Posts

In Chinatown, Sound of the Future Is Mandarin

/0 Comments/in /by

Fascinating article on the switch to Mandarin from Cantonese in American Chinatowns from the NYT. One of the accomplishments of the PRC has been universal Mandarin instruction, providing the country with a standard dialect for the first time in its history. American multiculturalists undervalue universal English – one of the reasons India lags behind China is the lack of a truly common tongue. Hindi is not even 50% of the population, and English a distant second. Though China has a multitude of dialects, the younger generation in China have all been taught Mandarin, providing a solid foundation for economic growth.

Now if only Mandarin were a straightforward, non-tonal, alphabetical language!

Mike Bellamy knows his stuff (part 2)

/0 Comments/in /by

For anyone thinking of doing business in China, please listen here for an excellent interview with PassageMaker founder Mike Bellamy. In this interview, he focuses on practical measures to protect your Intellectual Property (IP) when dealing with Chinese suppliers.

PassageMaker has years of experience protecting our clients’ IP, including filling Chinese patents and trademarks using our Endorsed Service Provider for legal services, Ms. Li Yan of the JunZeJun Law Firm. All of our core service offerings – Sourcing Feasibility Studies, Vendor Coordination, Assembly-Inspection-Packaging, Factory Formation – were developed with the primary goal of IP protection.

And don’t ignore protecting your design in your home market. For our American clients, we recommend Michael Mann and Todd Serbin of Nexsen|Pruet.

If you’ve spent the time and money to design the product, why would you not take every effort to protect it from theft? Contact PassageMaker and let us show you how to successfully and securely manufacture your product in China.

They levelled the playing field

/0 Comments/in /by

There has been lots of ink lately about Mao the “political philosopher”. I won’t get into that other than to say that if any one person deserves credit for China’s economic transformation over the last 30 years, it is Deng Xiao Ping, not Mao.

It was either Mr. China or China Road (both wonderful books) that pointed out why China’s business environment was able to change so rapidly. For better or worse, the Maoist era had wiped away the old entrenched power structures, including family business empires, and also eliminated most of the atrocious sexism of traditional Chinese culture. Whichever book it was made the comparison to Indonesia and India, where business was tightly controlled by family conglomerates and outsiders had far less opportunity to set down roots, to say nothing of the limited role of women in the economy.

Though it is a gross oversimplification, and does not address all the things that went wildly, tragically wrong during the first 30 years of the PRC, Deng did have a “level playing field” to start with. If you are going to re-light the entrepreneurial spirit of the Chinese people and try to attract foreign investment, starting from nothing is actually an enviable situation.

I am often asked about India. With English widely spoken, the British legacy, democratic government, etc., it seems a better choice for business. The Dragon and the Tiger have the world’s rapt attention, but for manufacturing, the choice so far has clearly been China. I’ve seen figures quoted that China has 10 times the number of factory jobs as India despite comparable populations. And I’ve had Indians tell me the reason they are trailing China is because they have so much cultural baggage, whereas China is in some ways like a new country. This article in the BBC about the beating of ‘witches’ in rural India is a good example of the press that makes investors hesitate. [Note – I admit I have never been to India and know next to nothing about it other than what you can read in a book or newspaper. My sister travels there regularly, and through a family business, we’ve been doing business there for decades, but I have no personal experience to draw on.]

Expatriates often lament the hyper-capitalist zeal of the new China. Indeed some of the Chinese I meet lament it as well, which accounts for the rebirth of religion in the officially atheist PRC. But I find the rule of the almighty RMB reassuring in way. Capitalism at least has clear incentives and bridges cultures.

It is not for nothing that China is referred to as the new ‘Wild West’. Mike Bellamy was one of the few white faces in town when he arrived in Shenzhen in 1998. The positive and open business climate allowed him to put down roots and PassageMaker was born. And while we have long-term plans to expand into India (PassageMaker-Mexico will be first, perhaps in 2-3 years), China will remain the core for years to come. Our services – Sourcing Feasibility Studies, Vendor Coordination, Assembly-Inspection-Packaging, Factory Formation – are all designed to help clients succeed and thrive in this crazy boom town that is China.

Trade Show Season 2009 is different

/0 Comments/in /by

In years past, the China trade shows were dominated by American buyers. What we’ve seen at the trade shows in April 2009 and so far this October is an increase of attendees from the developing world. It is not for nothing that PassageMaker opened our first two satellite sales offices outside of the USA in Mexico and Brazil.

This article from the NYT provides a good overview of the current situation. Key paragraphs:

As throngs of prospective buyers swarmed the exhibitions, equal to five times the floor space of the Empire State Building, Chinese exporters were upbeat. By keeping China’s currency, the renminbi, tightly yoked to the weak and weakening dollar, Beijing had made Chinese exports increasingly competitive around the world.

“We are very confident,” said Liu En Tian, the marketing manager of the Huasheng Jiangquan Group, a manufacturer of ceramic tiles in Linyi City. “Already the buyers who are coming this morning are more than last year.”

Like those of many Chinese manufacturers, his company’s exports fell by nearly half last winter because of the global economic slowdown, but they are now down only 20 percent from their peak more than a year ago because of a surge in sales to South America and the Middle East. “The economy will get better very soon” around the world, Mr. Liu said. [ed. – emphasis added]

While Washington seems hell-bent on borrowing / printing / spending money in reckless abandon, almost as though they want to destroy the dollar and the rest of the USA economy (much to the horror of American businessmen like me), other markets around the world are recovering quite well. It seems that many nations know that Keynesian economics is bunk without having to try it out each and every generation.

I’ve avoided commenting on the decline of the dollar, mainly because it feels like commenting on a slow motion video of a train full of children hitting a bus load of nuns, but as a global company PassageMaker is working daily to position ourselves to take advantage of the global rebound. We have sales representatives in Mexico, Brazil and Europe and are interviewing for sub-Saharan Africa, India and Australia. Like it or not, China is a global player and PassageMaker is well positioned to help our clients succeed in China. Please contact us an let us know how we can be of assistance.

Consultants are a waste of time and money

/0 Comments/in /by

Today my state and federal tax returns were due. I paid my (substantial and onerous) estimated taxes back on April 15th, but extensions were filed to finalize some deductions and so today was also tax day. Oh, the rhapsodic joy of having two tax days this year! Everyone should be so lucky.

Despite being assured by my accounting firm on 14 October that no additional taxes were owed, when I got the call to come pick up my return on 15 October – that is one (1) day later, for all you mathematically-challenged, overpaid tax professionals out there; e.g. 15 – 14 = 1; take off you shoes and socks if you need help counting – I was cheerfully informed that I owed a rather large amount of money because they made a mistake. Turns out that instead of actually reviewing the data I gave them around 6-8 months ago, they made some “assumptions” which proved false when one of these aforementioned tax professionals actually looked at the numbers on the day the return was due. Somehow, I always assumed accountants were the nerds who did their term papers a month in advance. Go figure.

Needless to say I had a grand time running to the banks and post office between 3:20 PM when I actually got the returns and the 5:00 PM mailing deadline. Of course I had nothing else scheduled for today. Nope, nothing at all. These fine professionals had my information for the better part of a year and managed to get my taxes to me on the day they were due less than 2 hours before the deadline, with a surprise bill to double the fun! Talk about customer satisfaction!

In case you were wondering, I fired them today.

This accounting firm loves to tell people all about their business consulting services, supposedly the best around. Today’s miserable, arrogant, incompetent performance stacks up with most of my experiences with consultants over the years. Expensive, time-consuming and ultimately an infuriating waste of time and money. Thus the harsh title of this post.

Selling PassageMaker’s services is engaging and thoroughly enjoyable, but it is time consuming because our services really don’t fall into any of the normal definitions. We perform assembly and light manufacturing, but we are not a manufacturing company. We help clients do business in China but we are not a trading company. We never take ownership of the physical product, so in a sense we are not even a supplier. Our core services – Sourcing Feasibility Studies, Vendor Coordination, Assembly-Inspection-Packaging, and Factory Formation – are simple in concept, but so flexible in practice that there are a thousand ways they can be customized to serve the customer’s needs. We want to fulfill the client’s operational requirements in China; to identify, establish and manage the client’s supply chain, so that there’s a tangible service provided that adds real and quantifiable value.

Because PassageMaker falls outside of recognized business models – indeed, in my experience we are unique – prospective clients sometimes refer to us as “consultants”. Oh, how I recoil from that label. As someone once put it, “a consultant is someone who will tell you the time of day by showing you your own watch”. Shoot me if I ever fit that description.

While it is time-consuming to explain the full scope of our services, the philosophical foundation – Trust & Transparency – resonates with our clients. Many of our clients have been through the wringer in China, and our open pricing, commitment to customer satisfaction and quality of service are a breath of fresh air.

Yes, we sell a set of services, not a product per se, and that may seem like what a consultant does, but we are NOT a consulting firm. Them’s fighting words.

October is Global Sources Trade Show Month!

/0 Comments/in /by

With the China National Day holiday behind us, the trade show season starts and Mike Bellamy will be in Hong Kong hosting Global Sources’ China Sourcing Fair’s Buyer Education Conference as well as holding separate seminars on issues of Vendor Coordination and Intellectual Property Protection. You can find information on Mike’s seminars here and here.

PassageMaker and China Quality Focus will also exhibit at the following booth #’s on the following dates:

10/12 to 10/15 PassageMaker booth 5B34

10/20 to 10/23 PassageMaker booth 10L38

If you are in the area, please attend a conference and visit our booth. Also, we encourage all clients to take a half a day and pop across the border to visit to our facilities in China. Seeing our offices and Assembly Center will be much more rewarding than a quick visit at the show. Let us know if you need assistance making travel arrangements, and hope to see you in Hong Kong!

Why I don’t brew beer (anymore)

/0 Comments/in /by

20 years ago I wanted to be a brewmaster. The American microbrew movement was just taking off, and it was a good time to get in. I attended beer festivals, visited breweries, did research (in the days before the internet no less), etc. Ultimately I had two banker’s boxes full of information on techniques, equipment, business models, etc. Today this would occupy about 5% of the free flash drive you got for opening your checking account last year, but this was 1989, and paper was still state of the art. And I still have all this information, thank you very much.

I used this copious research to sell the idea of a brewpub to two entrepreneurs opening a new restaurant in a location I had long had my eye on. It was tremendously exciting being even obliquely involved with the start up and I enjoyed working there as an assistant brewer. As great learning experience all the way around, and should either of those entrepreneurs read this, thank you sincerely for the opportunity.

And what I ultimately learned from that experience was I did NOT want to be a brewer anymore. Beer from the store is just fine thanks.

Now, onto the tortured analogy section. Many of our clients are new to doing business in China. Many have done awesome amounts of research, days spent on sourcing websites like Global Sources, and they are totally jazzed about this new experience, much as I was 20 years ago. They want to travel, try new things, etc. Then they realize that the China trade is work, and the fun wears off quickly.

There are brewers who get up every day excited to go to work and make beer. I admire them and wish them well at their chosen craft. Thanks to them, I get to have a drink without all the scalding water, acids, caustic sodas, foul-smelling slime and general hard-work-nastiness that goes into making beer.

The PassageMaker Team and our friends at China Quality Focus are a collection of such dedicated “brewmasters”. I know I wake up every morning happy and enthusiastic about my chosen field. Our Sourcing Feasibility Study, Vendor Coordination and Assembly-Inspection-Packaging service offerings are all designed to help our clients have a successful experience in China. Most importantly, we want to take care of things on the ground in China so our clients can stay at home with their families, instead of spending $10k every other month traveling back and forth to visit vendors. When you do choose to come to China, we want you to come for a relaxing guanxi tour, not to fight fires. We’ll even help you with your travel arrangements and buy you a drink!

Our new partner in Brazil, Andrea Martins of OverChina

/0 Comments/in /by

I am thrilled to announce that PassageMaker now has sales representation in Brazil. Ms. Andrea Martins, co-founder of OverChina, has joined the team, representing PM, China Quality Focus and SafePassage.

Ms. Martins has more than 25 years experience living in China, and has an impressive academic and professional resume. Here she is discussing the 60th anniversary of the PRC on Brazilian television (in Portuguese). Thankfully for me, she also speaks fluent English.

The PassageMaker web team is working to update our website with bios for our global sales team, something I hope to have up within the next two weeks. Short post tonight – computer trouble. More later…

There’s no General Tso’s Chicken in China

/0 Comments/in /by

071010 maojia 3 300x239

This is one of Mike Bellamy’s favorite sayings. And there really isn’t any General Tso’s Chicken in China. And conversely, KFC in the USA thankfully, wisely does NOT serve that weird breaded, fried ground shrimp burger thing with the chunks of pepper and kernels of corn with the sweet mayonnaise…ick. And this is an ick from the guy who really, truly loves Chongqing style Pig’s Brain Soup.

This points to the distorted lenses through which different cultures view each other. General Tso’s Chicken is as far from a Hunan dish* as you can get. Yet it is probably the most famous “Chinese” dish in America. Some years ago I was dining at the local “Chinese” restaurant (normally I avoid such places, but my Father enjoys the lunch buffet). This place is owned by a great family from Taiwan, my much beloved second home, and I know they cook the good authentic stuff for themselves, but like every “Chinese” restaurant in small town America, they play to (their perception of) local tastes. Which, sadly, means sweet sauces, deep fried everything, overcooked vegetables**, copious amounts of cornstarch to fatten you up, Uncle Ben’s grade “rice”, “hot” dishes that aren’t, etc. Not the worst stuff in the world, but when you know what the real thing tastes like, it’s always disappointing.

As I was making my way around the buffet the restaurant was suddenly overrun with school aged children, maybe 5th grade. I asked one of the chaperons what was going on. Turned out to be a field trip from one of the local public schools; they were studying China that week and this was part of their education. I reflexively said, “这菜不是中国菜，是美国菜”; she was quite taken aback to hear me speaking Chinese, but even more so when I translated, “this isn’t Chinese food, this is American food”.

These cases of cultural myopia are fun when discussing food, but they can be dangerous when you start throwing money around. I am astounded by some of the assumptions people have about China, ranging from charming naivete to stunning ignorance. I’ll be the first one to admit China is getting easier to work with all the time, but that’s only in comparison to how difficult it was in the past. It is still a very foreign place.

PassageMaker was founded to help foreign companies be successful in their dealings with China. I tell all my clients, if you can satisfy your customers by making the product in your home market, please do. If you don’t have to source in China, don’t. Doing business in China is difficult and slow and never as inexpensive as it is advertised. But the reality is, in many cases, China sourcing is required to succeed in the market. It is still the place where the “world price” gets set.

Our core services – Sourcing Feasibility Studies, Vendor Coordination and Assembly-Inspection-Packaging – are all designed to help our clients access the advantages of China without exposing their intellectual property or otherwise getting ripped off. Mike and I have been doing this a while and we’ve made the mistakes and learned the lessons for you. If your project requires China sourcing, leverage our experience to make it a successful venture.

Notes:

* Hunan cuisine is one of my favorites, and is hot and spicy without the horrendous, toxic heat of Sichuan cuisine. This is one the best Hunan dishes, chili shrimp skewers, and you eat the shells, much like soft-shelled crab. We typically go through 3-4 plates of these at a sitting. Perfect with a cold beer.

071010 maojia 3 300x239

**Vegetable dishes are what I miss most in China. I’ve become reasonably proficient in recreating my favorites at home. Here’s my recipe for Spinach with Garlic and Sesame Seed (it’s my blog and who said we had to talk business all the time?):

8-10 oz spinach leaves (1 big bunch washed and trimmed or 1 bag of baby spinach leaves in the salad section works perfectly)

6-8 cloves of garlic, smashed and chopped coarsely

3 tbsps peanut oil

2 tbsps toasted sesame seeds (toast yourself by dry frying in the wok or buy them pre-toasted at any Asian grocery store)

1/4 tsp kosher salt

Heat the oil in a wok, add salt and garlic when hot, stir fry quickly and don’t burn the garlic. Add spinach (best to rinse and dry as much as possible in a salad spinner) and stir fry until leaves are wilted. Add sesame seeds, toss to mix and serve immediately.