From June 9 to June 23, 2008, 16 professors from UW Oshkosh’ College of Business visited China to learn more about business practices there. The following are my observations from this trip. All these observations should be read with significant caveats: We stayed on the coast and so did not see the interior of the country, we went prior to the Olympics when extra attention was being paid to the appearance of the country, and we were just there for two weeks. We met with a number of business leaders and were able to see a number of factories and other places of business, but I think we are all well aware that we were just scratching the surface of a very complex country.
Observation 1 – The place is exploding.
Here are a couple sky-line shots of Shanghai
Both these shots are from Shanghai’s Pudong area – the financial district being built east of the river. But basically you could travel for miles in any direction and see high rises all over. 40-50 story office towers and apartment buildings were routine. All of these buildings were built in the last ten years, most in the last five.
There was some concern of a real estate bubble, as prices were getting pretty high. But construction was still ongoing everywhere.
Observation 2 – Infrastructure is being taken very seriously
Subway lines are being added under cities as highway are being built on the ground and in the air. Here is one image of an intersection in Shanghai. There are ten lanes on the surface, eight lanes on the elevated road, and a pedestrian over pass in between. Notice the flower pots along the elevated highway. We saw efforts in every city we visited to landscape roadways and public places. The landscaping included trees, grass, shrubs, and was invariably well-maintained.
We traveled throughout Shanghai and about one hundred miles south to two industrial cites, then flew to Beijing and traveled about 60 miles north to another industrial city. All the roads we saw were in good shape, and usually 6-8 lanes wide. Traffic was heavy everywhere. In the cities, traffic often slowed to a crawl. In the countryside traffic moved at normal speeds. China is also building new airports all over the country and is trying to improve its railroad. Railroads are currently slow and crowded.
Observation 3- Pollution
Pollution is visible in Beijing. The image below shows Tianamen Square looking north toward the Forbidden City. Many days are like this when the air seems heavy. High humidity is part of the cause, as is dust blow in from the desert, but pollution is clearly part of the problem.
On the plus side, the Chinese clearly know they have a problem and are responding. To quote the head of the American Chamber of Commerce when we were in Beijing, “China is a toxic waste dump, but they know it.” He mentioned a number of American companies that were invited to set up business in China to work on the problem. And as you will see during the Olympic coverage, they are doing such short-term things as going to odd/even days for drivers, shutting factories for the games, and halting construction pro0jects.
Observation 4 – factories are automating
We have the sense that China’s real competitive advantage is low cost labor. But they are concerned about rising labor costs and are already moving to automate when they can. I was surprised by the number of computers and robots I found in various factory tours. Here are a few examples:
This computer is controlling the printing of a dye pattern on some silk.
This computer assists in laying out garment pieces so the cloth is used most efficiently.
Here the Kohler quality assurance offices measures each faucet.
These ladies are working with a design studio in Italy to establish the final designs for some new dresses.
This machine is independently assembling parts of a pump.
Observation 5 – Factories in general seemed well-designed
Again, when we think of China we think of low costs labor and harsh working conditions. Those places may exist, but the places we visited looked comparable to their US equivalents with well-laid out assembly lines, worker cafeterias, and well-constructed buildings. Here are a few general shots.
Assembly area of a factory south of Shanghai.
This assembly line makes office punches.
We ate in this factory cafeteria. The food was fine.
This large room in a garment factory looks like the kind of scene we might expect, except the room was well lighted, the floors were tile, and everything was very clean.
Here men are forging faucets at Kohler’s foundry north of Beijing. The room was well ventilated and men seemed to be wearing proper protection.
When asked for a general reaction to China, I tell people I was impressed. Everyday I saw more than I expected. And, I never experienced any hostility even though I walked great lengths in both Shanghai and Beijing through areas beyond those normally covered by tourists or business people. At 6’6” I drew my share of stares, but I was always treated respectfully. And, I found the food to be good.
My advice to anyone in business would be to find some means of getting to China. See it for yourself. You may react differently, but I think you will also be impressed with what they have accomplished.