Post China Study Trip Thoughts…Part 1/4

It’s almost a week since I got back from China and I’m still jet-lagged (I think). I don’t know what’s up with me these days. I can’t sleep during normal EST night hours and I’m sleeping until 4:30 PM in the afternoon pretty much everyday. My family is starting to wonder what is wrong with me ;) I’ve never gone more then a couple of days like this following a trip to Asia, but I guess the late Christmas family gatherings and partying coupled with the jet lag are playing a part. I’m really tempted to take a sleeping pill to get back on track, but I guess that will be a last resort if things don’t remedy themselves. I guess we’ll give it a couple of more days. All in all, the entire trip was very memorable but I am very glad to be home with my wife and family in Ottawa. I’m now at the point where I’m ready to head back to London and get back to school. I can’t believe I’m saying that but it’s true. Family time is great, but I tend to like it in small doses and I think I’m ready to head home (yes… London feels like home now). I’m ready to jump back into the fire and meet up with my classmates that I already seem to be missing after only a week apart. I feel recharged and I’m ready to put in 110% again.

So how was China? Incredible! It changed my entire perspective on the region, and gave me lots to think about with respect to China’s prosperity, governance, and future role on the world stage. It was also an incredible journey with a bunch of great friends and colleagues. It was the type of trip that had a bit of everything: adventure, spontaneity, fun, sightseeing, sickness, excess partying, ups and downs, and drama. But it was also the type of trip that brought us closer together as a group and I think that this was the single greatest benefit of it.

Picture: My Classmates and I explore Beijing's Historical Sights:

So I figure I would write a series of blog entries to recap the trip. I’ll publish these entries in sequence as I get more time to write. This first entry is a general perspective on the trip and highlights my overall perspective on the China Study Trip. I’ll follow up with detailed blog entries on the specifics of days 1 through 11 spread over two or three blog entries…stay tuned.

It’s probably worthwhile to highlight the purpose of the trip before I go any further. The China Study Trip is an MBA elective course offered at Ivey (yes we get credit for it). The purpose of the trip is to visit China (Beijing, Shanghai, and Hong Kong) and learn about how business is conducted in China, how it’s growing, what the business climate is like, what the culture is like, and perhaps its an opportunity to strengthen your bonds with your classmates (your network for life post-MBA).

So after almost two weeks in China, what are my immediate thoughts and perspectives on the country we hear so much about but know so little about?

-You’ve got to visit it to understand it. We hear a lot about China on the news and in the classroom; communism, human rights, growth to name a few of the dominant topics. I think that the western nations paint a fairly dismal picture on a country that is booming and is sure to have a prominent role on the world stage. Sure China has its problems, but things are changing rapidly and a visit to China is the best way to make up your own mind on how you feel about it rather then agree blindly with what the mainstream media is conveying. My perspective on China is completely changed after my visit. In fact, I almost wander if North America will be left behind in terms of infrastructure, and innovation in 20 years at the rate that China is developing and accumulating wealth and ownership of foreign debt (especially U.S. foreign debt).

Picture: Hong Kong at night (left), Maglev train in Shanghai (centre), Shanghai World Financial building - 101 stories; third tallest in world, and Grand Hyatt - 87 stories (right)

-China is absolutely a force to contend with and will pose serious competition and threat to the continued dominance of western nations. One visit to Shanghai and Beijing will surely demonstrate the economic might and future prosperity of this emerging market. Take a look at the 101 stories World Financial Centre or ride the Maglev train in Shanghai, or the metro in Beijing, and you’ll start to wander how they are doing it and whether North America is falling behind. Their economy is shifting from one that is dependant on U.S. exports to one that is dependant on its own consumption. In fact China’s economy is roughly 25% dependant on its own consumption versus about 65% for the U.S (so they depend heavily on the U.S. as does the U.S depend on them for debt funding). China’s dependence on the U.S. will likely diminish with time as Chinese incomes rise. Take a look around Beijing and Shanghai and the roads are littered with high-end Audi’s, Volkswagen’s, and Buick’s (Shanghai/General Motors ~Joint Venture). People have money in the big cities and with a small credit market it’s mind-boggling when one thinks of where the money is coming from or how families have saved so much to make such lucrative expenditures?

Picture: World Financial Centre in Shanghai at night (left), Hong Kong skyline (right)

-China’s major cities paint a bright façade for visitors, and offer the latest and greatest in infrastructure, architecture, and culture. Visitors are surely going to be blown away when the visit, but the question I kept asking myself was what were the rural areas like where 80% of the Chinese population lives? Do the big cities paint a false picture of what most of China is really like? I’m guessing that the rural areas/tier 2-3 cities are pretty third world. We had a chance to visit a pseudo-rural area one day and sure enough it was quite a different picture than their tier 1 cities. But China continues its cultural revolution and there is much talk of a trend taking shape whereby a mass migration of rural inhabitants will populate large cities, and new master-planned cities that will give Dubai a run for its money. The government is agile and can surely make things happen quickly without having to work their way through a House of Commons or Senate. After a visit to a new master-planned city near Souzhou (a city 2 hours outside of Beijing) I was blown away of how this new high tech master-planned city was becoming reality. I was also blown away of how they were able to preserve their cultural heritage.

Picture: Picturesque Souzhou (left), and Forbidden City in Beijing (right)

-The Chinese government is agile; a perfect quality in today’s world. Just look at their bailout package. Almost $600B U.S. in infrastructure projects announced and immediately approved, and that money has already spawned construction projects within weeks of the announcement. Compare that to the U.S. bailout that falters once, twice in Senate, and will likely take 12 to 18 months before infrastructure projects are kicked off the ground. Are we agile enough in North America? Is China’s socialist republican ways the reason of why they are able to control their 1.3 billion people and set the stage for economic prosperity while India (the world’s largest democracy) struggles to get control over its population and is easily 20 years behind China in development? Did India do it backwards? Should capitalism and democratic ways come after the government gains control and develops the infrastructure it needs (as it appears to be happening in China)? What can India learn from China?

Well that’s a taste of my learning’s and questions from China. Stay tuned for detailed accounts on the trip as I follow-up with additional postings over the coming days and weeks.

Happy New Year’s….Until next time.

Sacha