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And the wall came a-tumblin’ down…

Twenty years ago today the Berlin Wall fell. I remember being in joyful shock, not entirely sure what it meant, but knowing that it was good. My parents remember where they were when JFK was shot; I remember the juxtaposing endpoints of the Cold War in 1989 – the political repression of Tiananmen in June (later followed by the economic freedoms that have created the modern China), and the collapse of the Evil Empire that began with the fall of the Berlin Wall.

1989 was indeed an amazing year to be alive. Ross Douthat has an excellent op/ed in today’s NYT (free registration may be required):

For most of the last century, the West faced real enemies: totalitarian, aggressive, armed to the teeth. Between 1918 and 1989, it was possible to believe that liberal democracy was a parenthesis in history, destined to be undone by revolution, ground under by jackboots, or burned like chaff in the fire of the atom bomb.

Twenty years ago today, this threat disappeared. An East German functionary named Günther Schabowski threw open his country’s border crossings, and by nightfall the youth of Germany were dancing atop the Berlin Wall, taking hammers to its graffiti-scarred facade. It was Nov. 9, 1989. The cold war was finished.

There will be speeches and celebrations to mark this anniversary, but not as many as the day deserves. (Barack Obama couldn’t even fit a visit to Berlin into his schedule.) By rights, the Ninth of November should be a holiday across the Western world, celebrated with the kind of pomp and spectacle reserved for our own Independence Day.

Never has liberation come to so many people all at once — to Eastern Europe’s millions, released from decades of bondage; to the world, freed from the shadow of nuclear Armageddon; and to the democratic West, victorious after a century of ideological struggle.

Never has so great a revolution been accomplished so swiftly and so peacefully, by ordinary men and women rather than utopians with guns.

Twenty years later, we still haven’t come to terms with the scope of our deliverance. Francis Fukuyama famously described the post-Communist era as “the end of history.” By this, he didn’t mean the end of events — wars and famines, financial panics and terrorist bombings. He meant the disappearance of any enduring, existential threat to liberal democracy and free-market capitalism.

This thesis has been much contested, but it holds up remarkably well. Even 9/11 didn’t undo the work of ’89. Osama bin Laden is no Hitler, and Islamism isn’t in the same league as the last century’s totalitarianism. Marxism and fascism seduced the West’s elite; Islamic radicalism seduces men like the Fort Hood shooter. Our enemies resort to terrorism because they’re weak, and because we’re so astonishingly strong.

Starting in 1993, my family company began a relationship with an excellent plastics company in Plzen, Czech Republic that lasted for 12 years. I had the pleasure of visiting Czech that year when Prague was still new to the West, and had I not visited Singapore and China the next year, I might have made a career in Europe. PassageMaker now has a growing sales presence in Europe, led by Marc Brzezinka and Julien Roger (Managing Director of our sister company China Quality Focus), and we expect to have at least one rep based in Eastern Europe soon.

I occasionally hear commentators in the USA talk about “Communist China”. While China is a one-party state, I have a good laugh whenever I hear that. China today is more capitalist in many ways than the USA, and Shenzhen, our corporate home, is the most capitalist city of all. While the marriage is imperfect, the relationship between the USA and PRC is nothing like the Cold War, and thank God for that.

My first time with Singapore Chicken Rice

Yes, more food-borne analogies to ruin your day, dear reader. Hey, it’s Sunday.

My first 24 hrs in Asia in 1994 changed my life. I knew instantly I was hooked on Asia’s dynamism, the very excitement of just walking down the street in a part of the world so obviously on its way up, but it was the food that sealed it. Prawn Mee Soup with fish balls was the first meal I had on that summer night 15 years ago, and I still eat my homemade version at least twice a week.

But the signature dish of Singapore is “Singapore Chicken Rice”, more properly Hainan Chicken Rice, hǎi nán jī fàn, 海南鸡饭, from the Chinese province where the dish originated. And while I have it regularly whenever I am in Asia, I had never braved it on my own until a couple weeks ago. Now I must admit I cheated and used a box mix given to me over a year ago by my friend, a professor in Singapore. Despite under-cooking it the first go round and having to re-poach it (which made a colossal mess), despite using the wrong kind of rice, it was… not terrible. In fact, it was pretty darned edible!

So emboldened by my partial success, I pulled out the cookbooks with the dauntingly complex recipes. What had before seemed impossible now made sense. I tried it from scratch this past Sunday, no spice mixes or packaged sauces and everyone loved the results! I’ll keep trying different types of rice and with each attempt refine ‘my’ recipe, but I am no longer intimidated.

One of the reasons I enjoy cooking is the creative aspect, but as an operations guy, I also enjoy the process. A recipe is essentially a set of work instructions, usually poorly written. They leave out steps, get seasoning wrong, cooking times off. I usually have to make something 2-3 times before I know how it should work. The cookbooks are only the roughest guide.

One of PassageMaker’s greatest strengths is our ability to write solid bi-lingual work instructions that capture those critical nuances that make an assembly process actually work. The differences between a successful product and a warranty claim are minute – a torque setting here, an adhesive application there – but they are critical. When your money is on the line, don’t you want a team that knows how to cook and write a good recipe?

Responding to concerns about patriotism

I received a very interesting email from a prospective client. He is concerned that the Americans working for PassageMaker have lost their patriotism for the USA.

This is an interesting conundrum. How do you promote business in China, without seeming to run down your home country?

Here is my [edited] response for what it is worth:

Thank you for your email. All of us at PassageMaker look forward to working with you.

I appreciate your feedback vis-a-vis patriotism. I cannot speak for Mike and Brian, as they have both married into China as it were, but I can tell you that I consider [it PassageMaker’s role to help American businesses] remain viable.

I spent most of my life in the US automotive industry, and the corporate buyers began pressuring us in the mid-to-late 1980s to move production, first to Mexico (after 6 trips to check it out, we decided to pass); to eastern Europe (we had a great 12 year relationship with an excellent supplier in Plzen, Czech Republic); to the Asian Tigers (we started sourcing in Taiwan in 1991 and I lived in Singapore in 1994); and now to China. Left to ourselves, we likely never would have moved anything anywhere.

PassageMaker recognizes that outsourcing is a sensitive subject with many clients, but the sad reality is that buyers expect a “world price”. Having worked in manufacturing for over 20 years, starting with my first job in a machine shop at 14, I know that sometimes American companies can deliver that price. I know my company in Virginia does just that. But many companies, especially start-ups, cannot. They don’t have the tooling, equipment or expertise in place to meet the expectations of the market.

China has a role to play, and that is where PassageMaker comes in. Our goal is to help foreign companies be successful in their dealings with China. If by helping an American company successfully manage their China supply chain, I can make the USA operation more profitable, everyone wins.

While the economic and political environment in the USA are causes for great concern, I agree with your assessment of America [as the exceptional and indispensable ‘city on a hill’ with its best days ahead of it]. It is why I live here.

PassageMaker intends to be a truly global company, with Assembly Centers in every major market. PassageMaker-Mexico will likely be next, but PassageMaker-USA is also on the list. We already have sales presence in USA, EU, Mexico and Brazil [with Asia, India and Africa on their way]. We want to be able to offer a comprehensive supply chain solution, including the option to assemble or complete manufacturing in America, regardless of where the core components are made.

I appreciate your concern and would be happy to discuss this further. Please feel free to call me on my cell.

Whether or not this prospective client takes me seriously has yet to be seen, but my email was sincere. I take no joy in the apparent slow death of American manufacturing, but I also do not think I am the one doing the killing.

Good suggestion from Dan

Short post tonight.

Dan Welygan, who worked in our Shenzhen office for 4 years and is now back on the team as the sales representative serving Oregon and Washington, sent me a link to the China Law Blog. Thus far looks like a good read.

Another good China business blog is our friends at Silk Road International. Both well worth the time.

How I survived China

Great article sent by a friend in DC on the health hazards of living in China. A few things that stuck out:

1 – Micro-particulate pollution – in terms of the human cost, this is more concerning than CO2:

Another way to know this is via a clandestine air-quality station that the U.S. Embassy has built in Beijing. The Chinese government does not report, and may not even measure, what other countries consider the most dangerous form of air pollution: PM2.5, the smallest particulate matter, tiny enough to work its way deep into the alveoli. Instead, Chinese reports cover only the grosser PM10 particulates, which are less dangerous but more unsightly, because they make the air dark and turn your handkerchief black if you blow your nose. (Spitting on the street: routine in China. Blowing your nose into a handkerchief: something no cultured person would do.) These unauthorized PM2.5 readings, sent out on a Twitter stream (BeijingAir), show the pollution in Beijing routinely to be in the “Very Unhealthy” or “Hazardous” range, not seen in U.S. cities in decades.

2 – Despite the pollution, it is a exciting and energizing place to be:

The positive aspect is, there’s a lot to take your mind off your health. “I am amazed at how well people do here, considering,” another Western-trained doctor said. “It is an exciting place. It’s a historic time. People seem to feel alive.” That made sense when I heard it—in China I had felt terrible, but alive—and makes me say that foreigners who want to go should not be deterred.

3 – Drink beer:

…I naively drank bottled water in a Buddhist-run vegetarian restaurant—and on the way out saw a waiter filling the “Evian” bottles from a hose.

Point 1 is dead on – the air is toxic – but the trade off (for expats anyway) is Point 2. The minute I landed in Singapore in 1994 I knew I had found my path. Asia, and Chinese Asia in particular, became my focus. It is still exciting today. I imagine London in the Victorian era, NYC in the 1920’s, LA in the 1950’s, etc., were also as exciting (and polluted). Can China fix this? Of course, and they will as their economy develops. As I’ve said before, modern environmentalism is a luxury good.

Mike Bellamy went to Asia the same time I did, and he’s been there full time since 1998, and the excitement has not worn off. Most of the expats on the PassageMaker team have put down roots. We have real bricks-and-mortar in place. So if you need something done in China, rest assured that we are experienced and motivated to make your project a success.

And Point 3? Beer, especially from the large export breweries (many foreign owned), is safe to drink, because it is bottled, capped, carbonated and alcoholic. Chinese beer is served in large recyclable bottles, but the nature of the brewing and bottling process means that if it makes it to your table, it’s clean. All the water is purified as the first step in brewing, otherwise you foul the fermentation. Were it biologically contaminated, it would result in a burst bottle from the build up of gasses. Also, Chinese beer is relatively low in alcohol, so having a beer with lunch is not going to ruin the rest of your day.

When in doubt, have a beer.

What must the Chinese think of Halloween (to say nothing of Mardi Gras)?

Well, finally recovered from Halloween. Kids had a great time, as did the adults. And yes, ALL of the store-bought costumes were Made in China. How odd it must be to mass produce accoutrement for another country’s holidays. What would an American printing company think if it were asked to print ghost money or bake moon cakes for China?

One of our sales reps, Allan Tsang, directed me to this film, Mardi Gras: Made in China. I’ve only seen the trailer (and it is NOT SAFE FOR WORK), but I will have to track down the full version pronto. And not for that reason. Get your mind out of the gutter.

How bizarre and fascinating that the currency for drunken debauchery and exhibitionism (which also fuels the Girls Gone Wild DVD empire – and no, I will not provide a link) are plastic beads made by earnest teenaged factory workers half way around the world in Fuzhou Province. What a world.

More thoughts on coal

070116 shunde

Here’s an interesting article from my home town paper, The Roanoke Times, on the new carbon capture technology being tested at a power plant in West (By God) Virginia. The technology is interesting to me, especially since I once considered becoming a geologist, but this is the part of the article I found most interesting:

[Mike] Morris [Chairman of American Electric Power (AEP)] and a host of others stressed Friday that coal will fuel power generation for decades to come, both in this country and many others. He said AEP agrees there is enough evidence to believe there is a link between human activity and climate change. But he said the United States has “the financial and technical wherewithal to address the issue.”

Some environmental groups encourage carbon capture efforts such as the one at Mountaineer. Others ask tough questions.

John Steelman is program manager for the Natural Resources Defense Council’s Climate Center.

“We support the use of carbon capture,” Steelman said Thursday. “We believe that for the next few decades the United States and other countries, including China, are going to use coal in significant quantities.”

And this is a critical time, he said, to limit emissions of climate-changing greenhouse gases.

John Blair is president of Valley Watch, a small environmental group in Indiana whose primary focus is the lower Ohio River Valley. The organization has fought coal-fired power plants since Valley Watch’s founding in 1981.

Blair said he has been following the development of the carbon capture and storage system at Mountaineer.

“The Alstom technique is kind of fascinating, I must say,” Blair said. [ed. – emphasis added]

The first thing that made me pause was the assertion that the USA can afford this. As someone who’s still living with campaign commercials for the Virginia’s Governor’s race, the cost of electricity is a MAJOR issue on people’s minds. As a business owner that gets 100% its power from AEP, the cost of coal fired power has a definite and immediate impact on the bottom line. I am all for energy alternatives, but let’s take off the rose colored glasses about the costs involved.

I am also interested to see somebody finally acknowledging that China (and India) are going to use coal because it is what is available and affordable (front end cost, not a nearly impossible to calculate “environmental cost”). Whether or not carbon sequestration works or is applicable in China on a large scale is something to watch. I would like to see some rational enforcement of safety in the Chinese coal mining industry (which is flat out horrific) and particulate emissions from Chinese power plants, as that is the immediate driver of the human cost of pollution in China. I am genuinely concerned with the smog in Chinese cities, as our team at PassageMaker (some of my closest friends) live and work in it everyday.

So to brighten your weekend, a lovely photo of the air quality in south China!

070116 shunde

Meet the PassageMaker Sales Team!

My biggest project this year is the development of an international team of sales representatives to promote PassageMaker. While the roster is not complete by any stretch, we have a good start, with representatives in Brazil, Europe, Mexico and the USA. We will be adding more photos and bios shortly, and I will post updates as appropriate.

We are currently seeking representation in India. If anyone is interested, please contact me directly.

I love it when a plan comes together…

Boy, were the trade shows REALLY different this October

I’ve written about this before. Mike Bellamy asked me to avoid politics in this blog. Which is mostly fine, because generally I am sick of politics.

But there are times when it is really, really, really, reeeeaaaaally hard, and this is one of those times. Why? Well, I’ve been going through the follow-ups from the recent Global Sources trade shows and one thing stands out like a sore thumb – the shortage of Americans in attendance.

I’ve spent the last 7 months putting together a group of sales reps to better serve our clients and help PassageMaker grow. We have 8 reps serving USA and Canada (more on the way), but my top priority was to establish reps in key foreign markets – Mexico, Brazil and Europe are already place, and I am working on covering the rest of the globe – but I had no idea this effort would pay off so soon.

Easily 85% of the follow-ups are non-USA leads. In years past, at least 60-70% were American. The reason for this reversal is disheartening. The USA is mired in recession, with a shortage of business credit, rising unemployment, etc.; while the rest of the world is recovering nicely. It does not have to be this way. As a small business owner, it is mighty disheartening to see so much indecision and ineptitude in Washington. When you have no clue what to expect next, caution dictates you batten down the hatches. The economy will not really get going again until people can plan for the future. And the solons in DC haven’t a clue the havoc they are creating.

And that is the extent of my political commentary for today. Have a great weekend.

Superfusion: How China and America Became One Economy

Very interesting podcast sent by Dan Welygan, formerly a project manager for PassageMaker, and now our sales rep covering Washington and Oregon.

I was interested to hear the author’s view of Tiananmen, and it is largely spot on. His story on KFC ignores that they pioneered this Asian-flavored version of an American also-ran for 20+ years in Japan before KFC entered China. He doesn’t understand the historical legacy of Buick in China (it was the car of the Emperor), but he is exactly right about China’s willingness to accept direct foreign investment. India is the prime example of a country that shot itself in the foot by closing off foreign investors. I think many Indians realize this is a big factor in why they trail their rival.

Well worth your time to listen.