Jason's Adventures - South China

I have been in China now for just over a week. It began at DIA on February 18^th while waiting for the plane to show up at the gate. I was amazed with the number of Chinese businessmen (12-15) at the airport waiting for the plane to San Francisco, before they would catch their connecting flights to Hong Kong, Shanghai, or Beijing. I am used to seeing these business men on the flight from San Francisco, but not at the origin in Denver. It made me believe that the Chinese outreach to sell their products directly to the largest market in the world is happening even faster. For the past decade or so, China has been the world’s shop in the back, but now Chinese companies are increasing their efforts to establish a brand and sell directly to the U.S. rather than thru their typical distribution channels.

I arrived into Hong Kong on Sunday evening and spent the next 18 hours in Hong Kong before taking the train into China. It was the first time I have taken the train into China and I was impressed with the convenience. I have taken the bus and ferry many times, but the train seemed to be the quickest. I went thru immigration at the Hong Kong train station and didn’t go thru Chinese immigration till I got off the train in Dongguan at Changping station. The whole trip took just over one hour and then I was only a 10 minute cab ride from the hotel in Huangjiang. It is definitely the fastest way to get to Dongguan from Hong Kong. I spent Tuesday visiting suppliers of one of our clients helping to do some follow up project management.

Tuesday evening I was in Shenzhen and had dinner with our new team members there, Rosa and Angela. It was Wednesday that would be the long and exciting day! We began the morning visiting a company quite close to my hotel. However, it was the old factory and they are in the process of moving, so our host was very rushed to show us the production before we jumped back in the minivan and left to visit the new factory about one hour away. Because the infrastructure still isn’t complete in many places in China, it is quite common to spend a lot of time in a car. After visiting the factory, the host took us for a quick lunch (which is not very common…usually lunches can last a long time) and then drove us to our next appointment. I was very impressed with the customer service of the first company that day; it was the 2^nd company that made our late afternoon interesting.

The capabilities of the company were actually very impressive. It was a world class manufacturing center, and they were making so much money, they didn’t feel they needed to focus on customer service, particularly small customers like us. The challenge came when we left the meeting, they didn’t offer to arrange transportation for us. So, we left the company and began walking. I was joking with Rosa and Angela that we were taking “Bus #11” because our legs represented the number. We walked for about 30 minutes and got some general directions from two locals who pointed us in the direction of National Highway #107. However, they warned us that the road up ahead was bit dangerous, meaning there was a lot of thugs and thieves. Well, shortly after that a taxi came by and he was able to take us to the main highway. When we arrived at the highway, it was packed with traffic. Most of the traffic was large trucks carrying goods to the port, but there were also a few buses dispersed among them. Angela asked the local police which bus number would take us to Nanshan where we were staying. A few moments later, she waved down the bus and the three of us got onto a packed bus. It took us one hour to get to the checkpoint station in Shenzhen, Nantou where we got off the bus.

Then we encountered the next challenge. In the early days of Shenzhen’s development, this checkpoint controlled the workers that entered into the Shenzhen area. Workers were required to have their national ID card as well as a permit. Now the permit’s are no longer required, but the Chinese nationals are still required to show their ID if they are walking thru the checkpoint. Unfortunately, Angela had left her ID at home which was on the other side of the checkpoint. Thinking quickly, Rosa decided that I could walk thru first with her and then take her ID back to Angela. As long as Angela went thru a different line, there should be no problems. It was still a bit nerve-racking, but as a “Laowai” (foreigner), I could run back thru and pretend I had dropped something or was looking for something back on the other side…which is exactly what I did. I went back thru and passed Rosa’s ID to Angela and told her to not go into line #8 and that I would follow her thru in about 2 minutes. Angela was still nervous and her heart was beating fast as the security guard checked the ID. Luckily he didn’t look very close and she sailed thru the checkpoint and met up with Rosa. I followed behind and met up with them and we got in a taxi to finish our journey that day.

The next day, we took a bus from Nanshan two hours to the other side of the Pearl River to a town called Zhongshan. Zhongshan is south of Guangzhou and north of Macau. We spent the day and evening in Zhongshan before heading to Zhuhai the next morning. We visited one more factory in Zhuhai that morning and then spent the afternoon by the ocean taking some time off after our long week of travels. Rosa stayed in Zhuhai and then Angela and I took the 5:30pm ferry back to Shenzhen. It was a long week, but another great learning experience. I flew to Shanghai over the weekend and am spending this week in Shanghai before venturing to western China at the beginning of next week. I am sure there will be many adventures ahead.

Western China Comes to the WTC-Denver

In a packed conference room, high on the 16^th story of the Denver World Trade Center, the AsiaPacific Access team kicked off a presentation on the rewards and challenges of doing business in Western China. The audience, a diverse mix of professionals from the Denver metro area, followed the speakers intently – armed with pen in one hand, deli sandwich in the other.

The cliché is true: Western China is the new Eastern China. Where the east has fallen prey to rapidly increasing property costs, labor costs, and high employee turnover, the west has maintained the very head turning elements that spurred the China boom years ago.

Ralph, Jason, and Andre covered not only the growing allure of Western China, but also some of its unique challenges. Though employees maintain a higher degree of loyalty to firms in cities such as Kunming (compared to, say, Shenzhen), they are also less willing to work the demanding hours of their eastern counterparts. It may be easy to identify strategic property for bargain rates in Chengdu, but the infrastructure could very likely require additional development.

Though many in the audience had been to China, questions were both varied and engaging. It quickly became clear that even if one had previous experience in Eastern China, the west was a whole new ballgame. Ralph was up to his old tricks again, pulling out entertaining China stories from his treasure trove. The extra time built into the schedule for networking proved valuable for personal questions, making friends, and a tasty dessert.

Chongqing's Lifan Group Transports Complete Engine Plant from Brazil

What do you do when you want to buy a technically superior engine factory that's 8,300 miles from your domestic production facilities?

Obviously, you strip it down, piece by piece, and ship it off to the middle of China.


The Lifan Group, a prominent motorcycle and emerging world car producer, is proposing to do just that: buy an engine plant in Brazil and ship it to Chongqing. The Brazilian Campo Largo plant, a $500 million investment by Daimler Chrysler and BMW from the 1990s, currently produces around 250,000 engines a year. This plant supplied BMW with the 1.6-liter, 16-valve Tritec engines for its gasoline Minis Cooper, and is considered one of the most advanced plants for producing highly efficient gasoline engines. However, the plant became a corporate orphan following the Daimler Chrysler merger and has been in limbo since.


This bid by the Lifan Group, backed by the provisional government, is representative of the strategy by Chinese automakers to become the world’s producer of cheap fuel sipping cars. Fueled by an intense demand in its domestic market, Chinese automakers grabbed 25% percent of the domestic car sales, up from 10% two years earlier. One of the biggest difficulties currently met by Chinese manufactures has been mass-producing high quality, fuel sipping engines for its cars.




The Lifan Group, modeling Honda'’s rise from motorcycle manufacturer to passenger car powerhouse, has recently unveiled its first sedan release. The Lifan 520, priced a little under 10k USD, comes equipped with airbags, DVD player, and leather seats. These cars will soon be exported to the Caribbean, the Middle East, and Southeast Asia. President and principal owner, Yin Mingshan, hopes to export to Europe by 2008, and the US by 2009.


Representatives from BMW and Daimler Chrysler have not confirmed the deal, but considering that their contract runs out with Campo Largo next year, they are entertaining a variety of options.


While Lifan would be buying the factory, negotiations on the Chinese side are headed by Huang Zhendong, a Chongqing CCP party official and a member of the powerful CCP Central Committee.