Back in 2006 I opened an office in China with my former company. It was an exciting time and I enjoyed working with our chinese team a lot. Nevertheless it was also very challenging and it was though to increase efficiency and results, especially working closely with our other teams in Munich, New York and Tokyo. For me China was always very fascinating and I felt that the country was shifting from a leader in production (“made in china”) to a powerhouse of creativity. Especially the speed of innovation and growth in digital media is amazing. Many startups I met grew from zero to 10 million users within weeks. China’s version of twitter “Weibo” has 250 million registered users. And Kai-Fu Lee’s Innovation Works is creating the Golden Age of IT in China.
Today I want to introduce you to my friend Shaun Rein (@shaunrein) who has just finished his book:
“The End of Cheap China: Economic and Cultural Trends that will Disrupt the World”.
I asked him a few questions about his book.
What is the book about?
The main thrust of my book is to show that China no longer is a cheap place to do business anymore and what the implications for the rest of the world are. Labor and real estate costs are rising in the double digits which means manufacturers might need to relocate to markets like Indonesia and Vietnam or convert factories to sell into China rather than just export. The country is undergoing a huge economic shift away from relying on exports to consumption. The book tracks that change by interviewing Chinese to find out what they want, and giving advice on how to stay ahead of that change with marketing, product design, and sales strategies.
Why did you write the book?
When I read articles by much of the western media, I realize they are missing out on the great transformations taking place in China today and are often perpetuating outdated views of the country. I decided to write the book to dispel myths about the country and provide an action guide for western businesses on how to sell here.
For instance, whenever I talk to westerners, many assume that China is in an internet black hole because they hear Facebook and Twitter are blocked. That is not true — there is a very vibrant online community here. The average Chinese under the age of 30 spends 22 hours a week online vs 12 hours in the US. But instead of using Facebook, they use Chinese variants like Sina Weibo and Tencent’s QQ. In fact, because of the tight media control, younger Chinese turn to the internet more than counterparts in the west to get more trusted sources of info. The result is that western brands have to embrace digital marketing in China far more than most are. Typically large multinationals only spend 3% of the marketing budgets on the digital side when that number should be much higher.
What was the most exciting, most emotional and most surprising interview you did?
The most emotional interview I did were the series of ones I conducted with my now deceased grandmother-in-law Lili Li who was a famous movie star in the 1930s and came from a heavyweight political family. She battled against Jiang Jing (Mao Zedong’s 4th wife) and a member of the Gang of Four and their tyranny that caused the chaos of the Cultural Revolution and untold suffering throughout the nation. My interviews and her story are included in chapter three of the book. It was tough hearing of the pain and torture she and her family went through at the hands of Jiang Qing. Her husband was tortured to death. But it was also inspiring to see how a women stood up to tyranny and eventually helped conquer it.
How will the “Expensive China” influence Europe and Germany?
The rise of “Expensive China” has serious implications for Germany and Europe. Germany is actually well positioned to benefit from China’s rise. China actually buys more from Germany than it exports to it. Germany is a model in many ways for creating an economy system that is sustainable — it produces something the Chinese cannot do right now. Unfortunately, as the book shows, not all nations like the US are adjusting well to the new world order and China’s rise. America needs to stop trying to scapegoat America for all its economic ills and instead focus on adjusting its economy to be more competitive as Germany has.
Follow Shaun Rein on Twitter: @shaunrein
More infos about the Book here:
“The End of Cheap China: Economic and Cultural Trends that will Disrupt the World”.
I just love the new trend from China “Dog Modding”. Here you can see a nice “Tiger Dog”.
Don’t you think?
The newest thing amongst dog owners in China seems to have emerged from this understandable fantasy and could be described as something like dog-modding: the color-dying of dogs, to make them look like other animals. Like this retriever, that is painted like a tiger.
Fake or Reality?
Look at this nice Panda Dog.
A more convincing example of dog-modding can be found in Wuhan, capital of the Hubei province, central China. A Chinese man modded his dog into a Panda – and did quite well so. As many will know, the Panda is a threatened animal, but also the national symbol of China. All living Panda’s in zoo’s all over the world are gifts from the Chinese government and are also considered state-property of the People’s Republic of China. The Panda es extremely popular in China – you could speak of a cult almost. But keeping a panda for yourself, of course, is strictly forbidden. So here the simulation comes in handy.
I just read “A better Street View comes form Canada” at ReadWriteWeb and I had to think back to a meeting I had in Shanghai, China, last year with an innovative StartUp.
City8 offers a much better quality, zoom function and interaction. The StreetView has been created using high resolution photography. City8 has already digitalized most of the big cities in China and is expanding its service rapidly.
The technology and the team surprised right away when we visited them during the Trend Tour for our client. It seems to be even better than the Canadian Street Maps.
See an Shanghai Street View in the streets of Pudong:
Just a moment out of the daily life of a student in China vs. Germany:
Left: Picture of a german school-class.
Right: Picture of a chinese class during entrance exams.
The images by citizen reporters from beijing are damatic. The burning CCTV Skyscraper reminds me of New York’s 9/11.
What happened? No News on CNN, NBC etc.?
I talked with him about the future of digital media in China. Kaiser explains the big growth in Social Networking and Internet Video in China. Over 77% of chinese Internet Users watch Internet Video which is more than in any other country. Tudou is the second biggest Video Website in China, besides Youtube. He mentions that it is the first time that Internet Video is taking away big budgets from traditional TV or print media.
See the full Video Interview here:
Minfo is the leading mobile / wireless search platform in China. Alvin Wang Graylin is the CEO and Co-Founder of Minfo. They started four years ago and have already reached over 13 million users. They have just signed a cooperation with China Telecom to be the exclusive mobile search and mobile advertising provider. This will give Minfo access to over 350 million China Telecom subscribers, over 100 million with mobile internet access.
Alvin told me about the differences to Internet-based search and how the satisfy the mobile users. Mobile Search is not entering one keyword and get a list of links back, it is more about answering one question. Minfo is offering SMS-based and Mobile Internet based services. Searches via mobile web are taking around 50% of all searches (and 50% via SMS), but is increasing rapidly. They developed a semantic search method and support several languages.
Here is the Video Interview filmed at the Monaco Media Forum 2008:
The last hours before the official start of the olympic games in Beijing 2008.
The chinese people are getting ready….
TBWA China produced this amazing Spot for Adidas.
Tianjin can become the third big “boomtown” in China. After Beijing and Shanghai the chinese government is now focusing on Tianjin to create a new hotspot in China. Therefore huge development programs have started and the area will see a dramatic change in the next decade. In Tianjin there are already plans to build an impressive skyline and a modern city, comparable to Pudong in Shanghai.
The Word Economic Forum is organizing the next “Annual Meeting of the New Champions 2008″ to be hold in September 2008 in Tianjin.
Here you find an interesting promotion-video about the “Boomtown Tianjin”:
China is growing rapidly and expands its influence on a global level. One dramatic side effect is that 16 out of 20 dirties cities, on the World Bank’s list of most polluted cities, are in China. There is a dramatic water shortage in 400 of 668 China’s biggest cities. Environment, water and air pollution are important issues for the future of China.
That’s why China is pushing sustainable concepts and projects. The Green Dragon Media Project is documenting this tough challenge and shows major steps into a greener future for the 1.3 billion inhabitants in China.
Here you can watch the trailer:
Yesterday I watched a great documentary called “Brits get rich in China”. The Video was recommended by Christine Lu from the ChinaBusinessNetwork.
I think the documentary shows the dynamics and the spirit in China.
As we are preparing our upcoming manager tour in China, the video is a great example of what you can experience in China. Furthermore you get a good feeling of “how to do business in China”.
Have a look….
The IOC annouced the first “Blogging Guidelines” for the olympic games in Beijing. “The IOC considers blogging…as a legitimate form of personal expression and not a form of journalism,” the IOC said.
Here is the full news at ZDNet:
The International Olympic Committee on Friday gave the green light to allow blogging at the Olympics for the first time, issuing guidelines for this August’s Beijing Games.
Athletes have long demanded they be allowed to write their blogs–online journals of personal opinion or reflection–during the Games but the IOC was concerned these could potentially infringe on copyright agreements and private information.
In a series of guidelines, the IOC said blogging would be allowed during the Beijing 2008 Olympics as long as individuals writing the journals keep within the IOC format.
Continue reading Blogging Guidelines for the Olympic Games…
Our Team in China just published a great Trend-Abstract about Baidu and Google in China:
China Search Engine Snapshot.
“…According to online market research company iResearch, Baidu now aacounts for nearly 61% of search engine traffic in China, followed by Google with nearly 24% and Yahoo China just over 10%. Quarter after quarter, Google and Baidu have both been exceeding their China-based earnings targets, sending analysts scrambling to predict new ones. Over the past three months, Baidu’s 2008 forecast has gone up from USD 3.60 to USD 4.02 a share. Google’s 2008 consensus has risen from USD 19.49 to USD 20.59 a share….”
Leaving to Shanghai – with me my new german iphone. During the 3 day trend tour we will have many interesting meetings focused on web 2.0 and mobile media. I will write a short summary for you.
In Munich there is a big discussion these days about the Maglev-Train from the airport to Munich-Downtown. I don’t understand the issue. It is a german technology and the train is much more cost- and energy efficient than any other train.
The german ICE is much more expensive due to the high repair and maintenance cost, but the big cooperations want to make money and do not want to kill their own money machine.
Due to the lack of physical contact between the track and the vehicle, there is no rolling friction, leaving only air resistance.
The Transrapid technology is already many years old and it the best example how slow Germany can be. So don’t discuss about it – we want the Transrapid!
The Shanghai maglev cost 9.93 billion yuan (US$1.2 billion) to build. This total includes infrastructure capital costs such as manufacturing and construction facilities, and operational training. While high-speed maglevs are expensive to build, they are less expensive to operate and maintain than traditional high-speed trains, planes or intercity buses.
My collegue Daniel in Beijing did a great interview with Hui Xu, the founder of HiPiHi.
HiPiHi is a 3D Virtual World similar to Second Life with focus of chinese users.
Here is the interview – see also our China Blog.
CScout recently China paid a visit to the office of HiPiHi in Beijing’s Haidian District, for an interview with Hui Xu. Hui, founder and CEO of HiPiHi, was the general manager of MyWeb China, and was nominated as one of the “Top Ten China Internet Heroes” in 1999. Hui was also the chairman and CEO of JingQi XiShu Co. Ltd, which became one of the most successful e-commerce sites in 2000. Together with Xinhua Liu, he co-founded HiPiHi in 2005.
Can you briefly introduce HiPiHi?
“We founded HiPiHi nearly two years ago, and the site is currently in beta testing mode with about 10,000 users – about 15 percent are from overseas. Our public test will happen in August, and the full commercial launch will hopefully be sometime in the autumn. HiPiHi is currently the only Chinese virtual world, and probably only the second company worldwide after Second Life (SL) to offer a totally interactive, immersive and open-ended experience for users to create, inhabit and govern a new world of their own design.”
Why did you start HiPiHi? Is the Chinese market ready and who are your target audience?
Continue reading Do you already know the chinese Second Life?…
Here is a Video I produced during my last trip to Beijing. I now found some time to cut the whole Video and put it online.
At the Urban Planning Museum of Beijing you can see some futurist buildings (which are still in construction) and get a great overview of the city.
After an inspiring travel to China and Thailand we arrived back in Munich yesterday evening.
Here you can see an overview of my journey of the last weeks.
The main time we spent in Beijing to work at the CScout office. At Shanghai I met many interesting people including Birgitte Wolff of China.de. On the way back we spent a few days in Bangkok and Koh Samui to reflect the strategy for CScout’s China Expansion.
- Beijing, China
- Shanghai, China
- Bangkok, Thailand
- Koh Samui, Thailand
He organized a great “Foot Massage” next to his Hotel so we could relax and talk about Business opportunities.
Our discussion has been on current projects but also on the development of the chinese market.
His newest project is called “imagelooop” – he is supporting the german startup during the expansion period.
Andreas, thanks for your time and hope to see you soon again.
For the best view onto the Olympic Green you definetily have to book a room at the Morgan 7 Star Plaza in Beijing.
The building is just on the other side of the National Stadium and will be very high.
We visited the constructions site and produced a short video to give you an impression:
Here you can see a picture of the finished building:
Blog by Monty C. M. Metzger *monty.de.