A Busy Day!

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The morning began with a lecture on Chinese financial markets from Professor Huang Ming. It was a quick, yet thorough overview of the banking sector, stock market, bond market and private equity/debt markets in China. His outlook is that China is not a healthy financial market at the moment. His 3 rules for a healthy market are: 1) companies have access to $ when they need it, 2) Investors enjoy fair returns, 3) Everyone plays by the rules (transparency). Over 80% of bank loans in China are for a 1-year term. Think about starting up a new business or feeding a growing one knowing that you only have access to capital for the next 12 months. Additionally, the most powerful Chinese companies tend to be state owned enterprises (SOE's) and are not listed on the Chinese stock market. Therefore, the stock market is not necessaril a good barometer for the overall health of the Chinese market.

In the afternoon we did a case stady involving a joint venture between Danone (French company) and Wahaha (Chinese company). It was a very interesting view of a JV gone south, for which both parties bore some responsibility. The main take-away for me was that as western companies gain more experience in China, a JV may not be the best route to market penetration; rather purchasing a company outright or using experience gained in a previous JV to start up a company/office might be a better bet.

We also had two guest speakers in the afternoon. The first was the Vice President of the American Chamber of Commerce in China (Judy Karp. She gave an interesting perspective of how the Chamber helps US companies get a foothold and subsequently navigate their way through the business landscape in China. The second speaker was Ben Lu, an executive with the Bank of Nova Scotia. He offered a unique perspective of someone who had grown up in Asia and is currently working there but for a foreign firm. His advice to western companies entering the Chinese market and looking to bring their global best practices to their operations in China was (rouhg translation "A man who can use a fork may eat as well as a man who can use chopsticks." In other words, you may have to adapt your best practices from else where or even abandon them for what works in the local market.

In the evening we had a dinner at a local restaurant and then went to Laoshe's Tea House for a traditional cultural show. It was like a vaudeville show, but with tea and all in Chinese. It was a variety show with singers, dancers, jugglers, kung fu monks, and their version of Abbot and Costello. Plus they had these guys that wielded tea pots like a weapon and poured tea in a variety of poses. A rather intersting evening.

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Photos

The Golden Jaguar
A rather strange Chinese buffet. Everything from marinated pig's ear to Chinese sturgeon (still breathing as it lay on ice).

Foot juggler
Not only did she juggle this vase, but also a table and two people balancing on either end of a long pole. Absolutely amazing!