From Beijing to Chengdu: Part IV - Drawing Feet on a Snake

Many visitors to China often comment on the ideological differences that affect business, culture, and daily life. There have been many articles, by foreigners and Chinese nationals, about the 'can't do' attitude that is common here. Like so many things in China, this too is changing.

Dietz: At times the lack of ingenuity and freedom of creative thought it is a little frustrating, at even with basic business services. For example, recently at a restaurant, I asked for something on the menu and asked if some of the extraneous toppings could be left off. I was met with an extreme face of fear and puzzlement at my request. The server's response was: "We have never done that, don't do that, and probably will never do that."

Bates: I have had similar experiences that are equally frustrating. Recently, I made the long journey to Starbucks to enjoy an Americano. I particularly enjoy a strong cup of jo, thus I asked the barista to fill the cup only half-way with water. I too was met with a blank stare that did not want to comply with my request. It took several minutes for my Chinese friend and I to persuade the barista that this is what I truly wanted and had to explain why before I could relish in my vice. The constraints placed upon the Chinese in the past have also contributed to the lack of creativity and innovation.

Dietz: At times this doesn't seem to be limited to the basic services sector, but to generally doing business. Due to the broad availability of labor (both blue and white collar), things that would generally rustle feathers are seen as a liability, not an asset. Thankfully, this is changing.

Bates: Agreed, the rate of change is increasing everyday and will eventually contribute to better service models and business cooperation between the West and China. Due to the supply and extremely liquid labor force here, it is dangerous for most employees to step outside normal business protocol. If employees deviate to satisfy customers and it somehow backfires, it could very well mean getting displaced for another available employee; employees acknowledge that they are very expendable.

Dietz: If you are one of the millions of workers that have come to China's urban area seeking expanded opportunities from the vast rural communities, an activity which may annoy your boss is not the first thing that comes to mind at the office.

Bates: This reminds me of a famous Chinese idiom (hua1 she2 tian1 zu2) which translates to “drawing feet on a snake.” The story is about a drawing competition, where the competitor who draws the snake the fastest gets a nice bottle of booze. One guy draws the snake really quickly, but seeing the others are still working, decides to add feet to the snake for fun. Another guy finishes his snake drawing, grabs the booze, chugs it, and says in triumph “You didn’t draw a snake. A snake doesn’t have feet!” As I understand it, the idiom means that you shouldn’t do superfluous things — only what’s asked of you.

Dietz: However, Bill Gates said last year that some of the most interesting software development in their company is the stuff coming straight from the top college graduates they recruit over here (specifically Qinghua) and give free reign.

Bates: This is a prime example of the changes taking place in China at this time. The younger generation has experienced a completely different way of life and thus will begin contributing to China and the world economy in a great way. However, the rate of intelligent college graduates is also making the working classes suffer lower wages. Many Chinese companies have so many people to choose from that they can offer low wages and at times recent grads may work for free. At the same time, wage in many cases is what is driving China in to the super power it has become.

The question in my mind is how do you encourage really smart and capable people — and there are a lot of them — to break that conformist tradition, and draw feet on snakes? For instance, stop thinking “what job can I apply for” and instead ask “what opportunity can I create”? Looking back at the development of Korea and Japan, and the similarly rigid educational systems and labor pools, ingenuity and innovation were not adjectives used to describe them either. However, the current situation with both these countries puts those wayward viewpoints to rest. In all probability, the same is happening here.

From Beijing to Chengdu: Part III - Construction

Although Chengdu and Beijing are developing differently, and at different rates, construction has lead to positive and negative affects on both cities. The impact of development can be seen from every twist, and viewpoint the two cities has to offer. In this second series of discussions, our team will discuss the varying levels the degree to which development has affected investment, opportunities, and lifestyles.

Real Estate and its Implications

Bates: The residential and commercial high-rise real estate market in Chengdu is booming. The market value of office space grew 17% Y/Y through 2006 which provided a rental yield of 13% per annum; more than Beijing, Shanghai, or Guangzhou . However, the luxury residential market demand exceeds commercial space due to the recent emphasis to construct tall buildings with greater density.

Dietz: The commercial real estate market is booming as well, but with some consequences.

Many international firms have established main offices here but either have little need to completely staff the offices, or cannot effectively manage the logistics. As a result a whole new market has opened up for property management of foreign corporations operating in Beijing. Additionally, the local authorities are trying to calm the hot real estate market, fearing a pop in the bubble.

High-Rise Construction
	Beijing	Chengdu
Completed	848	127
Under Construction	66	39
Proposed	10	1
Never Built	2	1
On Hold		1

Bates: Chengdu is planning 5 subway lines totaling 220 km. The first 15 km phase of the 17 station line began construction in 2001; total rail investment exceeds $1.718 billion. In May of this year, the main body construction of the deepest underground subway station was completed. This alternative transportation will help ease the increasingly congested roads.

Dietz: Similarly, in order to gear up for the Olympics and ease a huge deal of city congestion, Beijing has begun a massive subway construction project, adding an additional 5 lines to the existent three. Currently, the city has Line 1 (runs east to west under Jianguomen St., and under Tiananmen), Line 2 (a square route running around the 2nd ring road), and Line 13 (a massive loop around the north end of the city). However, the existent lines are grossly inadequate to meet the commuting demands of the city (as evident by my very intimate morning encounters with Beijing residents sardine packed into subway cars).

Bates: Of course all this development in Chengdu has caused many traffic flow implications. Many directional streets here shift one way or the other depending whether or not construction is hindering traffic. With many combined cyclists/pedestrians, the flow of traffic swells and contracts perfectly like a school of fish in a hurry. It is remarkable however, that Chengdu's resident's constantly adapt (and even manage to flourish) their way of life to meet tomorrow’s needs.

Dietz: Beijing streets run according to a different set of rules, or more accurately, a general disregard for them. The massive construction projects (including the subway lines) have forced traffic to bend and flow across the improvised routes. The roads are jammed pack with bikes, buses, and an ever increasing number of personal cars.

A common sight in most Chinese cities is a skyline littered with construction cranes (estimates range from 30-60% of the world's cranes are in use here). The face of most cities have been redefined in the past ten years, and most likely, will continue to change rapidly for some time to come.

Comparing Apples to Apples (or Starbucks to Starbucks, for that matter

From Beijing to Chengdu: (Part 2)

Metropolitan areas, especially large Chinese cities, are difficult to comparatively quantify but finding a modus for comparison between the Western Chinese city of Chengdu and the capitol of the PRC, Beijing, is even more slippery. On paper, Chengdu lags far behind the metropolitan political and economic powerhouse of Beijing, but for residents, it’s a simple matter of feeling and pace that separates these two cities the most. This second part of a series comparing Beijing and Chengdu will try to do a little of both, using quantifiable modes of comparison combined with the experiences of the co-authors of this series.

First, the numbers:

	Beijing	Chengdu
GDP (2005)	$84.02 billion	$35.4 billion
Population	15 million	10.44 million
Metro Size	16,808 km2	12,300 km2
Pop. Density	888 per/km2	848 per/km2
Number of:
McDonalds	92	11
Starbucks	20	5
KFC	135	25
Carrefour	6	5
Wal-mart	1	1

Chengdu:

Chengdu, left out of a large part of the economic development prior to this decade, is now starting to boom. Its large natural resource base and economic incentives for FDI have already attracted some big players (Intel, Toyota, and Motorola have all set up in the High-Tech Development Zone). The city is one of the key players in the “Go-West” economic development doctrine promoted by the central government hoping to spur Central and Western Chinese development.

However, the city runs at a different pace than many Chinese cities. The weather in Chengdu is ubiquitously cloudy and when the sun breaks through it’s not an uncommon practice for many to take the day off from work. Not surprisingly, residents work a 9-5 hour day emphasized with long lunches. Teahouses abound (4,000), the residents are famous for their extremely long tea drinking sessions paired with playing mahjong. The culture is relaxed here and business in the conference room is just as likely to continue at the local tea house. As well, Chengdu’s abundant nightlife has been epitomized by the ever famous Babi Club, whereas Chivas Regal claims that more of its whiskey is consumed per square foot than any another mainland establishment; mixed with non other than GREEN TEA. It’s truly fascinating that the populous here have maintained their joy for life while achieving such rapid economic growth.

Beijing:

Beijing hardly needs any introduction on an international setting, and its exposure will continue to grow as the city draws nearer to the 2008 Olympics. The city continues to expand, with prospering technology zones and an extremely hot real estate market. The vast expansion of the city has led to ridiculous logistical problems (horrible traffic, pollution, and general congestion), and carved the city into several very large, distinct districts. The high tech area to the north continues to expand with most large international and domestic technology firms setting up offices near the Zhong Guan Cun Technology area adjacent to the country’s leading universities (Microsoft, AMD, Intel, Google, Lenovo etc.). A Beijing office has become commonplace for many multinational corporations, and at times, a necessity.

Within some of the old districts in Beijing, people can still find old style Beijing with hutongs and street markets, immediately surrounded by high-rises and malls. However, there is a sense that this city is slowly loosing its roots as it becomes an international hub (there is a Starbucks in the Forbidden City, for example). Restrictions are being put in place minimizing the skyline from excessive banners and corporate advertisements (including a great many McDonalds’ Golden Arches). The city is in a type of identity crises as it continues its face lift before the Olympics, but at the same time, maintaining its perception as an ancient hallmark of Chinese culture.

Bates: Although Chengdu’s lag behind Beijing is quantifiable, it’s interesting to note that even as this blog was written a new Wal-Mart had just opened in Chengdu within the last week. There’s no denying Chengdu’s huge potential for economic growth but the sustainable leisurely attitude is truly inspiring. The time spent enjoying life in Chengdu creates an undeniable force in relation to economic growth. Perhaps, more can be accomplished in a developing city when taking pleasure from life.

Dietz: The fervor of development here in Beijing can be felt on every walk down a busy street (figuratively and literally as one has to be careful not to be hit by bikes, cars, or falling construction materials). The city is humming with international influence, a cultural mixing pot, and an extremely strong sense of adventure spinning the city into Olympic proportioned capacity. However, people are coming to realize the sacrifices of this burden, as the city has become virtually impassible during most times of the day. Commuting, smog, and road rage frustration are commonplace on the streets even before they get backed up at 7am. This place is extremely enjoyable, everyone is just to busy to do so.

From Beijing to Chengdu

Its easy, and often convenient, to generalize countries and cultures when thinking from an international context, especially when it comes to China. However, this country is just as diverse, if not more so, than the US when it comes to culture, language, and business. The paramount example of this dissimilarity can be explained in the different living environments of the AsiaPacific Access team in China.

Despite that over 90% of China is the same ethnic group (Han Chinese), the difference between regions, especially Eastern China and Western China, is rather staggering. Approaching this country with a single strategy in mind, whether you are doing business, studying, or even traveling, drastically depends on where you are going.

For example, despite the standardization of the Chinese language throughout the country, Mandarin is often a second language for many residents outside of Beijing, who generally speak their own dialect. In Kunming, citizens can speak very clear standard Mandarin, but converse with their local compatriots in an extremely different Kunming dialect (Kunming-hua).

These differences are compounded by the extremely strong sense of location-specific identity associated with many residents of this country. Not only do most people have a very nationalistic identity, but an extremely regional / provincial identity. Most introductions between locals include a discussion of each individual’s home province and specific cultural identity (language, practices, prejudices, and most importantly, food). The conceptions and prejudices between people of different provinces are astounding at times (e.g. a discussion of Shanghai will always include a remark about how Shanghai people supposedly value money before friends).

The differences just begin with language, as the East and Western part of China are ripe with a wide range of contrasts. The vast majority of the development in China over the past 20 years has happened in a very select group of Eastern cities. The pace, structure, and experience with international business in the Western part of China is still in its infancy, but developing quickly. Currently, the government has realized the development lag present in the West and is pleading with international firms to set up shop in the West, and encouraging with impressive financial incentives.

For a foreign business, the Western part of China provides a unique opportunity but a paramount challenge. There is no question that many key cities in Western China (Chendu, Kunming, Chongqing), are in a key position to prosper under beneficial trade agreements with many of their proximate Southeast Asian neighbors, but they still have a great many challenges to overcome before becoming the next Shanghai or Guangzhou.

The AsiaPacific Access team is scattered across the country and on a daily basis comment on the differences between regions and cultures. The concept that China has a single cultural identity is misguided. Of course, it is one China, but the road from Beijing to Chendu is filled with innumerable unique characteristics.

Editor’s Note: This entry marks the beginning of our dialog on the differences between life and business in Eastern and Western China. Look forward to comments from the AsiaPacific Access team in Beijing, Chengdu, Shenzhen, and Kunming. It is our hope that these entries will help the reader connect with the wonderful world that exists in the Middle Kingdom. We welcome and look forward to your comments and insights from your experiences in China. 谢谢您 ~ 小江。