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Oh, I want to go to China with you!

I get this all the time from the folks I meet. My response? “No, you don’t. You might want to go to China, but you don’t want to go with me.” Don’t get me wrong, I think China is great in many ways. It is no exaggeration that I love China, even when I hate it. I encourage everyone to go at least once in your life. But the people who say this to me want to visit the Great Wall, the Forbidden City, the Winter Palace, the Temple of Heaven, etc. So do I, since I’ve only crossed the first two off my list in 15 years of travel to the PRC.

“My China” is the industrial south, Guangdong Province, the ‘workshop of the world’. Miles and miles of factories, awful pollution, with precious little else. I grew up in a factory, so to me this is second nature, but it is not the typical haunt of tourists. In a sense this is a shame, as I think people need to see more of how things get made in order to appreciate the world they live in. Factories should be part of the tourist agenda for visitors to China. China’s transformation over the last 30 years is truly miraculous, and the factories of Dongguan are as much a monument as the Great Wall.

Mike Bellamy and I have been privileged to play a microscopic part in China’s development over the last 10 years with PassageMaker, and we are looking forward to the next decade and beyond.

The importance of food (and drink); or learning to love Pig Brain Soup

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Business books aplenty have been written on the importance of guanxi or relationships in China. And most of them are boring, so I won’t add to the pile.

From my personal experiences over the last 15 years in Asia, as a round-eye you build relationships by eating anything put in front of you and drinking too much. And bringing Purchase Orders.

Thankfully, I like nearly everything I’ve eaten in China. I’d traveled extensively in the USA, Mexico, Europe and Africa before I ever set foot in Asia, but my first night in Singapore in 1994 changed my whole life. And the food was what really hooked me. Prawn mee soup, jumbo prawns cooked in a banana leaf and Tiger beer at 2 AM in Newton Circus. I’d never seen any of this food before, didn’t know it existed, never seen a Chinese spoon, never used chopsticks, yet it was all like mother’s milk. I learned to use chopsticks in about 30 seconds, and to this day I eat noodle soup for lunch at least 3-4 days a week. Tiger is still my favorite beer.

From this experience, I’ve become a more adventurous eater (and drinker) than you’d expect for someone raised in Salem, VA. That adventurousness has served me well in China. When you visit a supplier, it is de rigour that you be hosted for a lunch or dinner banquet. Chinese street food is generally light and nutritious (oh, how I miss the vegetable dishes at the little restaurant around the corner from our office), but the banquet dishes are lavish, heavy and designed to show off and feel you out. Oh, and get you blind drunk in the middle of the day. The Chinese eat darned near anything, especially the Cantonese, so get ready for offal, strange ingredients and powerful flavors and scary textures.

If you hold up under this onslaught of unfamiliar cuisine and frankly toxic baijiu, you pass the test and provide your hosts with some entertainment. If you wind up in the hospital from food or alcohol poisoning, it is even more entertaining for them. But if you flat refuse to partake for anything other than religious reasons, you establish yourself as a wet blanket not to be taken seriously.

So what to do if you just cannot summon the courage to drink snake wine or eat pig brain soup? Option 1 – stay home and let the PassageMaker team deal with the vendors. Option 2 – come to China but let us arrange your trip and we’ll make sure you are not exposed to the scarier fringes of Chinese cuisine.

PassageMaker wants to make sure you enjoy your experience dealing with China, even if you never visit. And I frankly want to keep my record for days on an IV and days hungover after a banquet (4 and 5 respectively) intact.

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P.S. – It’s really delicious. One of my favorite dishes. I’m serious.

Sick of China

I’ve been an expat several times in my life, from studies in the UK to stints in Singapore, Taiwan and China. All were relatively short, so my sense of excitement and wonder never wore off. For that I am grateful.

I’ve known expats who stayed away for 15 years or more, and many were counting the seconds until they could return home. They were “Sick of China” (or India, or Mexico, or Japan…you get the idea). The thrill was long gone and the tedium and irritations of daily life – amplified a hundredfold due to their surroundings – were sadly all that remained.

In the last few years PassageMaker has picked up a wide variety of new clients, but the ones that make the biggest impression on me are successful mature companies who have been doing business in China for 15 years or more. Why would a profitable company with that many years under their belt turn to a “sourcing company” like PassageMaker?

If we were just a sourcing company, that would be a valid question. But PassageMaker brings real bricks-and-mortar to the equation and provides a much wider range of services than just sourcing. Our core services – Sourcing Feasibility Studies, Vendor Coordination, Assembly-Inspection-Packaging, Logistics, Factory Formation – are so flexible that we can easily tailor them to suit a client’s requirements, whether providing quality control for millions of dollars worth of electronics or creating a consolidation regime to control VAT and shipping costs. These mature clients see our services as not just a cost-saving move, but as a hassle-saving move. When you talk to them, you can hear that they are sick of the day-to-day attention success in China requires. They just want to go home and have us handle it for them.

Mike Bellamy has been in China full time for 12 years and is happy right where he is. PassageMaker is NOT sick of China, and we will be happy to take over for you whenever you wish.

What makes a successful company?

I saw this piece today that asked when GM could have turned it around. It is just a short blog post, but I read it and the comments with great interest. I’ve owned at least 10 GM cars in my life (I drive one now and think it’s fine but not great), and most bring back great memories, mainly because being young and crazy is fun, regardless of what car you’re driving. Of them all, my favorites were the 1964 Corvair convertible and the 1978 Pontiac Grand Safari station wagon, which my Mother ordered with the custom Corvette yellow paint job (brightest yellow offered), chrome luggage rack, the fake wood trim and fake wire wheel hub caps. The first was the coolest car any teenager could possibly drive, and I loved every second of the attention it earned me (especially from the fairer sex). The second was so blindingly awful it it created its own anti-vibe. Girls were actually morbidly interested in finding out who the lunatic was who drove that wretched abomination. Bad boy image courtesy of horrible Detroit iron.

So it is with great sadness that I consider the mess in which the American auto industry finds itself. It is fair to ask the question of when it all went wrong. For what it is worth, I agree with those that say it was not any one thing. GM forgot to do many small things right, and that’s what’s led to the current predicament.

Excellence is consistent and faithful execution of a good plan. Toyota and Honda are the prime examples of succeeding by paying attention to details and playing a consistent game. GM seems to have been counting on one or two home runs a decade (like SUVs in the ’90s) to keep winning the game, when focusing on the boring fundamentals of building good reliable cars was the winning strategy.

PassageMaker is not about the big play. Quite to the contrary, our team understands that you win by treating every customer with the same level of care and professionalism, that each successfully completed project builds on the lessons learned in previous projects and prepares you for the next one. Continuous improvement is a cliche by now, but that’s really how companies succeed.

The Importance of Trust

I love to read. It is really my only hobby; I never go a minute without a source of new information to occupy my attention. I’m known for taking books to my kids’ soccer games. When they are not playing, I’m reading. This makes a great impression with the other parents. Try it sometime.

So you can only imagine my excitement at the new Kindle 2 from Amazon. The Kindle 1 was a cool idea with awful ergonomics, so I decided to wait. Kindle 2 had it all. I couldn’t wait to order one, but decided to hold off a few months to see how the new device shook out in the market. Buying the first or second model year of a new car is always a bad idea, so I just wanted to be sure.

I am glad I waited. The shake out was poor, but not for the reasons I expected. It has nothing to do with the device, which seems to be fine, but rather with the company selling it. I will not be buying a Kindle 2 (or 3 or 4 for that matter), nor will I ever buy anything from Amazon in the future. Why? First, ‘vanishing’ 1984 and Animal Farm from customers’ devices is so creepy and boneheaded it is a permanent turn-off. Second, a company that would rather sell books to the possessor of a stolen device instead of helping the rightful owner reclaim his property is just not my kind of people.

Forget pulling an Orwellian move on actual works of Orwell for a second (my mind still reels). The removal of the books was supposedly because the sellers were not authorized – in essence that the books were stolen. But had the kid bought a paper book from a bricks-and-mortar book store, paying full price on the assumption that it was a legitimate transaction, my understanding of the law is that unless the true owner comes forward to claim the property, the buyer would have done nothing wrong and would very likely get to keep the book. After all, he didn’t know it was stolen and paid full price. Now combine that with essentially colluding with actual thieves of actual Kindles and my head starts to hurt at the illogic and sleaziness of it all.

Now Amazon will chug right along without paying any attention to my one-man boycott. And Barnes & Noble will not see a massive swing in quarterly earnings because of my switch. But trust is the most valuable commodity in any business transaction, especially when dealing in China. PassageMaker’s motto is “Trust & Transparency” for a reason.

Why go it alone?

Random thoughts at the end of a great week, one where long-delayed projects resumed, new customers signed on, and some HUGE potential clients visited our facilities in Shenzhen and Buji:

  1. While I don’t think for a minute the recession is over, I am amazed at the resilience of the entrepreneurs we meet in this business. Creative, driven people with amazing ideas. Coming from the soul-draining purgatory of automotive, the best part of being PassageMaker’s global sales chief is the opportunity to work with such people in so many markets.
  2. Even though a significant percentage of our clients are inventors and start-ups, some of these new prospects have been working in China for 15+ years. They see PassageMaker’s bricks-and-mortar; our skill navigating the Chinese VAT system; our proven ability to manage supply chains for everything from medical products to toys; our commitment to “Trust & Transparency“; as game-changers that can simplify their lives, reduce costs and generally provide piece of mind. While PassageMaker doesn’t claim to eliminate all the difficulties of doing business in China, we could not have grown as we have if we could not deliver on our promises.
  3. At the close of this amazing week, I heard the story of a local businessman who just returned from his first trip to China. He doesn’t speak the language, but felt obligated to go to try to convey his expectations to the suppliers. He was basically told by his hosts not to expect too much, this was China after all and quality problems happen. While in a sense this is wise counsel, what a sad statement. I would advise anyone who loves to explore and travel to visit China, but not for that reason! PassageMaker and our friends at www.SourcingServiceCenter.com are in business to help insure quality and keep our clients at home with their families. You can bet I will be contacting this gentleman first thing Monday morning to offer our services!

Great weekend to all!

Yummy chicken feet, tires, and the global economy

The NYT article, “Chewy Chicken Feet May Quash a Trade War”, leads me to mull over the potential trade dispute over tires and chickens:

“China is threatening to cut off imports of American chicken, but poultry experts have at least one reason to suspect it may be an empty threat: Many Chinese consumers would miss the scrumptious chicken feet they get from this country.

“We have these jumbo, juicy paws the Chinese really love,” said Paul W. Aho, a poultry economist and consultant, “so I don’t think they are going to cut us off.”

Chicken exports were thrust to the forefront of American-Chinese trade tensions on Sunday when China took steps to retaliate for President Obama’s decision to levy tariffs on Chinese tires. The Chinese announced that they were considering import taxes on automotive products and chicken meat, a development that some trade experts feared could escalate.

American executives expressed concern about losing what recently has become the largest export market for their chickens, one that is expanding rapidly as the Chinese population grows more prosperous. But the executives also expressed relief that, so far, Chinese importers have told them to keep the feet and wings coming.”

Most people look to China as a source for low-cost goods, but I don’t think many USA or EU clients are looking to buy tires without a name brand to assure them of the quality of this most important piece of safety equipment (my wife runs Michelins for instance). But while Chinese products have a reputation for poor or inconsistent quality (after all this is why PassageMaker assists clients with inspections and it is the ONLY business for our friends at China Quality Focus), foreign products often enjoy a privileged place in the Chinese marketplace. Especially foreign agricultural products, and it is far harder to copy a Georgia pecan, Scotch whisky, Spanish wine, etc. PassageMaker’s can help help foreign sellers research the Chinese market and establish distribution partners, much like a Sourcing Feasibility Study in reverse.

Let’s hope this increasing integration of the USA and PRC economies encourages expeditious and rational resolutions to such trade fights.

Let’s have a trade war! Or, what to do when you tire of chicken…

So we now have a brewing trade row over Chinese tires and American chickens:

“China announced dumping and subsidy probes of chicken and auto products from the U.S., two days after President Barack Obama imposed tariffs on tires from the Asian nation.

Chinese industries complain that they’re being hurt by ‘unfair trade practices,’ the nation’s Ministry of Commerce said on its Web site yesterday. The dumping investigation relates to poultry alone, a spokesman said in Beijing today. The ministry didn’t specify the value of imports of the products.”

This is something of a daring move on the part of the American administration, given that China is the largest buyer of USA debt, and thus underwrites Washington’s spending. And the Chinese are none too comfortable occupying this space these days. Ditto for the rest of the USA’s creditors. I am sure there are plenty of valid arguments on both sides of the issue (Chinese tires don’t exactly have a sterling reputation), but the timing is curious. The Obama administration has based its agenda on deficit spending and has to know that the PRC government is mighty uncomfortable providing the financing. A more conciliatory American posture would be expected.

That said, sourcing in China will continue – it has to, with the so many USA firms no longer in business – and if you need to source in China, you need a partner who can help you navigate the waters and protect you from shoddy product. PassageMaker acts as a “Black Box” to protect your Intellect Property and a “Quality Gate” to make sure you get the product you ordered.

Let’s have a trade war! Or, what to do when you tire of chicken…

So we now have a brewing trade row over Chinese tires and American chickens:

“China announced dumping and subsidy probes of chicken and auto products from the U.S., two days after President Barack Obama imposed tariffs on tires from the Asian nation.

Chinese industries complain that they’re being hurt by ‘unfair trade practices,’ the nation’s Ministry of Commerce said on its Web site yesterday. The dumping investigation relates to poultry alone, a spokesman said in Beijing today. The ministry didn’t specify the value of imports of the products.”

This is something of a daring move on the part of the American administration, given that China is the largest buyer of USA debt, and thus underwrites Washington’s spending. And the Chinese are none too comfortable occupying this space these days. Ditto for the rest of the USA’s creditors. I am sure there are plenty of valid arguments on both sides of the issue (Chinese tires don’t exactly have a sterling reputation), but the timing is curious. The Obama administration has based its agenda on deficit spending and has to know that the PRC government is mighty uncomfortable providing the financing. A more conciliatory American posture would be expected.

That said, sourcing in China will continue – it has to, with the so many USA firms no longer in business – and if you need to source in China, you need a partner who can help you navigate the waters and protect you from shoddy product. PassageMaker acts as a “Black Box” to protect your Intellect Property and a “Quality Gate” to make sure you get the product you ordered.