Americans doing Business in China – Part 1/16

February 21, 2012

Before I started putting this series of posts together, I read an ABC News piece by Bill Weir on “A Trip to the iFactory: ‘Nightline’ Gets an Unprecedented Glimpse Inside Apple’s Chinese Core” — (Note: clever play on words.)

Weir’s piece is a long one but there are some telling points I’m going to share before I launch into a series of guest posts from an American that did business in China successfully for a number of years. Each one of these guest posts stands alone but provides a glimpse into another person’s experience doing business in China.

However, in 2010, Apple was crucified in the Western media due to a number of suicide at Foxconn, which is the Taiwan owned company that assembles/manufactures about 90 percent of Apple’s products. If you were not aware of it before, many Taiwanese do business in China and Foxconn is an example.

In his piece, Weir said, “They (the suicides) went up during a three-month span in the spring of 2010, when nine Foxconn workers jumped to their deaths. A total of 18 Foxconn employees took their own lives, or tried to, in recent years and given the company’s massive size, it is a suicide rate well below China’s national average. But when people started jumping in a cluster, Woo tells me that Tim Cook rallied a team of psychiatric experts for advice. They suggested nets, on the chance it might save impulsive jumpers.

“But Foxconn wasn’t Apple’s only problem. The company says they stopped a supplier named Wintek from using a toxic chemical to clean iPhone screens after 137 workers were injured…

“Apple says they have been ordering audits of its suppliers since 2006, and since 2007 have been publishing the sometimes disturbing results…

“It is a Monday after a Chinese holiday, and since many overworked migrants will just stay home, the people who lined up before dawn know that the chances of getting an assembly line job are better than average. And in a country of 1.3 billion, where jobs are scarce, getting there first matters; especially for their families back in the village, where most of their paycheck will end up…

“Starting salary is around $285 a month or $1.78 an hour. And even with the maximum 80 hours of overtime a month, the Chinese government considers them too poor to withdraw any payroll taxes…

“We mostly found people who face their days through soul-crushing boredom and deep fatigue. Some complained of being overworked, others complained of being under worked and almost all said they were underpaid…

“We do have labor unions at Foxconn … but it’s not a freely elected labor union yet. I expect to see that in the next year or two, they will become more like a collective bargaining union, and they will be freely elected. In fact, I see that some legislations in more progressive provinces (of China) would require labor unions to be sitting on the board of companies…”

The exclusive full report from ABC’s “Nightline” will air Tuesday, February 21 at 11:35 p.m. US ET/PT. This link to Hulu is where much of the full episodes of “Nightline” are posted for online streaming the day after the original broadcast.

Continued February 22, 2012 in Americans doing Business in China – Part 2 (a guest post)

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Posted by Lloyd Lofthouse

Chinese Women in Science & Business

February 14, 2012

Business Week.com says, “Women now hold 34 percent of senior management roles in China, excluding Hong Kong, up from 31 percent in 2009, according to a 2011 Grant Thornton International Business Report, a survey of global companies.”


Tianjin Women’s Business Incubator (China)

The Harvard Business Review says, “In the decades since Deng Xiaoping instituted market reform, millions of women have profitably followed Deng’s dictate that “to get rich is glorious.” Half of the 14 billionaires on Forbes magazine’s 2010 list of the world’s richest self-made women are from mainland China… Backing them up are legions of qualified and ambitious women who, increasingly, are the engines powering China’s economic juggernaut.”

However, in the Western media, I often read or hear about sex slaves and prostitution in China, which is an example of Yellow Journalism at its worst. Seldom do we hear about China’s women in business and the sciences.


Professor Vivian Wing-Way Yam from China – 2011 Laureate for Asia and Pacific

What we should hear about from the Western media but often do not are stories about women like Dr. Zhang Yanxuan, an innovative scientist, who started a successful business in China to destroy mites that eat food crops. With twenty-seven years of scientific knowledge and government support, she raises predatory mites, a biologically safe method to kill the mites that eat crops. Her products are also being exported to other countries.


RSC Council member Professor Helen Fielding introduces leading Indian and Chinese scientists who talk about their inspiration and give advice to women starting out in science

China is currently the world’s leading pesticide user allowing chemical companies to make hefty profits while poisoning the environment and the people. However, Dr. Yanxuan’s predatory mites may replace pesticides as China’s government is becoming greener in their thinking.

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Innovation in China ­– Part 2/2

February 13, 2012

Two examples of Chinese innovation in its private sector were reported by the UN Chronicle.

The title of the UN report was “Industrial And Rural Energy In China: Innovative Private-Sector Initiatives Lead The Way”

The report said, “Entrepreneurs in the energy-related sectors, especially in thermal energy, are pushing for groundbreaking and profitable innovations that promise to help control the country’s ravenous industrial energy consumption while maintaining, or even increasing, high levels of output.”


“Encouraging Innovation in China” – Thoughtful China

The UN Chronicle said, “Beijing Shenwu Thermal Energy Technology Company, founded in 1999 by Wu Dao Hong, is a prominent example of the success entrepreneurs are finding in implementing business models that combine environmental and economic goals. It manufactures equipment that reduces industrial fossil fuel consumption and carbon emissions.”

The second example mentioned in the UN report was Hao Zheng Yi. “More than 25 years ago he had the foresight to recognize the formation of a large untapped market for clean-energy services in rural China…

“Mr. Hao’s pioneering design for a sustainable heating and cooking stove, based on cleaner and more effective technology, shows how vital private-sector solutions are in supplementing government efforts to address environmental and social challenges…”

In addition, China is planning to generate electricity using nuclear power.

“A 2009 assessment by the IAEA under its Innovative Nuclear Power Reactors & Fuel Cycle (INPRO) program concluded that there could be 96 small modular reactors (SMRs) in operation around the world by 2030 in its ‘high’ case, and 43 units in the ‘low’ case, none of them in the USA.”


Global Competitiveness Report 2010-2011

However, “The most advanced modular project is in China, where Chinergy is starting to build the 210 MWe HTR-PM, which consists of twin 250 MWt reactors.” Source: World Nuclear Association

China’s critics may cry that nuclear power is not safe. In fact, safe nuclear does exist and China is leading the way with thorium with the liquid fluoride thorium reactor (LFTR).

The UK’s Telegraph reported, “A few weeks before the tsunami struck Fukushima’s uranium reactors and shattered public faith in nuclear power, China revealed that it was launching a rival technology to build a safer, cleaner, and ultimately cheaper network of reactors based on thorium.”

Victor Stenger (Physicist, PhD) writing for The Huffington Post says, “The U.S. may end up buying LFTRs from China. Perhaps WalMart will sell them cheap.”

Return to Innovation in China – Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Innovation in China­ ­– Part 1/2

February 12, 2012

Ever since the debate with Troy Parfitt, I’ve been interested to discover if there was a way to measure global innovation to learn how China compares to other nations such as the United States, Singapore and Canada.

In fact, there is a way. It’s called The Global Innovation Index 2011. Since 2007, INSEAD eLab has been producing this index, which recognizes the key role of innovation as a driver of economic growth and prosperity.

Through a complex method of gathering data, INSEAD eLab and its global partners compiled the annual results.

China may not be the world’s number one country on this global index, but it is ranked twenty-ninth of the 125 countries on the list and it has a score of 46.43. The lowest rank went to Algeria, which had a score of 19.79. The highest went to Switzerland with a score of 63.82.

By comparison, the United States ranked seventh with a score of 56.57. However, one region of China beat the US and was ranked fourth—Hong Kong (SAR) with a score of 58.8. Canada was ranked eighth and Singapore, with 76.8% of its population Chinese influnced by Confucian values, ranked third.


Global Innovation Index 2011

The Global Innovation Index ranks countries with a complex series of measurements that are described in detail in a fifty-four page pdf document, which may be accessed from the Global Innovation Web site (see link above).

The pillars used for measuring innovation are: Institutions, human capital and research, infrastructure, market sophistication, business sophistication, input, scientific outputs, creative outputs, output, and efficiency.

INSEAD has four partners that help compile the data that results in the Global Innovation Index—they are: The World Intellectual Property Organization at the UN (WIPO), Alcatel-Lucent, CII (Construction Industry Institute), and Booz & Company. In addition, INSEAD’s advisory board is comprised of senior representatives from organizations such CERN (European Organization for Nuclear Research), UNESCO (United Nations Educational, Scientific and Cultural Organization), and ITU.

Why is it important to the global economy to identify countries that have a rich environment for innovation? Professor Dutta says, “Both developed and developing countries realize that innovation is the only way that they can guarantee the competitiveness going forward. It is also important because innovation is important to inspire young people in an economy.”

Continued on January 11, 2012 in Innovation in China – Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Meet the Winemaker from Shanxi Province

February 11, 2012

In August 2010, the China Daily reported, “The number of private enterprises reached 7.5 million, accounting for half of China’s gross domestic product, 70 percent of the nation’s technical innovations and 60 percent of its patents.” In addition, “China’s top 500 private companies have surpassed State-owned enterprises in many indicators, especially tax payments and employment creation, according to a report from the All-China Federation of Industry and Commerce.”

In fact, Bloomberg.com says, “Many of the world’s richest self-made women are Chinese,” and Psychology Today.com tells us, “Women own more than 40% of private businesses in China.”

Meet one of those women. Judy Leissner was 24 when she became the CEO and President of 168-acre Grace Vineyard in Shanxi province, south of Beijing after she quit her job at Goldman Sachs.

The first grape-vine plantings were in 1997 and the first vintage in 2001. Judy started the winery because her father liked to drink. Today, Judy produces a quality wine—about 700,000 bottles annually.

Most people do not know that quality wine is produced in China. In fact, Judy has competition since there are about 400 wineries in China.

Judy says there is an opportunity in China to make a lot of money in a short period of time, because the country is developing and growing.

The difference between the wine market in China and the rest of the world is that most drinkers in China must drink because they have to. It’s part of the culture of doing business and developing guanxi.

In an update, Grape Wall of China.com visited Grace Vineyard in September 2011, and Jim Boyce says he visited Grace CEO Judy Leisser. He says, “About a week ago, she sent an email that the wines Grace bottled under screw cap earlier this year are doing fine and, if all goes well with final trials, the winery will switch closures this year for its entry level and premium level wines. Grace’s Premium Chardonnay ranks among the better Chinese wines and is found in top hotels and restaurants in Beijing and Shanghai.”

In addition, in an interview at 24×75.com with Judy Leissner October 17, 2011, she was asked how different the work environment for Grace Vineyard was compared to Goldman Sachs where she worked prior to becoming CEO of the vineyard in Shanxi Province. She said, “Goldman Sachs is a fast-pace, can-do, efficient place.” However, for the winery, she said, “The whole atmosphere was rather sleepy.”

In another question, Judy was asked about social responsibility and what those two words mean.  She responded with, “We guarantee our growers basic income… Grace is a perfect example of an environmentally friendly and sustainable business. We provide many jobs for people from nearby villages.”

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Note: This updated and revised post first appeared on November 08, 2010

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