as I sat determinedly in the sumptuous red chair of the Jian Wai showflat, Tina understood that it would be prudent to find the owner, prising open her clam shell phone and securing in principle agreement. By Thursday I had signed the bi-lingual rental contract provided by SOHO management corporation with the young track-suited owner Li Xioalin, and handed across RMB2,500 (US$312) as a deposit – the maximum ATM’s will give out per day.

Excited, I went to Centro in the Kerry Centre, the informal second board room for many expatriates, and met with Americans David Wolf and Kristian Kender. I asked David, a commanding figure with a capacity for facts, figures and over 10 years living in China what would be his advice to me, a China apprentice, “retain your sense of intrigue and remember that you don’t ever know it all.” As we drank Australian red wine listening to the American jazz singer in the Hong Kong owned bar at the epicentre of one of the fastest changing societies, it seemed sensible enough advice to follow – a week of exploring the legal complexities, viewing real estate, and trying to figure out how to see my blocked blog, had left me fairly worn out.

I dedicated my Friday afternoon to regaining some of my lost fitness – for I have realised how this relocation has dislocated my appetite, sleep patterns and ability to ever feel less than tired. I checked out Bally’s^[1] Gym in SOHO which included full facilities and a pool for RMB5188 (US$648) per year and then had a trial work out at Evolution – I was entitled to a free session for buying too much coffee at Starbucks.

Friday evening was spent putting back the calories as I celebrated Rob & Sarah’s birthday at a new and unfeasibly small Mexican bar called Saddle. Amazingly I bumped into two people that I had studied Mandarin with in January 2004 at BCLU – a French girl whose affinity with Beijing is expiring and an ABC (American Born Chinese) lad called Patrick who was most obviously in his element. Beijing, with all its dirt, spitting, pace, and need to be wary of all things, can be both a safe port and purgatory.

There is no doubt that IKEA on a weekend is like Dante’s inferno. Starting with Circle One – Those in limbo asleep on anything that doesn’t move. Circle Two – The lustful after the specials in the ‘sale bin’. Circle Three – The gluttonous who had second helpings of the Swedish meatballs in the restaurant. Circle Four – The hoarders who tucked towels under their arms. Circle Five – The wrathful who got frustrated at the silly Swedish names of everything. Circle Six – The heretics who tried to leave by the fire exit even though the sign said it was alarmed in every conceivable language, and Circle Seven – The violent trying to leave the crushing pay queue. Circle Eight – the fraudulent who came without any intent to buy; that was Rebecca and I as we couldn’t handle the inferno.

In one way IKEA is a microcosm of China – where modern retail meets Chinese reality, a place of real consumption and aspiration. SOHO, owned by a Chinese, designed by a Japanese, rented by an Englishmen and furnished by Swedes, may be an indication of how quickly there may not be such a simple figure as a China boy. How exciting is that!

Nearly as exciting as going to Rebecca’s art gallery opening this evening stylishly named, ‘88 Art Documents Storehouse’ in Feijia Village. There I met many famous artists including Tong Zhengan, but I fell in love with the China boy paintings by Yao Junzhong (sample at top of article). The art scene in Beijing is vibrant, exploring issues of modernisation, romanticism of the past and wrestling with the moral distraction and attractions of commercialism.

Writing from his hotel room in a very different city, Montreal, a good friend Keith Mitchell wrote to me in response to Brittle – and I wanted to share this verse. There is a poet in us all.

China Boy

I wonder, why?
Approval? Never!
Excitement? Maybe.
Adventure? Probably.
Challenge? Certainly.
Pretending with extravagant visits.
Satisfied with collecting stamps.
Fear is our leader.
But his defeated opponent.

That’s all for this week:

Man Zou (慢走) – which means literally walk slowly, or take care.

Great Expectations

Sitting in the grandly named Metropolitan, unit 10-A, that lies outside the fourth ring road of Beijing, I am listening to Handel’s Messiah enjoying the uplifting score after my first week in China that was marked by missing Singapore, skiing, my first car crash, and some cynical conversations about China.

I will only permit myself one cathartic sentence to say that leaving Singapore has not been easy; my wonderful friends, the super team at EASTWEST, balmy weather, riding my scooter in shorts to the driving range, and sheer ease of life, have all been missed. As it was my decision to set up an office in Beijing, I can give myself no sympathy but have tried this week to stay committed to my vision for leaving my home of 10 years on the eve of my 39th birthday, arriving at dawn on the 25^th January, to start a new company in the biggest potential market on the planet.

One of the fastest growing markets in China is leisure, with China becoming the fourth biggest tourist destinations, and also a fraction of its own population enjoying leisure time. In my first week I’ve been skiing twice to different resorts. My expectations were high when Carly and Mary Jane told me about Nanshan, one of 200 ski resorts in China, and we hired a Hyundai elantra and driver for RMB600 (US$72) to drive us 1 ^1/2 hours north of Beijing. The car park was filling up with Audi’s, Hyundai, and Toyota’s containing passengers able to spend RMB340 (US$42.50) to ski[1]. The confusion was inside where the Chinese practice of having multiple people for one function was in evidence – buy a ticket from one person and have it checked by another a few feet away. Luckily for Carly she was able to rent the entire ski outfit too – another indication that this wasn’t St. Moritz. A good friend of mine, Steve, had refused to come skiing because of the appallingly high number of accidents on the slopes – Chinese ski as they drive; into one another without indication or brakes.

On Friday my cab driver duly looked left as we crossed a 4 way no stop junction and the other driver looked right – both entirely neglecting to look at the direction of on-coming traffic. I did – but my Mandarin doesn’t extend to ‘that big car is going to hit us’ – at least not quickly enough. Both drivers got out and proceeded to light smokes without remonstration, which surprised me, and within minutes the roads on all 4 sides were backed up as other drivers drove as close as they could for a look. Somehow it is like the cars arrived but the roadsense gene, like the enzyme for processing alcohol, just doesn’t exist in Beijing drivers.

I was on my way to meet Marianne Freise, a German lady who has lived here for 5 years and used to run a large PR firm. Marianne has been kind enough to share some information about the competitive PR scene here, not least the practice of giving a Hong Bao (red packet) with cash to journalists when they come to an interview or conference. She passed me also details of a lawyer and I spent a happy day emailing lawyers and accountants to set up appointments to learn about company incorporation here. It felt good to be slowly starting the wheels turning and piecing together the costs for legal, staff, accommodation, taxation. The main anxiety of course is not the cost of setting up the business, but rather getting the clients.

It has been my vision, or theory, that all eyes will focus on China until the Olympics are over on August 24^th 2006. Certainly when I turned on my TV this Sunday morning to CCTV 9 (the only English language channel available without cable) a songstress was singing “I love Beijing, I love China, I love the Olympics, I am in love” and so it seems to me that China is as excited as everyone else. I want to help people make the most of the Olympics – and I believe I need to be here to do that. The questions to answer this week will be:

a) Legal form the company will take – Wholly Owned Foreign Enterprise or Representative Office.
b) Size and location of office – knowing that Chinese staff choose a company partly on the prestige of the location.
c) Size and location of the apartment – knowing that Beijing traffic can be, quite literally, bad for ones health.

The question on the lips of the mates I had a beer with, while watching England thrash Wales in the 6 nations match on the South African channel, was how in favour China will be after the Olympics. My own naivety was crushed on Wednesday when, after only a week on-line, my blog and the entire wordpress.com blog publishing portal was blocked in China. ‘A nice little business in China” – is viewable from everywhere except from where I am. Marianne was telling me of having emails sent by her firm to a lawyer entitled “legal disclaimer” being returned to her with a “get out of here” remark. Her lawyer didn’t ever receive the email. I am reading a book by Gordon G. Chang[2] entitled “The Coming Collapse of China” and it depicts an authoritarian regime desperately holding onto power and attempting to assuage the rural poor, reconstructing the bankrupt financial system, while maintaining a face of calm composure to the outside world.

I am not sure that I have maintained a calm composure myself this week, in a darkened dry moment getting out my Treo and tapping ‘Brittle.’

I’m brittle. Beijing.
Shaving blades scratch and slash
My nose bleeds
The dried blood never leaves
Early or late to bed
My burning eyes always China red
In the Beijing dust lies the future and the past
Brittle Olympian, I will last.

---

[1] Bear in mind average income in China is still only US$4 per day. Rob told me that at the same resort the local peasants had barricaded the road previously demanding monies be paid to them by the resort and it’s patrons.

[2] Isbn 0-09-944534-4

Domestic bliss

I went shopping armed with my dictionary. I managed to buy a Midea kettle (the best brand the shop assistant assured me) with transparent sides which lights up the water with a delicious blue glow when it boils. The only downside is the power cable is only 6 inches long, a full 6 inches too short to be plugged in without me holding the kettle in mid air.

Found O-zone fitness club. 800RMB for 1 month or 4650RMB for 12 months – it’s the same price as Singapore. I thought my mandarin was breaking down when it seemed that if I joined for one month I could not use the pool, although full term membership brought with it a hearty swim. It was indeed the policy to deny short termers the pool! I found it hard to resist joining though when the brochure entreated me “Join – what are you warting for?” I must call Fisher to confirm.

Evening spent with Hua, Marianne, Rebecca and Ste (a Danish granite merchant) at the Aria bar in the China World hotel. Apparently Ste buys granite in China in vast quantities and ships to Europe. As the most stylish bar in Beijing I checked to see if they also had Midea blue glow kettle but was quietly smug to think that I was the only consumer to have snagged this impressive asset.