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John Findley Blog

John Findley is a China specialist having lived, off and on, in China for around 30 years. He now lives in Newcastle. He is a highly experienced senior executive and now runs his own migration business (a genuine independent contractor) supporting high-end executives to work in Australia.

Views on China from ‘on the ground’ August 2015

Monday, August 31, 2015

From John, June 2015 (somewhere in China)
Hi Ken,

I spent an evening with the major shareholder of a Chinese auto manufacturer. He has a range of battery powered light trucks. Government has a direct action subsidy plan whereby the manufacturer of the truck actually gives it free to the user. No tax imposed, just direct action.

Polluting trucks are no longer permitted into the city of Beijing. Only 2 manufacturers of electric trucks have a license, including my friend. Theirs will be permitted into the city.

Later in June
It appears that Beijing has shut down significant manufacturing operations to allow the air to clear in preparation for the WWII victory celebrations. The same thing happened for the Olympics in Beijing. That will be having a significant impact on the economy, but it is no accident. It is a deliberate and considered move by the government. They are more concerned about a blue sky (a rare event in China) than the economy – with which, one suspects, Chinese authorities are comfortable.

Some notes as he travelled through China

1: Young people adopting technology. I stopped for a really cheap lunch in a Guangzhou 7/11 store. There were dozens of kids out from the local offices to take their lunch. Every one of them (it seemed to me) was paying using their mobile phone. I was fascinated; there seemed to be several different ways to pay, some were scanning that square bar code thing (showing my age here) and some were "pay waving" with their phones. I tendered hard currency and got a glare from the shop attendant who had to actually ring up the sale on the cash register and delve out my change.

2: The Great Firewall of China is causing great distress to me. I could not get gmail, or optusnet. One of my Chinese colleagues gave me a "tunnelling app" that tunnels through the Great Firewall of China to a HK server and I can contact the outside world. It seems that Google is permanently blocked to give the market to Baidu (the Chinese knock-off). Baidu is an appalling search engine: the first two pages of results are advertisements, scarcely related to the search. When using Baidu it takes me at least 10 times longer to search information for developing a business plan for my clients. All Chinese are subject to that inefficiency so that Baidu can make huge profits.

3: Chinese airlines. On the first two domestic flights I have experienced huge delays, arriving in my hotel at 3:00am and two days after arriving in my hotel after midnight. Rain is the stated cause, but it might entail a network design issue; a delay at A having a knock-on delay at B and C, etc. My further travel will be by high-speed train.

John chatted with his mate Steve Martin who has vast China business experience
Just let me start with the almost trite observation, China is very big. It is not possible to sensibly characterise China with simple statements. There are wealthy super cities such as Shanghai with a population about the same as the whole of Australia, and there are regional, third- and fourth-tier cities that have very different issues.

The vast size of the Chinese economy is its own salvation.  

Steve Martin is formerly CEO of Shanghai Ying Jie, a mid-sized import–export business based in Shanghai. Steve comments: "The international doom and gloom reporting is focused on the stock market gyrations. This is a distraction from the real issue, i.e. China's deliberate transition from an export-driven economy to a domestic service-based economy”.

Steve says: "One of my local Chinese colleagues complains vehemently that his gains of last year (120% capital gain in the stock market) are now only 65%!  Steve says “that the stock market has been driven by mum and pop retail investors; they play the stock market as though it were a Mahjong game”.

"On a broader scale the Chinese Government tends to manipulate the economy, importantly addressing the very real need to create employment in the third-tier cities using public works.  He says that “There is evidence of unemployment in these cities as itinerant labour returns from the main cities.  In these second- and third-tier cities, government continues to spend, amongst other projects, on transportation infrastructure such as high speed rail, roads and other urban improvements.”

"The huge impact of the new high speed rail service travelling at 300kph is to reduce train travel times from, say, 36 hours to 9 hours (covering 2000 km) enabling family/work connections to occur more regularly rather than once a year. The fast train development will further stimulate domestic tourism, as is already evident.  There is a continuing upswing in tourism-related jobs in these regions helped by better infrastructure”

Steve comments: "Shanghai Ying Jie, as an import and export business, has been affected by the economic changes. This has been caused more by the downturn in outside economies, rather than internal Chinese causes”. He said the company is responding to maintain its position by focusing on value-adding the products for export. The company has to respond to both the local and international market changes – it’s a challenge that’s not new to us. We feel optimistic about the future and whilst growth in China has slowed, it’s still 6.5 per cent, which is largely due to a slower demand for exported products by the rest of the world.  

And finally, be careful with translation
1. I was promoting an Australian postgraduate program, the Juris Doctor. I could see I was not making an impact so I backtracked the translation. It seems I was misunderstood and Juris Doctor was being translated as Jewish Doctor. After we got past that hurdle, the response was a little better.

2. I was trying to tell a new agent that I am not university staff, I am an agent "Dai Li", or representative "Dai Biao", but I got tongue-tied and told her I was a "Dai Bi". I do speak a little Chinese, including some swear words! I had just made a very good pronunciation of a very bad word. I had told her I was a "big ****". The girl knew what I was trying to say and kept a straight face for a couple of seconds before she erupted into laughter, "John is big ****!" Oh well, they will remember me at that agency.


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