Working in China - Future of China Interview for Rohit Talwar

I was asked Rohit Talwar to contribute answers to some questions for a book on "Expatriates working in China - Future of China". Below are my responses. If you would also like to contribute your views please contact rohit@fastfuture.com .

1. Tell me a little about your background?
New Zealander who after university worked in China for two years running an NGO AIESEC, dealing with government officials, multinational execs, Chinese university officials and students, and international organisation members and advisors,...then suffering burnout from the exhaustion of dealing with restrictive NGO laws, difficult technology (I could only get online on dialup from 10pm-4am),...and being perceived as a potential tianannmen movement as the organisation was student run (even thought totally nonpolitical), went on to join others in burnout in the Silicon Valley downturn of 2001-2 where I worked at Yahoo! for 18 months,...followed by a slight refresher for the spirit with two and a half years working in London living with family and getting involved in more personal development, spirituality in work, NGOs, shaolin gongfu and sustainable development work, then came home to Beijing again December 2004 to take on an exciting role working in something I had been passionate to do for a long time, working with social and environmental sustainable development issues in China.

2. What brought you to China?
The first time was in 1996 when I studied Chinese in Wuhan for 3 months. I was accepted for the programme in my first year of Chinese at university in New Zealand, so though,..."well, I guess I should jolly well go then!". I fell in love with China that time though.....Wuhan has a beautiful university and people were so non-materialistic and warm. There was so much history and so many stories to be told. Two years later when graduating university all I wanted to do was come back. I wanted to keep working with the organisation AIESEC I had volunteered with at university, and after hard campaigning was appointed the China extension manager so came to live alone in Beijing in December 1998. Beijing in those days, as today, was undergoing a lot of change. It was a small town....even smaller then now (!), and I loved the community feel,...the people it attracts from around the world who are prepared to sacrifice so much to understand the culture,...the old hutongs,...idealism of the socialist propaganda,...humanity of migrant workers and people on the street from the countryside who are willing to be open and giving to you when they don't need to. I left China purely as my job had exhausted me, and for four years all I wanted to do was come back. This time I came back to join a great team doing a great job that needs to be done for the world.


3. What are you currently doing?
I work as a senior social consultant in ERM Environmental Resources Management China, Beijing office helping companies understand social issues facing their business, and improve their social and environmental performance. I help them understand the details of risks to their operations or reputations, and capitalise on opportunities to grow a more triple bottom line profitable operation. I act as a bridge of information from the investment centres of London and New York, both of which I have done some work in, and our Chinese staff, the workers, commmunities and government on the ground here. I help our western clients understand how to act sensibly in China, and our Chinese staff, clients and partners understand what the western investors, NGOs and press are worried about and why, what they understand of China and don't.

4. How do you see China developing over the next five years (e.g., economy, business political situation, international relations, environment, society, environment, science and technology)?
Improving,..I think.
Things do seem to be getting better. See my blog...http://societalscan.nomadlife.org/ .....or do I only post the good news? Yes...there are lots of problems. But China is as large as Europe and more....and while there are still crackdowns the media is more open these days, the law is being applied more and more and developing, environmental management, hygiene, working conditions, and sustainable development are slowly improving, and corruption and IP piracy being dealt with everyday, even if slow.
There is a long way to go, and there are issues to be dealt with along the way, but I think most Chinese people and the political leadership want peace, want a clean environment, a middle class rather than extremes of wealth and poverty, want innovation for cleaner production as soon as it can be brought in, want a fair and just society where peoples concerns and voices can be heard.


5. How might this change on a ten-year timeframe?
I chose to be an optimist. While there are concerns with antagonism with Japan, need for energy, water,...ratio of men to women, military spending, I don't think many people want to give up the comfortable lifestyles the ever growing middle classes and up are gaining for risk of war, revolution or anything else, and there are too many voices today commenting on the need for changes where there are issues, so things will keep improving.

6. What do you think are the biggest obstacles to China’s development over the next five to ten years – how might they be overcome?
Enforcement of law. While China has come further to go in development of its law, many good environmental, health, safety and labour laws do already exist. Unfortunately, as they are not enforced, firms that should be unprofitable if they complied with these laws operate, and by producing goods under real cost, employ people in bad unjust conditions. The output from this production is exported, and as laws are not abided by, is below the cost of production in the west or almost anywhere else. This attracts further FDI to China, enhancing the impact on employment in western economies. I think we have only begun to see some of the tension this creates in international affairs. Such production and economic development is not environmentally or socially sustainable, but has created a vicious circle as the local governments that allow it now need to compete with each other to generate more of these unsustainable GDP results, as they can't have Decreasing GDP results. All the provinces and economic zones compete with each other, and noone can enforce the laws as if they did they wouldn't attract the FDI which gives them the great GDP results. So now the environment, and the mass of workers at the bottom of triangle suffer. Add to this the fact that the environmental protection bureau and labour bureaus, and courts frequently have insufficient, underpaid, and undertrained staff, who are therefore vulnerable to corruption, and you have a very difficult obstacle to overcome in ever bringing about consistent across the board enforcement of the laws which provide for sustainable development.
Bringing about consistent enforcement of environmental, labour, land, IP and other related laws is one of China's biggest challenges, especially when they don't want to close down the factories that, unprofitably, provide jobs for much of the large population.

7. Where do you see as the most exciting business opportunities in China over the next 5-10 years?
Solar and wind energy: the government wants to increase this to deal with energy insecurity and environmental issues, and the technology only gets better all the time.
Sustainable building: as energy prices increase badly insulated housing will become less affordable.
Education that integrates the best of eastern and western teaching.
Organic foods-people are starting to realise what they are eating, and can afford to chose something else once it comes on offer.
Internet.....people still can't do all the simple e-commerce, e-life things that affluent westerners do on the internet every day like get gifts delivered (with a lot to chose from), find their way around cities, find out about ancient Chinese history. So much less Chinese information is on the internet, yet Chinese people like the internet and have already demonstrated their willingness to pay for it with the popularity of travel, ringtones, and other sites.
Pension funds-a nascent industry, and so many products not yet available to Chinese consumers such as Socially Responsible Investment funds which make up about 16% of the European market.
Buses, trains and other sustainable transport like literail. There are too many cars already in many Chinese cities, yet people will want to go more and more places comfortably.
Hybrid cars-as energy prices go up, just like in the west demand for these will grow.
The World Bank, other lenders and Chinese cities and provinces are funding more waste related projects dealing with wastewater treatment systems, water and river clean up, and water provision, and there will likely be greater focus on cleaner water provision in 2006 due to the recent Heilongjiang chemical factory explosion and subsequent water pollution.
There are many projects occuring in the area of eco-tourism, although the quality and size vary.
Sustainable architecture and building development is on the increase and Beijing for example has brought in new programmes encouraging sustainable building. Any technologies which could support building which produces less dust may be greatly appreciated in the build up to the 2008 Olympics.
The mining industry is slowly moving to cleaner techniques and safer production.
Chinese energy companies are talking about deeper offshore drilling, and more LNG pipeline projects. In all cases they are focussed on moving to cleaner exploration and energy usage techniques.
Vehicle emissions standards have been increased and there exist opportunities for companies with technologies which create cleaner vehicle production or lower emissions of vehicles. Cleaner buses are also being introduced across cities, as well as subways.
Organic farming is on the increase in China, although nascent. Environmentally friendly fishfarming techniques would also be utilised. Safer drinking water technologies may be attractive to the consumer markets.
There will likely be far greater focus in 2006 on all cleaner production methods for all manufacturing industries due to recent dramatic events such as the Guangzhou and Huaxi land acquisition and polluted related protests where villagers were killed. This would be particularly with regards to the chemicals industries, but any industry whose production technique produces chemical or other wastewater will likely be willing to consider cleaner production techniques.
Furthermore, China has introduced new regulations regarding chemical registration and there may be opportunities in this area, and with regards to new production techniques which allow firms to produce goods which do not require chemicals banned in europe under new regulations.
Finally, there is more focus being put on river clean up, and wetlands, and organisations who can support such developments may be able to assist local governments.

8. What do you think are the most exciting existing and emerging businesses in China today – what makes them special?
??
Can't think of any chinese ones!
Everyone here seems to start factories, restaurants or property development companies. None of which are particularly exciting.

Most large businesses in China are still state owned, and suffer for it.

The internet businesses (alibaba, baidu, sina, ctrip) are probably the most exciting....except not terribly innovative either, even if well led and well sold.

Maybe the small solar companies which somehow seem to have got solar water heaters onto rooves of homes and buildings all over small chinese towns. Now that is impressive. Goodness knows how they got past the beauracracy and paperwork to get those up. Someone making something happen there.

The music and media companies. They have their own business models, so different to the west. It is great to see another way of doing things that is unique and tailored to peoples different needs, not just placing old models on different markets.

The cafe chains like " passing in time" are quite interesting....a great blend of east and west. And there are a few very good foot massage places which just leave the western or very local alternative for dead,...again,...it is the blend of best of east and west that seems to work so well.

Finally,...I guess the Beijing nightclubs such as Babyface (chain of about 13 across China) would like one to say they are the most exciting business in China today. They certainly have spent a lot of money on flashing lights, and shiny, sparkly walls to be exciting and bring in packed crowds every Friday night. It is amazing in a place like China how much money gets spent in those at midnight on a weekend night.

On a more serious note,...the natural gas industry development has some exciting potential for China. Biofuels and solar and wind are also moving fast, but there seems to be more attention on the gases.

And I am sure Starbucks would like us to think they are the most exciting, or at least fastest growing business in China today, but I find it not very exciting that there is not very much Chinese about them.

9. What key suggestions would you make to those wishing to trade / partner with Chinese businesses?
Learn Chinese, or at least have some fun learning China by singing Chinese karaoke music, walking the streets, and learning about Chinese culture.
Have patience and work hard.
Learn China for yourself. It's a personal thing. From learning China comes the insight into how to do better business here.
Understand Chinese history. The kickbacks, lack of creativity, excellence in copying, hard work, tension with foreigners all come from Chinese history, media and education system. Understand that and you understand more about why people do certain things in business the way they do.

10. What advice would you give to businesses planning to set up operations in China?
Commit for the longterm. This is the advice everyone seems to give.
Invest properly. Unfortunately China is not actually much cheaper. Pay people what they deserve. Treat people like monkeys and you will get monkeys. There are lots of cases of inside corruption. Have clear, transparent management operations and financial controls. It is too easy for things to get murky.


11. What advice would you give to individuals coming to live and work in China?
Bring a facemask unless you want lung cancer. No, just kidding (although actually serious), either have family with you or learn Chinese if you want to live here otherwise you'll probably end up an outsider all alone. Learning Chinese is fun though.

12. Which regions / cities would you consider the most and least attractive to live in and do business? Why?
The bigger name cities are probably all attractive, it depends what you like, hot climates (guangzhou), ancient history (Beijing and Xian), western influence (Shanghai). But I hear smaller-medium cities are often not very nice, with few redeeming features.
Most large Chinese cities have become that large as there is something special about them. Wuhan the river, Dalian the harbour, Chongqing the hills, Kunming..yunan,....etc.

13. How do you see your own future in China developing over the coming years?
Beijing grows on one, and China too. As little things are learned, understanding, and the ability to make a difference grows. I see the potential to get involved of lots of inspiring, yet challenging projects that can make a difference for sustainable development and peoples lives. I feel like I learn a lot in China. One of the reasons I came back is that I find it fulfilling to be constantly learning little secrets of an ancient and great history and culture. And also about the world. There are people here from everywhere,...Africa, the middle east, latin america, you name it.

14. Which networks / professional groups / resources / web resources are essential for those coming to China?
It depends what you want to do, but the Chambers of Commerce do touch most areas with their events. Many find reading the China Daily and Peoples Daily newspapers helps you understand a bit more about what is going on here, at least surface level. To get deeper, read the IHT, New York Times, Economist, Guardian, FT and Independant articles on China. Unfortunately after the Chambers I don't really think there are many great professional groups here. A lot of people living in China find sports groups a great way to meet like-minded people. I was in AIESEC for years at university and ran that network in China. I am lucky to have that network of Chinese and international AIESEC alumni friends both in China and outside. Thats probably the best network I've come across, unfortunately membership was only for university students. I have tried to get involved in Rotary, NGOs, and other groups but haven't found any very useful yet. If you invite all your own contacts to Linkedin.com you will probably create a great network for yourself in China as everyone seems to know someone in China these days,...and linkedin brings like-minded people together.

I think the best learning about China comes from doing a few Chinese classes taught by a Chinese teacher....and Make Sure they teach you some characters! Chinese think from a whole different paradigm as their writing system is pictoral, not alphabetical. I still struggle every day to understand how this influences the more circular, holistic, less broken into parts type paradigm which is different to anglo thinking. At least, we break things down differently. Learning that is the best way to understand more about things in China.

15. Which books on China would you recommend?
Wild swans, the classic. Back to the newspapers above. Wish I could remember the names of the all the heart wrenching but hugely educational cultural revolution autobiographical novels I have read. They real help understand why things are the way they are here. There is a great easy reading novel called 'Shanghai'. The autobiography of Mao's dentist was very interesting. "The good women of China" by Xinran. Mr China is good, but I only recommend it if you have Already been to China, otherwise I think it gives a distorted view. Read Wild Swans first to understand the history of Why things happen how they do in "Mr China". Lonely Planet gives some good history summaries sometimes, but gets a bit touristy. I've bought so many of the China business books,,....The coming collapse of China, etc,...but find it boring how they go on and on about how big the Chinese economy is. Yes....I can see that just looking out my window in Beijing or going into any store to buy something in the West. I find it more valuable to learn about what people went through in the past century and those before. This is actually what has created China.

16. Please add any additional thoughts about the future of China or advice for individuals coming to China:
Have fun!
China is a beautiful country. People always say," ...ahh...you are from New Zealand, such a beautiful country." And I say "yes!...but so is China!" And they say, "yes, but New Zealand is not polluted like China". And I say "yes, but only as we don't have as many people. If you put the same ratio of people to land in China, it would probably look about the same.". New Zealand does still give me hope though that people can live in a developed but beautiful environment. Let your home be your inspiration for what is possible here. We never went through a cultural revolution which sent us back 50 years,....so China is only catching back up still with what we never lost.