The “metrosexual” is a case in point.  When this first started showing up in the American press, I guffawed, loudly and regularly.  I am the polar opposite of this type of “man”, and the Justin Beibers of the world seem to me a sign of the exceptional prosperity of our modern world, even in this challenging economy.  Just as modern environmentalism is a luxury good, the foppishness of the “metrosexual” is a sign that we have so many creature comforts that you can afford to focus your energies on the right sort of hair gels over knowing how to survive in an inhospitable environment.  The remake of True Grit comes out soon, and I can only imagine Rooster Cogburn’s take on “metrosexuals”.

In my view, you always need to be ready for the coming zombie wars.  To quote Robert A. Heinlein again:

A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.

So far this week, I have closed business deals, hung insulation, wired a light fixture, fixed a leaking tire, bled radiators, cooked breakfast, saved a baby mouse from freezing (my son named it “Cheddar”), etc.  Somehow getting a mud mask did not make the list.

Reading this article, China’s `City Jade Men’ Indulge in Mud Masks, L’Oreal Creams, I am intrigued to see China’s accelerated adoption of “metrosexuality”.  Not that it is without precedent in Chinese culture.  It is common to meet a Chinese man with at least one freakishly long fingernail, usually on a pinkey finger.  In the West, long fingernails on a man usually mean one of two things:

1. He’s a guitarist.  Years ago I tried to learn how to play the bass guitar and my teacher, a classically trained musician, had luxurious fingernails on his right hand, which he used as picks when he played.  Needless to say, the man was an exceptional guitarist.
2. He’s using it as a coke spoon.

This is NOT what it means in China.  It is a cultural sign that he has moved past the need to perform physical labor, a tradition that dates from the imperial court.  Pretty hard to dig a ditch or run a punch press without breaking a nail.

It is harder to find good factory workers in the USA than in decades past.  I say this from personal experience, that most the folks we interview can’t hack it in a manufacturing environment – they are too “soft” for real work.  If “metrosexuality” takes off in China, maybe Limbaugh’s onto something.

On several fronts, those surveyed said that the United States still compares well with other nations. Nearly three-fourths said that the U.S. leads all or most of its major competitors in the quality of its colleges and universities, and about two-thirds offer the same verdict on American science and research. To Julie Gordon, a computer programmer in Yorktown, Va., those advantages are grounds for optimism about the nation’s long-term prospects. “Definitely in areas of science and technology there is potential,” she said. “If we do focus on educating our young people in the right fields, we do have the right [prospects].”

Slightly smaller majorities give the nation high marks on two other key measures of competitiveness: 57 percent said that the U.S. outranks most competitors in the quality of corporate leaders, and 56 percent reached the same judgment on the quality of the American workforce. “I think we have a fairly well-trained workforce,” said Bill Scherer, a trucking-company manager in St. Joseph, Minn. “I think that would probably be the biggest benefit … that would help us compete against China.”

On other horizons, though, Americans see more clouds. Just half say that the U.S. beats out most of its competitors in the quality of government programs to encourage growth; only 46 percent said that business and government cooperate more effectively in the U.S. than in other nations. Most strikingly, only 43 percent said that the U.S. leads most other nations in the quality of elementary and secondary education; 53 percent said that we trail our major competitors. That pessimistic sentiment was broadly shared. At least half of both the affluent and the working class, and half of those with and without college educations, saw U.S. primary education as lagging.

I sadly have to agree with the decline of basic education in this country.  I spend a significant amount to send my children to a private school so I know they get a quality education.  I have no faith in the public system.  None.

However, what does it say about our current political and regulatory environment that a $14 B economy thinks they have lost out to a $4 B economy with about 4-5 times the number of citizens?  In marketing, perception equals reality.

The biggest problem in the USA is the uncertainty caused by the current administration.  If you don’t know what’s going to happen, you don’t invest, you don’t start a new business.  China has us beat on that front.

The fix for the USA is pretty straightforward, which means it will take a superhuman effort in Washington to stabilize the system.  Now that there is competition on a global scale, from China, India, Brazil, etc., it is not surprising that the perception is that the “American century” is well and truly over.

Tell me what you think, ’cause I’m just a drunk who doesn’t know any better…

China is different in a couple ways though. One is the fact that the West has yet to be developed, the other is there is still a huge labour [sic] pool waiting to be tapped. As long as there is still liquid [sic] in the Chinese economy, which there is, these people save like the banks are collapsing tomorrow, there will be room for development and the creation of new growth. Not today.

Dan has lived in Shenzhen for several years and I respect his opinion.  However, a couple of thoughts:

1. Yes, the Chinese west is undeveloped, but I suspect it will remain so.  If you look at the map of the world, the developed zones (outside of the USA) are mostly coastal regions.  This will, I believe, remain true for China.  If you are an export oriented economy built around finished goods, your customers are not going to want product shipped from Xinjiang province to the coast.  Energy, raw materials, minerals all lend themselves to transport over long distances but manufactured products DON’T.  Nearly 20 years ago, we were doing business in the Czech Republic, and we ultimately stopped because it was land locked and the transport costs made the price far higher by the time it made it to a boat in Rotterdam, regardless of what the ExW cost on the invoice said.
2. Yes, the Chinese nouveau riche save their money and invest heavily in the only vehicle they can trust – real estate – but that is precisely the point.  If you buy an apartment for $100,000 and then the market goes soft and that flat is now valued at $80,000, that is a loss no matter how you slice it.  The difference is that in Japan, the system is transparent enough that you can invest in government bonds with confidence.  China, not so much.

However Canada Dan is right that I do not see a popping of the Chinese real estate bubble will result in the total collapse of the Chinese economy.  There is too much low cost labor and manufacturing know-how there to be brought low by one sector of the economy taking a hit.  China will remain a destination for foreign investment, especially given the tenor of politics in Washington.

So thanks to Canada Dan for providing the material for another blog post and I look forward to having a beer the next time I am in Shenzhen!

Rowe’s point delivered to Congress, is worth quoting:

Rowe explained that “dirty” jobs, like those in manufacturing and farming, used to mean success, but now look like settling. He wants that to change.

“I don’t think the country is going to fall back in love with manufacturing and I don’t think these policies are going to change, until or unless we reignite a fundamental relationship with dirt, work, and the business of making things, as opposed to the business of buying them,” he said.

He said one of reasons this is occurring is because community colleges and vocational education have taken the backseat to four-year college degrees.

“It’s not happening because people hate community colleges, it’s not happening because people hate the trades, it’s happening because we’re promoting a very specific kind of education at the expense of the others,” he said.

I’ve written before about the higher education bubble (here and here) and thoughts on American competitiveness and the attitudes towards work, but Mr. Rowe does a better job of laying out where we’ve lost our way a bit.  Convincing people that the only path to wealth is $120,000+ in debt for a degree in liberal arts or the soft sciences seems further from the mark than ever.

China has built serious capabilities in the last 30 years, skills and knowledge that many parts of the developed world have allowed to atrophy.  Part of the attraction to doing business in China is price, but increasingly it is because the domestic industries have shrunken to the point that China is the only place you can get it made, whatever “it” is.  That is why PassageMaker is there, so that if you are forced to do business with Chinese suppliers, you have an advocate that understands your concerns and requirements, and has your success as our primary objective.

However, when the IT team is motivated to re-post a sales brochure to freshen up the homepage, I guess that is a sign I best get moving on the blogging front.

I will try to re-establish my blogging discipline, with at least a few posts per week.

In the meantime, here is the article that got me off my duff (hat tip to Dan Beach, aka, “Canada Dan”):

China’s ‘miracle’ Shenzhen marks 30 years.  I first visited Shenzhen in 1994 and at the time never imagined it would become my second home.  How different it is today than the ugly, gray city 16 years ago.  China has a long way to go, but the distance it has traveled has been astonishing.

Other fun stuff:

• MSNBC – Clinton says world must respond to N. Korea
• Financial Times – US warns over Beijing’s ‘assertiveness’
• DER SPIEGEL  – Interview with Economist Nouriel Roubini: ‘We Will Have Even More Crises in the Future’ (hat tip Matt)
• Real Clear Politics – Depression 2010? (whether you agree with him or not, this future is not clear or bright – there is much excitement yet to come I fear)
• Reuters – Factbox: Sources of tension between China and the U.S.
• Reuters – China and U.S. look to close world’s biggest trade gap
• Reuters (again) – Clinton avoids China disputes, hands out teddy bears (avoid confrontation and carry a teddy bear – not exactly what the Teddy for whom the bear is named advised, but then he never had to deal with being in debt to your competitors)
• CNBC – US Plays Down European Crisis but China Worried (as they should be)
• USA TODAY – Private pay shrinks to historic lows as gov’t payouts rise (that’ll work)
• Reuters (yet again) – How Greek debt crisis could save America (God, I hope so)

Maybe get to some travel blogging tomorrow.  Or not.  You’ll have to check back to see.

And by this weekend, I mean most all of it, Friday, Saturday, Sunday and Monday morning.  Friday and Saturday were hot and humid, but Sunday was the gauntlet.  Day started early, hot and humid and ended in a cold rain at 1:00 AM Monday morning.  I had some work to do and did not get to sleep until 2:30 AM, back up at 6:00 AM to help them finish before the deadline of 9:15 AM (which we made by 5 minutes).

Why am I telling you about this, a blog ostensibly about China Business and my impressions thereof?  Two reasons:

1. I am a slightly overweight and out of shape 39 years old.  I like to drink more beer than I should and my Room 101 is a gym.  I have never been a good athlete, I have a bad back, so bad I had to wear a brace 24/7 for several years as a teenager.  And though today I am sore all over, my legs and my back feel far better than I’d expected.  I credit my TrekDesk.  I’ve mentioned TrekDesk before (here and here) and I walk several miles a day at an aggressive 8 degrees of incline at 2.2 mph, which will get your heart pumping.  I had not realized how well it had conditioned my legs and forced me to improve my posture.  Walking while you work really does rock.  I mention this because as I have blogged before, the TrekDesk is one of the best examples of our complete system of services – engineering by our Endorsed Service Provider, Contract Engineering Services; then Sourcing Feasibility Study, next Vendor Coordination and now Assembly-Inspection-Packaging at our Assembly Center according to the customer approved Product Quality Manual.
2. The USA’s trade deficit with China is almost universally viewed as a bad thing.  But the low-cost goods China provides to the USA consumer is a reminder that any transaction has benefits for both sides.  As I moved my friends’ copious amount of stuff, I was struck by how much of the contents of their home (and indeed, any American home) are now Made in China.  When I was growing up, I do not remember having that many clothes.  That is not to say I went about in rags; quite the opposite, my Father was successful and I had a wonderful childhood.  I just don’t remember having anywhere near the sheer volume of clothing my friends’ children had.  Today I have five (5) pairs of shoes.  I actually make a game of trying to minimize the amount of stuff I drag around with me – Exhibit A being the extended trips to China with one (1) carry-on bag.  Looking around my own house, each of my children has at least twice as many pairs of shoes as I do.  All are Made in China.  The prices paid for those are astoundingly low, even to me who has an idea of what they cost ExW.  While I am rightly concerned about foreign competition as an American manufacturer, it would be dishonest and foolish to say that there was no benefit to the American consumer from our trade with China.

All for today, much catch-up to do having lost the weekend.  It continues to rain soup, new opportunities daily.  Will try to squeeze in more blogging tomorrow.

Since my return from China two weeks ago, I have been working like crazy trying to bag all the new business raining down on PassageMaker, SafePassage and China Quality Focus.  The world economy is not out of the woods but we are definitely seeing an explosion of new RFQs, led by Australia.  They are booming exporting the raw materials for China’s industry.  Let’s all raise our glasses to Australia!  More on that later…

I have been picking away at the travel log in my minimal spare time, but here are some interesting articles (some a bit old, but nonetheless).

• Nixon wasn’t so bad after all – USSR planned nuclear attack on China in 1969 – and Tricky Dick stopped World War III.  This is the kind of stuff you do as President that you can’t talk about, you have to hope historians get it right.
• From Instapundit, a link to great blog about Japan, Ampontan.  Today’s post is called Lame and Shameless, about ridiculous Western reporting on Japan.  I am reminded of Andrea Martins, our representative in Brazil, who was actually born and raised in Beijing, the first and only Caucasian I’ve met who truly speaks native-level Mandarin.  She told me once that if you visit China for a week, you can write a book.  Stay for a month, you can write an article.  Live there for 25 years, you have nothing to say.
• Every once in a while you need to remind yourself how utterly insignificant you really are – Jupiter loses one of its stripes and scientists are stumped as to why.
• Every once in a while you need to remind yourself how great your life really is – N.Korean women up for sale in China: activist.  Tragic and terrible.  I hope China steps up.
• Interesting article from Mother Jones.  Yes, really.  The Last Taboo.
• The New York Times finally realizes that many jobs aren’t ever coming back – The New Poor: In Job Market Shift, Some Workers Are Left Behind.
• Speaking of vomiting…U.S. posts 19th straight monthly budget deficit.  (hat tip to Dave Learn)
• Dear God, let’s hope so – N.J. gov. sets tone for US – I have heard Christie speak, and it is QUITE refreshing.  He sounds like a no-nonsense CEO sent in to save a company on the ropes.  Math doesn’t lie.  There is no money tree.  You  have to cut spending.  However, if you could just raise taxes on The Real Housewives of New Jersey and leave the rest of the state alone, I think you could sell that.  My God, what tacky people.  The rise of China should be seen as largely a good thing, and maybe the Chinese economy will grow larger than the USA’s, but that was never a foregone conclusion.  Our current political leadership across the board seems hellbent on making sure it happens ASAP though.  As someone who has business interests in both USA and PRC, I just wish the USA would quit shooting itself in the foot.  We businessmen would be just fine if we knew from one day to the next what was coming out of Washington.
• Globish – I love it.  What a great word.  And the author nails it; I have had similar experiences many, many times in the Chinese-speaking world.
• And finally, I can’t resist – Dog on the menu for Chinese astronauts.  Actually, dog is pretty tasty, though I’ve only had it prepared in Korean restaurants in China, so I haven’t tried the Chinese version.  Have to put that on the to-do list.

This got me thinking about what a bargain USC was.  I got an MBA ten years ago for around $1600 per semester.  Contrast that with the graphs in this WSJ article.  An 80% increase in one decade.  Really.  I am starting to think education might be the next bubble that pops.

As I wrote about in my previous post on the subject, with the US economy in the tank and government borrowing and spending with historic abandon, young graduates should at least consider looking outside of the USA for job opportunities.

If you are interested in an internship in China, feel free to contact us with your resume.

Many young souls seem to want to be bankers or lawyers, as though these are highly lucrative careers that guarantee a sweet life in the Hamptons.  Certainly they can, but most bankers and lawyers slog along without ever making the big bucks.  Moreover, they are careers without a real product that you can point to and say “I made this”.  I tried explaining there are no safe corporate career paths anymore, and believe me when the cost cutting starts, they start in middle management.

I remember reading an article written by a British MP maybe 20 years ago that has formed part of my philosophy ever since.  At the time he was writing about the challenge posed by Japan to the British manufacturing base, what was left of it anyway.  I am going from memory and as the article predated the internet, I have had no luck finding it.  But the quote went something like this,

British Leyland did not go out of business because of the Japanese.  It failed because it made dreadful cars.  Our economy today is almost entirely based on people in London trading bits of paper.

Real economies make things.

Did this make anyone substitute “Chrysler”, “Chinese” and “Lehman Brothers” in their heads?

The issue has been much debated of late about whether China’s economy is a bubble, perhaps the greatest bubble of all (see here, here, here, here, here and here).  Certainly the yuan is undervalued.  Certainly much of what you see in the Chinese cities is pastiche – empty buildings abound in any major city.  There is vast overcapacity in many industries, driven by cheap loans from government banks to drive development and keep unemployment manageable, similar to the government role in the Japanese and Korean economies during their early growth periods.

But my mind and my gut keep coming back to that quote from the Brit – “real economies make things“.  There is real manufacturing know-how in China and it grows stronger daily as they gain more experience.  The infrastructure and man-power are real.  These are not paper assets that vanish in the blink of the eye like the billions lost in the last two years in the USA.

Does the Chinese economy need to make adjustments.  Yes, indeed it does.  So does the USA.  And as with all things, we will all be forced to one way or the other.  But the knowledge gained in this Chinese industrial revolution will persist and remain a real asset even if the bubble does burst.  Japan is still the #2 economy despite 20 years of stagnation.  They have not fallen back to the misery of late 1940′s.  I am confident China will survive as well, even with their monumental challenges.  They have come so far in 30 years, I just don’t see them giving up, and when the world economy does recovery, they will still be the largest source of low-cost manufacturing capability on the planet.

And future bankers of America need to remember it is a whole lot easier to move a financial center than the infrastructure required for manufacturing.

PS – If you have never watched Top Gear, I highly recommend it.  The 30 minute episode on British Leyland is well worth your time, if only to remind yourself of how awful cars used to be.